Low Carbon Scotland - meeting the emissions reduction targets 2010-2022: report

1. Background to this Report

1.1 This Report on Proposals and Policies ( RPP) for meeting Scotland's emissions reduction targets is part of the Scottish Government's Scotland - A Low Carbon Society suite of publications that describe the benefits and opportunities of building a low carbon Scotland.

1.2 The other documents in this suite are A Low Carbon Economic Strategy for Scotland ³ , which focuses on economic opportunities and ways to strengthen business confidence in exploiting those opportunities; Low Carbon Scotland: Public Engagement Strategy ⁴ , which explains our approach to informing people about what they can do to help Scotland take action on climate change; and Conserve and Save:

The Energy Efficiency Action Plan for Scotland ⁵ which was published in October 2010. The Government's Draft Electricity Generation Policy Statement ⁶ supplements and supports this suite.

1.3 This Report on Proposals and Policies sets out specific measures for reducing greenhouse gas emissions to meet Scotland's ambitious statutory targets. Scotland has already made considerable progress. Figure 1 shows net Scottish emissions from the base year to 2008, the most recent year for which figures are available. Scotland's emissions declined by 21% over this period.

Figure 1: Net Scottish emissions, 1990 to 2008, and Climate Change Act Targets

1.4 The challenge for the next ten years will be to achieve the same level of reduction through a greater decarbonisation of our activities. Many measures are already in place to drive this change. Projections show that current policies will help to deliver a 38% cut in emissions by 2020. This progress is encouraging but it will not be enough to meet the interim target in the Climate Change (Scotland) Act to reduce our emissions by 42% by 2020, the major staging post on the journey towards the long term target of reducing emissions by 80% by 2050.

1.5 In fulfilment of the duty placed on Scottish Ministers by section 35 of the Climate Change (Scotland) Act 2009, this Report details the policies that are already in place to cut emissions and also sets out further proposals for ways in which we can make the additional reductions to take us to 42% in 2020 and even further in the future.

• The rest of Chapter 1 provides some background about Scotland's emissions targets and how we are going to measure progress. It also puts this Report in context with previous climate change work published by the Scottish Government;
• Chapter 2 describes how the proposals and policies for reducing emissions have been presented and their impact quantified;
• Chapters 3 to 8 set out the proposals and policies in more detail; and
• Chapter 9 describes the next steps following publication of this Report and the process for monitoring progress;
• Annex A presents a summary diagram of the proposals and policies in this Report in relation to the interim target of 42% by 2020; and
• Annex B shows the year-by-year breakdown of the anticipated abatement from and costs of each proposal and policy. It summarises briefly the analysis that has been undertaken to arrive at the figures presented in this Report.

• A Technical Appendix is also available that describes the analysis undertaken for this Report in more detail ⁷ .

Scotland's emissions targets

1.6 The Climate Change (Scotland) Act 2009 sets targets to reduce Scotland's emissions of the basket of six Kyoto Protocol greenhouse gases by 42% by 2020 and 80% by 2050, compared to the 1990/1995 baseline ⁸ . As well as domestic emissions, Scotland's share of emissions from international aviation and shipping are included in the targets. ⁹ The Scottish interim target is more challenging than the UK interim target on two counts: (1) the UK target is for a 34% reduction in emissions by 2020; and (2) the UK target does not include emissions from international aviation and shipping.

1.7 The Act also requires Scottish Ministers to set annual targets for emissions at least 12 years in advance. In October 2010 the Scottish Parliament passed legislation setting the first batch of annual targets, for the years 2010 to 2022 ¹⁰ . The annual target for 2020 is equal to the interim target. From 2020 onwards each annual target must be at least 3% lower than the previous year.

Measuring progress

1.8 Achievement of Scotland's targets will be measured against the level of the Net Scottish Emissions Account ( NSEA). This will account for the greenhouse gas emissions from sources in Scotland, Scotland's share of emissions from international aviation and international shipping, the effect of any relevant emissions sequestration (e.g. "carbon sinks" such as woodland) and the effect of the sale and purchase of relevant emissions allowances. The Act limits the quantity of emissions allowances that may be used by Scottish Ministers. Scotland's emissions are disaggregated from UK data and are reported annually in the Greenhouse Gas Emissions Inventory for England, Scotland, Wales and Northern Ireland ¹¹ . The Carbon Accounting Scheme (Scotland) Regulations 2010 ¹² set down in detail how the NSEA will be calculated from the disaggregated Inventory.

1.9 Section 37 of the Climate Change (Scotland) Act 2009 requires that the Scottish Ministers report, in so far as is reasonably practicable, the emissions of greenhouse gases (whether in Scotland or elsewhere) which are produced by or otherwise associated with the consumption of goods and services in Scotland. These reports must be laid before the Scottish Parliament in respect of each year in the period 2010-2050.

