Scotland's Climate Change Plan – 2026-2040 - FSDA

3. Key Issues and Evidence

3.1 Introduction

Socio-economic inequality is a multi-faceted issue which can affect communities that are low-income, deprived, belong to certain social classes and/or experience existing structural and institutional disadvantages. A critical aspect of socio-economic inequality is minimising child and adult poverty, which is key for sustainable and inclusive economic growth.

This section summarises some of the key issues and evidence relating to socio-economically disadvantaged groups relevant to the CCP.

3.2 Income and Poverty

It is estimated that 20% of Scotland’s population (1,070,000 people each year) were living in relative poverty after housing costs in 2021-24. Before housing costs, 18% of the population (970,000 people) were living in poverty. A person is in relative poverty if their current household income is less than 60% of the current UK median. Relative poverty statistics fall if income growth at the lower end of the income distribution is greater than overall income growth.^[8]

Data for the period of 2021-24 also estimated that 16% of the population (890,000 people each year) were living in absolute poverty after housing costs in 2021-24. After a long decline since the mid-nineties, absolute poverty rates have remained at similar levels over the last decade. Before housing costs, 15% of the population (820,000 people each year) were in absolute poverty in 2021-24. A person is in absolute poverty if their current household income is less than 60% of the UK median in 2010/11, adjusted for inflation. Absolute poverty statistics fall if low income households are seeing their incomes rise faster than inflation.^[9]

The Fairer Scotland Duty Guidance^[10] document states that “In 2016-18 a typical household in Scotland had £5,500 in financial wealth after any non-mortgage debt was deducted and a household in the wealthiest 10% had on average £215,000. But a household in the bottom 20% had negative financial wealth^[11]; in other words, they were in debt overall. This means households facing an emergency risk getting into debt trying to resolve it. Evidence on the impacts of the COVID-19 pandemic showed that lower income households were 50% more likely to save less compared to higher income households and twice as likely to have increased their debts.^[12]

Financial exclusion is a term used to describe a situation in which people, particularly low-income groups, have difficulty obtaining and/or using financial services and products that are adequate for their needs. This may mean they are often unable to access products and services such as loans, credit cards and bank accounts. A primary issue faced by financially excluded groups is the “poverty premium” which refers to the additional costs incurred in accessing financial services compared to groups that have full access to financial services.^[13] This includes pay-as-you-go mobile phone contracts, utility payments and electricity bills, which have a higher cumulative cost, despite having relatively lower unit costs. Groups vulnerable to financial exclusion may include: housing association tenants; young people not in employment, education or training; those leaving care; lone parents and divorced people; disabled people, those with mental health problems and carers; people living in isolated or disadvantaged areas; prisoners, ex-offenders and families of prisoners; members of ethnic minorities; migrants; asylum seekers and refugees; homeless people; older people; women; people without a basic bank account and people with low incomes.^[14]

During the Scottish Government’s engagement on the draft Climate Change Plan it received feedback during a Climate Change Plan Advisory Group workshop that people from low-income backgrounds may find it more difficult to feel as though they are part of the transition to a low-carbon economy because of the upfront cost-barriers involved in the transition. Relatedly, The Poverty Alliance suggested that low-income households, among other disadvantaged social groups, might benefit from being directly referenced in climate change mitigation strategies and related documents to demonstrate that they are being considered in policy development and wider thought on the transition.

3.3 Deprivation

Deprivation is most recently measured by the 2020 Scottish Index of Multiple Deprivation (SIMD).^{[15] [16]} It provides an overall deprivation score for Data Zones (DZs) across Scotland by building upon a series of domains and sub-domains. These domains include indicators such as health, income, employment, education, exposure to crime, barriers to housing and services, and living environment; and are the key indicators which influence a person’s level of deprivation. According to the SIMD, in 2020, the most deprived DZs tended to be focused around urban areas and their suburbs, with the highest percentage of deprivation evident in Glasgow City and its suburbs (North Lanarkshire and South Lanarkshire) with a combined 41.6% of Scotland’s ‘20% Most Deprived’ DZs.

These statistics provide a measure of ‘relative deprivation’, not affluence. As such, it is important to recognise that not every person in a highly deprived area will consider themselves to be deprived and likewise, that there will be some deprived people living in the least deprived areas. In particular, there are likely to be issues relating to CCP policies for those experiencing poverty in less deprived rural areas.

The Independent Review of the Role of Incineration in the Waste Hierarchy in Scotland found rising public concern about the siting and impacts of residual‑waste facilities, with communities frequently raising issues around air quality, emissions, noise, traffic and wider health implications. The Review noted that decisions about the location and scale of incinerators must account for their societal impacts, including how neighbouring communities experience environmental and health risks, and that these impacts should be actively minimised as Scotland transitions to a more circular economy. There is good evidence that socially deprived areas are disproportionally exposed to municipal landfill sites in Scotland as highlighted in the Scottish Government’s Circular Economy and Waste Route Map Fairer Scotland Duty Assessment: “In general, landfills tend to be located in areas of higher social deprivation. Actions to move waste away from landfill could, therefore, reduce impacts from the management of residual waste on these communities. However, it is essential that any impacts on the environment and local communities continue to be mitigated and monitored post-closure of landfills.”^[17]

