Scotland's climate change plan 2026-2040: island communities impact assessment

1. Introduction

1.1 Purpose

The Scottish Government (SG) is undertaking a series of impact assessments with respect to Scotland’s draft Climate Change Plan (CCP) 2026-2040. These assessments are:

• Equality Impact Assessment (EqIA);
• Child Rights and Wellbeing Impact Assessment (CRWIA)
• Fairer Scotland Duty Assessment (FSDA);
• Island Communities Impact Assessment (ICIA);
• Strategic Impact Assessment (SEA); and
• Business Regulatory Impact Assessment (BRIA).

Under the Climate Change (Scotland) Act 2009, the target date for net zero emissions of all greenhouse gases in Scotland is by 2045. Within this, a five-year Carbon Budget approach sets a limit on the amount of greenhouse gases emitted in Scotland over that period.

This report sets out an ICIA of the policies and proposals within the draft CCP based on available evidence and internal engagement with Scottish Government officers between November 2022 and August 2025

1.2 The Climate Change Plan

The Climate Change Plan (referred to as ‘the Plan’) is the key strategic document which sets out the Scottish Government’s approach to delivering this target. There is a requirement to publish an updated Climate Change Plan every five years.

The forthcoming Plan will cover the period from 2026-2040. This will cover our Carbon Budgets for the periods 2026-2030, 2031-2035 and 2036-2040.

The draft Plan outlines the outlines the objectives and associated policies and proposals for meeting the emissions reduction targets during the Plan’s period. It will set out in detail how we intend to deliver action to tackling climate change. The draft Plan reflects the policies and proposals grouped into ‘sectors’, being:

• Business and Industrial Process;
• Energy Supply;
• Residential and Public (Referred to as ‘Heat in Buildings’ in this impact assessment, however buildings emissions not exclusive to this sector)
• Agriculture;
• Land Use, Land Use Change and Forestry
• Transport (including international aviation and shipping); and
• Waste Management.

The draft Plan’s outcomes, policies and proposals have been assessed against the effects on the Island communities in Scotland. This assessment is set out throughout this Island Communities Impact Assessment and set out by sector.

1.3 Relevant Legislation

1.3.1 Islands (Scotland) Act 2018 (“the 2018 Act”)

The Islands (Scotland) Act 2018^[1] was passed by the Scottish Parliament in 2018 and is only one of a handful of place-based pieces of legislation globally to focus specifically on islands. The measures it contains, including the requirement for Island Communities Impact Assessment, are designed to meaningfully improve outcomes for island communities.

Scottish Ministers are a relevant authority under the 2018 Act. Therefore under sections 7 and 8 of that Act, Scottish Ministers have a legal duty to (1) have regard to island communities in carry out their functions and (2) carry out an Island Community Impact Assessment (ICIA) when creating new policies, strategies or services that are likely to have an effect on an island community which is significantly different to the policy, strategy or service’s effect on other communities (including other island communities) in Scotland.

An ICIA must:

• describe the likely significantly different effect of the policy, strategy, or service (as the case may be); and
• assess the extent to which the authority considers that the policy, strategy or service (as the case may be) can be developed or delivered in such a manner as to improve or mitigate, for island communities, the outcomes resulting from it.

1.4 The National Islands Plan 2019

In December 2019, Scottish Ministers published the first ever National Islands Plan^[2] which was created with the input of many islanders and those with a strong interest in Scotland’s islands.

The National Islands Plan sets a direction of travel for the Scottish Government and provides a framework for action in order to meaningfully improve outcomes for island communities. As required by section 3 of the Act, it includes the Scottish Ministers’ main objectives and strategy for improving outcomes for island communities, through:

• increasing population levels;
• improving and promoting sustainable economic development;
• improving and promoting environmental wellbeing;
• improving and promoting health and wellbeing;
• improving and promoting community empowerment;
• improving transport services;
• improving digital connectivity;
• reducing fuel poverty;
• ensuring effective management of the Scottish Crown Estate; and
• enhancing biosecurity.

The National Islands Plan sets out 13 Strategic Objectives, and associated key actions, in relation to achieving the proposals set out above and improving the quality of life of island communities. These objectives are:

• Population Levels: To address population decline and ensure a healthy, balanced population profile;
• Sustainable Economic Development: To improve and promote sustainable economic development;
• Transport: To improve transport services;
• Housing: To improve housing;
• Fuel Poverty: To reduce levels of fuel poverty;
• Digital Connectivity: To improve digital connectivity;
• Health, Social Care and Well-being: To improve and promote health, social care and wellbeing;
• Environmental Wellbeing and Biosecurity: To improve and promote environmental wellbeing and deal with biosecurity;
• Climate Change and Energy: To contribute to climate change mitigation and adaptation and promote clean, affordable, and secure energy;
• Empowered Island Communities: To empower diverse communities and different places;
• Arts, Cultural and Language: To support arts, culture, and language;
• Education: To promote and improve education for all throughout life; and
• Implementation: To support effective implementation of the National Islands Plan.