1.10 Consumption-based emissions reporting is a complex and evolving field and the Scottish Government is currently working to determine the most suitable methodology on which to base its reports. However, in October 2009 the Scottish Government made available a time series (1992-2006) of the Scottish greenhouse gas footprint, including consumption estimates, which reflect this developing work ¹³ .

1.11 This Report therefore focuses on policies to reduce emissions as measured against the annual targets by the NSEA. While the impact of the proposals and policies on Scotland's wider international emissions footprint has not been quantified here, the measures have been developed with consumption-based emissions in mind. Policies that would result in a transfer of emissions to other countries rather than a genuine reduction (such as decreasing the numbers of Scottish livestock, which would be unlikely to affect the amount of meat consumed in Scotland, and would therefore result in meat being imported) have been avoided.

Previous and related work

The Climate Change Delivery Plan

1.12 Scotland's Climate Change Delivery Plan ¹⁴ was published in June 2009, shortly before the Climate Change (Scotland) Act was passed. The Delivery Plan described the four transformational outcomes needed for the 2050 target to be met:

• A largely de-carbonised electricity generation sector by 2030, primarily using renewable sources for electricity generation with other electricity generation from fossil fuelled plants utilising carbon capture and storage;
• A largely de-carbonised heat sector by 2050 with significant progress by 2030 through a combination of reduced demand and energy efficiency, together with a massive increase in the use of renewable or low carbon heating;
• Almost complete decarbonisation of road transport by 2050 with significant progress by 2030 through wholesale adoption of electric cars and vans, and significant decarbonisation of rail by 2050;

• A comprehensive approach to ensure that carbon (including the cost of carbon) is fully factored into strategic and local decisions about rural land use through: appropriate protection for Scotland's carbon rich soils; minimising emissions from agricultural and other land use businesses; encouraging the sequestration of carbon, for example, through woodland planting; and the use of natural resources to generate renewable energy.

1.13 Achieving these outcomes will require a step-change in the efficiency with which energy is used in all sectors, reducing overall energy consumption in order to minimise the capacity needed and therefore the cost for decarbonising supply.

1.14 The action taken now and over the next decade will set the foundation for achieving Scotland's long-term emissions reduction targets. The proposals and policies identified in this Report will contribute not only to the achievement of the interim target for 2020, but also towards the transformational outcomes. These proposals and policies will place Scotland on the path to delivering the 80% target by 2050.

Sectoral policy documents and research

1.15 Many of the measures identified draw on existing Scottish Government policies and research.

1.16 In Energy:

• The Scottish Government published initial results from its housing carbon model in October 2009 ¹⁵ , identifying the types of measures that could be applied to the existing housing stock and associated emissions reductions;
• Conserve and Save: The Energy Efficiency Action Plan for Scotland ¹⁶ sets out in detail the actions the Scottish Government is taking to achieve a step change in reducing energy consumption;
• The Renewables Action Plan ¹⁷ and the Renewable Heat Action Plan ¹⁸ sets out what the Scottish Government is doing to pursue Scotland's vast potential for renewable electricity;
• The Draft Electricity Generation Policy Statement provides evidence on the recent important developments in renewable electricity generation, thermal electricity generation, energy efficiency and transmission and interconnection, and outlines the role that the Scottish Government intends for each of these areas;

Energy standards in building regulations will be reviewed for 2013. Research is underway following the recommendations of the Sullivan report: A Low Carbon Building Standards Strategy for Scotland ¹⁹ , published in December 2007.

1.17 In Transport, the main options presented are based largely on the research report Mitigating Transport's Climate Change Impact in Scotland ²⁰ , published in August 2009.

1.18 In Rural Land Use:

• Agriculture policies are designed to encourage all the measures identified by the Scottish Agricultural College in their 2008 report to the Committee on Climate Change ²¹ ;

• Forestry Commission Scotland's Woodland Expansion Strategy ²² , published in February 2009, sets out the rationale for increasing Scotland's woodland cover.

1.19 In Waste, the Scottish Government published Scotland's Zero Waste Plan ²³ in June 2010. Analysis of the emissions reduction potential of policies in the plan is based on the Eunomia report to the CCC in 2008 ²⁴ .

1.20 This Report on Proposals and Policies focuses on the potential for particular measures to reduce greenhouse gas emissions. Often, however, the proposals and policies identified offer additional benefits such as the potential to save money from energy and resource efficiency, or opportunities to improve people's health by getting involved in active travel. In many cases, specific policy documents and research reports provide more information about these additional benefits. References and internet addresses have been provided throughout this report to help readers find more information.

