Scotland's Climate Change Plan: 2026–2040

The Benefits of Climate Action

A failure to take the right action now would mean Scotland missing out on the enormous opportunities that net zero offers. Action to reduce emissions offers many different types of benefits that are set out in this section and quantified where possible. They fall under four broad categories:

Financial benefits: Direct financial benefits and cost savings as a result of the policies in this plan being implemented

Economic opportunities: Economic benefits as a result of the transition to net zero, such as the growth in green jobs or opportunities for Scottish businesses

Health impacts: Improved health outcomes due to reduced emissions and the actions taken to reduce emissions

Co-benefits: Wider benefits to Scottish society as a result of decarbonisation.

Financial Benefits

Delivering this action now is also essential to unlock significant benefits for the people of Scotland into the future. The Scottish Government and the CCC both agree that the move to net zero will provide substantial direct, financial benefits and cost savings, particularly for households who will see significant long-term savings from the transition to net zero.^[5]

The CCC advises that delaying proper investment in decarbonisation will, in turn, delay the benefits, including operating cost savings, improved climate resilience, and energy security.

The direct financial benefits (‘cost savings and financial benefits’) of delivering all the policies in this plan is estimated at £42.3 billion over the period from 2026 to 2040. Table 1 breaks this down by sector and by carbon budget.

Note: All costs are in 2025 prices. Totals may not sum due to rounding.

Our analysis suggests that most of the direct benefits are anticipated to go to households and businesses. Key examples for households include:

• EVs are, in many cases, cheaper to run than a petrol or diesel car, with lower maintenance and repair costs. While the upfront cost of an EV is usually higher than that of a petrol or diesel car, the Energy Saving Trust estimates that drivers can save up to £750 per year on fuel alone.^[7] In addition, the used EV market has matured and now offers a range vehicles that are cheaper than petrol cars to allay affordability concerns.
• Significant additional savings can come from shifting to more sustainable modes of transport, supported by policies such as free bus travel for over 2.4 million young people and people over 60 in Scotland. In December 2025, the Child Poverty Action Group reported that free bus travel can save more than £3,000 in the lifetime of a child for families in Scotland, compared to the UK as a whole.^[8]
• In addition, should the UK Government take action to lower the cost of electricity, as the Scottish Government has been calling for, then this will also make clean heat options such as heat pumps and electric heating more affordable.

Businesses are also expected to benefit financially from the actions to decarbonise. Examples include:

• As with above, the electrification of business fleets – cars, vans and HGVs – is expected to deliver significant savings through lower operating costs.
• The Deposit Return Scheme involves an initial set up cost but the long-term financial benefit is substantial, peaking at £112 million in 2028, with average annual gains of over £30 million between 2030 and 2034.

The financial benefits identified and quantified here relate specifically to the policies put forward within this CCP. Over and above that many other benefits and opportunities are already ongoing and in prospect from the broader suite of actions and activities which underpin our transition to net zero. For example, our heat in buildings programmes have already supported thousands of households to save up to £500 per year on their energy bills.

The benefits presented in Table 1 are set out in more detail in the Analytical Annex. They are based on forecasts to 2040 and so rely on a series of assumptions, meaning there is a degree of uncertainty and they represent best estimates. In reality, benefits are likely to change as a result of economic and technological factors.

Seizing the Economic Opportunities of Net Zero

Scotland’s strengths and areas of competitive advantage position us well to seize the opportunities of the actions associated with reaching net zero. It is vital that these opportunities are captured as part of a just transition – especially the potential to create and safeguard jobs. Analysis shows that, with the right policy support, the number of low carbon energy production jobs could rise from 19,000 in 2019 to 77,000 by 2050 as the result of a just energy transition.^[9]

This process is underway, and Scotland is already seeing the rewards flowing from our world leading energy transition. New data from the ONS estimates that in 2024 there were over 35,000 full time equivalent jobs in Scotland’s low carbon and renewable energy economy alone. Scotland saw the largest percentage increase in turnover in the sector of all UK countries between 2015 and 2024, rising from £5.5 billion to £13.3 billion.^[10]

The PwC Green Jobs Barometer also shows that a greater proportion of job vacancies in Scotland are for green jobs than elsewhere in the UK. That analysis shows that 5.6% of all job adverts in Scotland in 2024 were for jobs that have a direct positive impact on the environment, up from 4.0% in 2023. This helped Scotland once again retain first place among 12 nations and regions of the UK in the overall barometer.^[11]

The Scottish Government is taking a strategic approach to ensuring that our country can secure the maximum possible economic benefit from the transition. This CCP builds upon our Green Industrial Strategy, published in 2024, which identifies five key ‘opportunity areas’ for Scotland, based on our existing strengths and potential for growth. These are:

• Wind,
• Carbon Capture Utilisation and Storage (CCUS),
• Professional and Financial Services,
• Hydrogen, and
• Clean energy-intensive industries (decarbonised traditional industries such as chemicals, paper, steel, and emerging industries such as data centres).

We are undertaking scoping work with members of our climate centre of expertise, ClimateXChange, which is our academic advisory panel set up to explore options for an ongoing programme of analysis and evidence development focused more specifically on the economic impacts of our CCP policies.

Health Impacts

Climate change and our population’s health are inextricably linked. Not only are health inequalities exacerbated by the harmful effects of climate change, but the resilience and condition of our homes, villages and towns play an important role in promoting good mental and physical health. It is vital we maximise efforts to tackle the climate and nature emergencies given the close links between environment and population health.

