Net Zero Assessment: Pilot report

2. Joint Budget Review (JBR)

10. A new Net Zero Assessment is a commitment of the SG in response to the 2022 Joint Budget Review (JBR) by the SG and the Scottish Parliament. The JBR aimed to improve the information available around the Scottish Budget and decision-making on climate change.

11. A summary of existing climate change assessment activity within government is at Annex A. The SG has published statutory carbon assessments of the annual Scottish Budget since 2010-11, under section 94 of the Climate Change (Scotland) Act 2009. The Carbon Assessment of the 2025-26 Budget was published in December 2024.

12. Research by the Fraser of Allander Institute (FAI), part of the University of Strathclyde, commissioned by ClimateXChange on behalf of the SG for the JBR, set out the limitations of high-level taxonomy approaches, and highlighted the potential benefits of individual policy-level carbon assessments which provide quantified emissions estimates during the early policy development stages. A summary of the FAI research and current evidence gaps is at Annex B.

13. The JBR recommended feasible and proportionate steps to deliver meaningful improvements to processes and transparency on information in the consideration of climate change, ensuring quality research evidence which meets set standards, in order to understand and reduce government spend that would ‘lock in’ future greenhouse gas emissions and align budgets and climate change plans.

14. The SG is delivering the commitments made following the JBR recommendations for a set of reforms through three phased and complementary strands of work, representing pragmatic and realistic steps:

a. In Budgets 2023-24 to 2025-26, the SG published a dedicated climate change narrative alongside the Scottish Budget document, highlighting spending areas from multiple portfolios that all contribute towards the government’s response to climate change.

b. In Budget 2024-25 and 2025-26, the SG published an enhanced climate change Taxonomy to identify and categorise all spending lines across the Scottish Budget with regards to their climate impact. This taxonomy refresh has standardised how the SG classifies both resource and capital budget spending lines relative to their climate impact – a single approach across both resource and capital budgets allowing greater consistency and the ability to give a more complete picture. The revised approach also incorporates some assessment of the magnitude of impact. The approach classifies spend lines at the most detailed available budget level. The approach was further developed for Budget 2025-26.

c. Between March and October 2024, the SG successfully piloted our new Net Zero Assessment methodology, as outlined below.