Fairness is a key value that underpins the National Islands Plan and reflects the Scottish Government’s commitment to equality and human rights. The National Islands Plan recognises that every member of society has a right to live with dignity and to enjoy high quality public services wherever they live.

A report is laid in Parliament annually to assess progress towards the delivery of the National Islands Plan. This is complemented by Implementation Route Maps which outline how the National Islands Plan will continue to be implemented. These measures ensure the Scottish Government continues to place emphasis on improving the outcomes for those living in island communities.

The Islands (Scotland) Act 2018 introduced a number of measures to underpin the Scottish Government’s objective of ensuring that there is a sustained focus across government and the public sector to meet the needs of island communities now and in the future with the aim of improving outcomes for islands communities. One of the provisions introduced, section 3 of the Act, was a duty on Scottish Ministers to prepare a National Islands Plan.

The National Islands Plan was taken fully into account in developing the draft Climate Change Plan and its underlying policy package.

1.4.1 Island Communities Impact Assessments: Guidance and Toolkit

In July 2022, the Scottish Government published guidance on completing ICIAs (Scottish Government, 2022)^[3] with a particular focus on the duty imposed by section 7 (duty to have regard to island communities) of the Act. The guidance sets out how to assess and take into account the impacts that policies, strategies or services might have on island communities in Scotland.

1.4.2 Climate Change (Scotland) Act 2009^[4] and Climate Change (Emissions Reduction Targets) (Scotland) Act 2024^[5]

The 2024 Act amended the 2009 Act to establish a carbon budget approach to emissions reduction target setting and thus establish a more flexible statutory target framework that is receptive to both the non-linear realities of long-term decarbonisation policy planning and reflects the latest advice from the Climate Change Committee (CCC).

The Climate Change (Scotland) Act 2009 (Scottish Carbon Budgets) Amendment Regulations 2025 set the levels of the carbon budgets for the carbon budget periods through to the net zero emissions target in 2045. These levels take into account the advice of the CCC in their Scotland’s Carbon Budgets report.

Section 35C of the 2009 Act establishes Just Transition Principles which must be considered in action to reduce net emissions in a way which:

• supports environmentally and socially sustainable jobs;
• supports low-carbon investment and infrastructure;
• develops and maintains social consensus through engagement with workers, trade unions, communities, non-governmental organisations, representatives of the interests of business and industry and such other persons as the Scottish Ministers consider appropriate;
• creates decent, fair and high-value work in a way which does not negatively affect the current workforce and overall economy; and
• contributes to resource efficient and sustainable economic approaches which help to address inequality and poverty.

1.5 Just Transition Commission

To further support the application of Just Transition principles, the Scottish

Government established its first Just Transition Commission (JTC) in 2019. The Commission was tasked with providing practical independent advice to Ministers on how to maximise the economic and social benefits of decarbonising Scotland, while managing the risks and challenges.

The second JTC, currently in operation, was appointed in December 2021. This continues the work of its predecessor by:

• providing scrutiny and advice on the ongoing development of Scottish Government led just transition plans, including the application of the Just Transition Planning Framework;
• advising on the most suitable approaches to monitoring and evaluation;
• undertaking meaningful engagement with those most likely to be impacted by the transition, hearing from a broad range of representative voices and advising on how to ensure these can shape and contribute to just transition planning work in Scotland;
• engaging and collaborating with other sources of expertise, including relevant Scottish Government advisory bodies and relevant programmes of work (including, but not limited to the Committee on Climate Change, the Poverty and Inequality Commission, Fair Work Convention, the Council of Economic Advisors and the development of the National Strategy for Economic Transformation); and
• publishing an annual report to reflect on Scotland’s progress.^[6]

As part of its work, the JTC has specifically considered the specific impacts of the transition on island communities. In September 2024, it published a report on the challenges and opportunities of the transition for Shetland, which highlighted the some of the common impacts facing Scotland’s islands. The JTC’s findings have informed the development of the CCP’s policies and proposals, and our proposed monitoring and evaluation framework.