Funding

1.21 The Scottish Government aligned the development of the draft of this Report on Proposals and Policies with the preparation of the draft Scottish Budget for 2011-12. The draft Report was laid before the Scottish Parliament on the same day as the Budget (Scotland) (no.5) ²⁵ Bill for 2011-12 to give Parliament the opportunity to consider both documents in parallel. This Report covers a period which extends significantly beyond the timeframe covered by the Budget for 2011-12, and which will encompass at least three future sessions of the Scottish Parliament. Budget provisions for 2011-12 which are relevant to the delivery of the policies and proposals in this Report have been recorded in written and/or oral statements to Parliament which accompanied the publication of this Report in March 2011.

1.22 The Scottish Government's submission to the Independent Budget Review panel in June 2010 estimated the cost to the Government of implementing all of the proposals and policies identified at that point to be £8 billion to 2022, an average of around £800 million each year ²⁶ . This submission did not consider the significant financial, economic and social benefits that would result from such spend.

1.23 The Scottish Government will focus on finding mechanisms to deliver emissions reductions during this period of financial austerity. The Low Carbon Economic Strategy describes the work that is underway to raise finance for research and innovation in new technologies such as offshore and marine renewables, carbon capture and storage, smart grids and low carbon vehicles. Government is also exploring new business models with the private sector whereby companies can charge for a service that ultimately saves money for the customer (for example, eco-driving training), or attract investment from socially-responsible companies on the basis of the carbon benefits of their work (for example, carbon sequestration by forestry).

1.24 The Scottish Ministers recognise the importance of supporting the development of innovative approaches to financing emissions reduction. On 28 and 29 September 2010, the Scottish Government, in partnership with Scottish Enterprise, Highlands and Islands Enterprise, Scottish Development International, Edinburgh Chamber of Commerce, the Scottish Futures Trust and Arup, hosted the first Scottish Low Carbon Investment Conference in Edinburgh. This event brought together projects and investors, to identify and debate the risks, rewards, opportunities and challenges within the low carbon arena and to provide innovative funding solutions to maximise the economic impact of this emerging sector.

1.25 The Scottish Government also recognises the need to use every tool available to achieve the necessary scale of change, including regulation where voluntary approaches prove unsuccessful. The Climate Change (Scotland) Act introduced enabling powers in many areas including domestic and non-domestic buildings, microgeneration and waste. The Government aims to keep the regulatory burden to a minimum, and where regulation is deemed necessary it will consult on proposals with those who it will affect.

Powers

1.26 The approach to the proposals and policies in this Report reflects the limitations in the powers available to Scotland. In a number of important areas such as energy and agriculture, legislative competence is retained at UK or EU level. In these circumstances, Scottish Ministers will continue their policy of pursuing and influencing decisions at UK and EU level, in accordance with existing practice. Decisions taken in the UK Comprehensive Spending Review in 2010 demonstrate, however, that without the same financial and economic powers as other nations, Scotland has limited flexibility when it comes to implementing measures to reduce emissions. This means that more options need to be identified from within existing powers, and there is therefore a need to consider more radical options than might be required if Scotland had a full complement of fiscal and policy responsibilities.

Partners

1.27 Local government in Scotland has a clear role to play in supporting the transition to a low carbon economy, and in the preparation for and delivery of action on climate change. Scottish councils have a position of influence both as organisations in their own right and as members of Community Planning Partnerships, and have already demonstrated consistent commitment and political leadership on climate change with the signing of their Climate Change Declarations and the inclusion of local outcomes related to climate change in the Single Outcome Agreements. Local government will continue to work towards the delivery of the new statutory obligations of the Climate Change (Scotland) Act, including the public bodies climate change duties, and to provide leadership to wider civic society as Scotland moves to a low carbon economy.

1.28 The Scottish Government and COSLA are working together, alongside business, communities and others, to map out what needs to be done to achieve Scotland's emissions reduction targets, determine priorities for action, and identify policy and financial approaches. This will ensure that, wherever possible, we maximise the benefits of what can be delivered at a time of significantly constrained public spending and build upon the strong foundations already established at national and local level to take action on climate change.

1.29 Action is required by local government to fulfil its part of the public sector's contribution to Scotland's statutory emissions reduction targets both within its own right, and through influencing wider area emissions. Progress is already being made through Scotland's Climate Change Declaration, Single Outcome Agreements and the CRC Energy Efficiency Scheme. However, more detailed consideration is required of the potential contribution, and associated opportunities and other issues such as public engagement, support to businesses and individuals, regulatory roles (nationally and locally) and enforcement powers. These will therefore form part of the work to map out the route towards achievement of the emissions reduction targets and wider climate change action. The approach to that work is addressed in more detail in Chapter 9.

1.30 The third sector also has a central role to play in the transition to a low carbon economy. There are already numerous community-based initiatives throughout Scotland demonstrating how lower carbon living can be achieved through e.g. community renewable energy generation, local food production and markets, community transport initiatives and various reuse and recycling schemes. This sector is also ideally placed to assist with the public engagement required to enable behaviour change to reduce emissions.