We are committed to keeping people healthier and living longer. That is why we are focused on preventing the causes of ill health and reducing inequalities. To do this we launched our 10-year Population Health Framework last year which addresses the stubborn population health challenges and inequalities that remain in our communities. The actions set out in this CCP will not only protect people and communities from the health harms associated with the use of fossil fuels, but they align with the priorities in our Population Health Framework to create cleaner, healthier environments that will support a better quality of life, reduce pressure on our health and care services, and deliver many wider social and economic benefits.

The drivers of emissions and the drivers of poor health are often the same. These include poor quality housing, poverty, lack of physical activity, and food environments that make healthy choices hard for households. The actions in this plan can address these shared drivers, strengthening the building blocks of good health in local places.^[12] Integrating consideration of health and the building blocks of health into decarbonisation policy and planning can deliver immediate and long-term health and wellbeing benefits for people from cleaner air, green spaces, warmer homes, health promoting natural and built environments, active travel, high quality public services and fair work in a thriving economy.

The examples below illustrate just some of the ways that decarbonisation policy and practice is already starting to impact on the building blocks of health, and in turn improvements to health and wellbeing.

Cleaner air

We know that cleaner air can help to prevent heart and lung disease and reduce premature deaths, delivering the greatest gains in our most vulnerable communities who are exposed to higher levels of air pollution.^[13] In 2024, Scotland met all of our air quality objectives.^[14] This reflects a long-term downward trend in air pollution over the last three decades. Notably, one of Scotland’s biggest achievements has been the introduction of Low Emissions Zones (LEZ) in Aberdeen, Dundee, Edinburgh and Glasgow. Recent reports published by Glasgow City Council show that emissions have reduced more than expected since the LEZ came into force, allowing people to breath cleaner air.^[15] A particularly positive finding comes from the Hope Street automatic monitoring station which is now recording nitrogen dioxide (NO₂) levels almost 10% below the legal objective. These early outcomes suggest the LEZ is delivering meaningful improvements to local air quality and, in turn, population health.

Active travel

Sustainable active and public transport systems support physical activity reducing the risk of heart and lung disease, diabetes and some cancers.^[16] Existing levels of walking, wheeling and cycling are estimated to prevent over 4,000 serious long-term health conditions in Scotland annually and save the NHS more than £50 million each year.^[17]

Warmer homes

Warmer homes reduce cold related illness. A study for area-based Home Energy Efficiency Programmes in Scotland^[18] found that external wall insulation improvements were associated with gains in physical health scores. Relative standardised hospital admissions fell in these local areas where insultation improvements had been implemented, remaining lower than the district-wide standardised rate over almost a five-year period.

Health and wellbeing benefits of policy delivery cannot be assumed. Policy must be intentionally designed and delivered to support people in Scotland living longer, healthier lives and to narrow the gap in health outcomes between our most vulnerable communities and the national average. Through prevention at scale, an equity focus, community voice and whole system collaboration, this CCP will make a significant contribution to improving life expectancy, a healthy life and narrowing the health equality gap.

Co-Benefits of Climate Action

In addition to the benefits set out previously, there are further indirect co-benefits from climate action which will also support the wellbeing of people across Scotland. The Edinburgh Climate Change Institute (ECCI) has developed a methodology to estimate the value of these co-benefits, aligned with the Climate Change Committee’s distributional framework^[19] and the UK Government’s Green Book guidance. Domestic and transport policies within this plan have been spatially distributed across Scotland according to local characteristics, including housing tenure, domestic energy efficiency ratings and baseline travel patterns. The resulting policy impacts have then been valued in monetary terms and discounted according to UK government guidance. Further information on the methodologies is available in the UK Co-Benefits Atlas.^[20],[21]

The wider socio-economic impacts of the policies associated with this Plan are estimated to be worth £8.0 billion over the period 2026-2040.^[22] The majority of these benefits are the result of improved public health outcomes, including increased physical activity from shifts to active travel and reductions in air pollution from switches to clean heat. Across Scotland, estimated benefits are £1,450 per capita over the 15-year period.

These wider co-benefits represent some of the effects from mitigation actions on public health, quality of life and societal outcomes. Many net zero actions generate positive local impacts, such as reduced noise pollution from electric vehicles to safer and more liveable homes.^[23] These changes translate into estimated economic valuations through reduced public service costs, avoided environmental damages and positive health outcomes.

The results indicate that the wider impacts of climate action are not distributed uniformly across Scotland. The scale and make-up of these impacts depend on local contexts as well as how and where these policies are delivered. For example, benefits from avoided air pollution are concentrated in urban areas where population exposures are greater. Many benefits increase over time, particularly health-related impacts and quality of life improvements, which accumulate as deployment accelerates. The targeting of interventions in our more vulnerable households and socio-economically deprived communities can also maximise the social value of climate policies, particularly through the role of domestic retrofits in alleviating acute fuel poverty.^[24]

Several caveats should be included alongside these assessments. Firstly, ECCI’s analysis estimates the impacts of housing and transport-related policies but does not capture the full scale of socio-economic impacts associated with this CCP. For example, impacts on biodiversity are not included in the analysis. Secondly, the timing and location of net zero actions has been guided by the CCP, however, there are inherent uncertainties in a 15-year plan where actions are to be led across different parts of society. Thirdly, these results cover the time period of 2026 to 2040, but many of these wider impacts will continue to have effect well beyond our net zero target date of 2045, as infrastructure and building improvements remain in place. Finally, while the methodology employed to conduct this analysis is built on Green Book methods, debate and analytical approaches in the academic and policy community are still developing around the most appropriate approaches for assessing the wider impacts of climate actions.^[25]

Overall, this analysis demonstrates that the CCP has the potential to deliver significant and positive societal benefits which will greatly improve people’s lives alongside producing emissions reductions.