Deprived and socially disadvantaged areas are also more likely to suffer from poor air quality.^[18] There is also potential for widening health inequalities due to emissions concentrating along the most heavily trafficked roads, which are used more by disadvantaged people as places where they live, work and shop.^[19]

3.4 Employment

Those experiencing poverty are most likely those in low paid and insecure employment with poor conditions. The unemployed also make up a substantial proportion of those experiencing socio-economic disadvantage. ‘In-work’ or working poverty is of particular concern in tackling poverty.^[20] Having paid work is an effective way out of poverty, and those families where all adults are in full-time work have a low poverty risk. However, having a job is not always enough – for example, when it does not pay well, or when someone is unable to work enough hours. Between 2021 – 24, 61% of working-age adults (410,000 working-age adults each year) in relative poverty after housing costs were living in a household where someone was in paid work.^[21]

The Scottish Government recognises the challenges in estimating the number of

green jobs in the future net zero economy. The ONS’s Low Carbon and Renewable Energy Economy (LCREE) dataset estimates for 2023 that there were 33,500 employees (Full-Time Equivalents, FTE) in the Low Carbon and Renewable Energy Economy in Scotland.^[22]

Scotland’s forestry sector currently supports over 34,000 jobs across the country, including in geographic areas and among demographic groups where job creation is most needed—such as rural and remote communities and among younger age categories.^[23]

The job figures above indicate the scope for those currently employed in non-sustainable sectors, the unemployed and those currently in low paid work to potentially secure green job opportunities in the future. However, while support is available to people vulnerable to redundancy through reskilling schemes such as the Green Jobs Workforce Academy, anxieties regarding secure employment may persist around a just transition.

The transition to net-zero will likely result in job displacement in high carbon sectors due to reduced demand for high carbon systems and fuels, while new jobs will be created in low carbon sectors as demand increases. Fossil fuel industries may provide a particular example of an industry which sees its demand reduced due to climate change mitigation policy, including through the switch to electric vehicles and clean heating systems.

There are some clear opportunities for redeployment of labour, with only minor upskilling or reskilling necessary in some cases. For instance, with falling employment levels in oil and gas, the energy sector has been redeploying available skills in renewable energy where core competencies and experience in large scale infrastructure schemes and safety critical environments allow a relatively smooth transfer of skills. However, redeployment will not be as straightforward for all displaced workers. Estimating the number of new and green jobs that will be created is challenging as definitions can vary and many roles cover both traditional and emerging sectors. It is important to provide targeted support to the workers impacted, to the communities in which these declining industries are based, and to the sections of the population most likely to face new challenges from structural change in employment.

3.5 Health Inequalities

People’s health outcomes are strongly shaped by the social and economic circumstances in which they live and in turn can create stark inequalities. It has been shown that those living in the most affluent areas of the country live much longer than those from deprived areas with NRS data published in October 2024 indicating that female life expectancy in the most deprived areas of Scotland was 10.5 years lower than in the least deprived areas in 2021-23 whilst male life expectancy in the most deprived areas of Scotland was 13.2 years lower than in the least deprived areas over the same period.^[24]

Likewise analysis from Scotland’s Census 2022 highlights strong linkages between deprivation and health inequalities with those living in the most deprived areas are significantly more likely to experience long-term health conditions or disabilities.^[25]

Climate change affects people and places in many ways, and those living in disadvantaged communities especially in poor housing or with fewer resources are less able to adapt and will need support. Already vulnerable groups are most at risk from extreme events and systemic shocks, meaning climate change has the potential to widen existing health inequalities.^[26]

In one study, a roundtable with ‘deep-end’ GPs — those serving the highest proportion of patients in Scotland’s most deprived areas — highlighted the complex links between climate change and health inequalities. They noted that patients face malnutrition due to harmful food systems, chronic conditions like obesity, respiratory, and cardiovascular diseases due to unhealthy transport and environments, and stress-related behaviours such as smoking, alcohol, drug use, or violence, all of which intersect with the drivers of climate change in the communities they serve.^[27]

There is a direct relationship between air quality and deprivation.^[28] As shown below, communities living near Air Quality Management Areas tend to be low-income households.

There are 35 Air Quality Management Areas (AQMAs) designated in Scotland.

These AQMAs are located in the following council areas (with the number of AQMAs

in brackets). The percentage indicates the relative share of the AQMAs falling within

the 20% most deprived DZs in Scotland as identified in the SIMD 2020:

• Aberdeen City (3): 10.25%
• City of Edinburgh (6): 11.73%
• Dundee City (1): 38.3%
• East Dunbartonshire (2): 3.85%
• East Lothian (1): 6.82%
• Falkirk (3): 16.35%
• Fife (2): 19.84%
• Glasgow City (2): 44.37%
• Highland (1): 9.94%
• North Lanarkshire (4): 34.68%
• Perth and Kinross (2): 5.91%
• Renfrewshire (3): 24.0%
• South Lanarkshire (3): 20.42%
• West Lothian (3): 15.48%•

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