Scottish Budget 2026 to 2027: High Level Carbon Assessment

Annex A – Methodology

21. The figures presented in this report are estimated using the Scottish Government Environmental Input-Output Model (EIO) 2022.

22. The EIO is constructed using the Scottish Government Input-Output Tables 2022 (taken from the 1998-2022 Tables published in December 2025), ONS United Kingdom industry by industry Input-Output Analytical Tables, 2022 (Blue Book 2024), ONS Environmental Accounts, Atmospheric emissions: greenhouse gases by industry and gas, 2022 (published October 2025) and HM Treasury GDP Deflators as at 6 January 2026.

23. A fuller description of the model and its associated Greenhouse Gas effects estimates that this assessment is based upon can be found at: https://www.gov.scot/publications/about-supply-use-input-output-tables/pages/environmental-input-output/

Revisions to the Environmental Input-Output Model

24. With the release of new Input-Output Analytical Tables covering the first post-pandemic year of 2022 for Scotland and the UK, this year the base year of the EIO model has been updated from 2019 to 2022. This has involved several changes to the model:

• The updating of the underlying Scottish Input-Output model and UK closed economy Input-Output model from the 2019 version to the latest published version for 2022.
• The updating of the year used to calculate emissions factors from 2019 to 2022.

alongside the regular annual changes of:

• Updating the emissions data from ONS environmental accounts to the latest published version.
• Updating the forecast GDP deflator used to project estimates to the budget year to the latest version published by HM Treasury.

25. Updating to the latest version of the model incorporating the regular changes listed in the bullets above leads to a reduction to the previously published HLCA estimates of total greenhouse gas emissions arising from the 2025-26 budget from 8.9 MtCO2e to 8.4 MtCO2e, a downward revision of 5.3%.

26. The majority (~80%) of this downward revision arises from the updating of the Input-Output models and GHG emissions ratios from the pre-pandemic year of 2019 to the post-pandemic year of 2022. The remaining ~20% of the revision comes from updating to the latest HM Treasury forecast GDP deflator.

27. Care should be taken when interpreting the revision to imported GHGs. Given the lack of a world economy model and emissions factors, the EIO model uses the UK economy as a proxy for the world economy. Changes in emissions intensities in the UK economy may not be representative of changes in the world economy, for example due to different technologies being used, or if more carbon intensive activities move overseas and are replaced by imports.