Scotland Budget outlines multi-million-pound pots for net-zero heat and agriculture

The Scottish Government has this week published its draft 2020-21 Budget, which sets aside millions of pounds for ocean conservation and decarbonising sectors such as heat and agriculture.

The draft Budget was published on Thursday (6 February), building on Scotland's 2019 Climate Change policy package

The draft Budget was published on Thursday (6 February), building on Scotland's 2019 Climate Change policy package

On low-carbon heat, the Budget includes a £50m pot for local authorities looking to invest in heat networks and confirms that tax rate relief on district heating projects will continue until at least 2031. The Committee on Climate Change (CCC) claims that at least 18% of the UK’s overall heating demands will need to be met by such projects by 2050, if the net-zero goal is to be met.

A ‘Heat Transition Deal’ for private sector firms in the heating and heavy industry sectors is also promised.

Elsewhere, the Budget outlines a £65.5m package for marine conservation and restoration, up from £52.1m in 2018-19. This pot will be split across projects working to prevent overfishing; champion animal and human rights in the seafood supply chain; conserve and restore habitats and biodiversity; and scale-up marine renewables.

On the latter, a 2018 report from the Offshore Renewable Energy Catapult said that the tidal stream industry could generate a net cumulative benefit to the UK of £1.4 billion, supporting nearly 4,000 jobs by 2030. Given that the UK’s central Government has repeatedly failed to support tidal projects in England and Wales, it is widely expected that the majority of sector growth will happen in Scotland.

The Scottish Budget’s other green economy headlines include a £100.5m package to support the water sector – the same amount the Government has allocated for the past three Budgets – and £16.5m to reform land-use, down from £17.1m at the last Budget.

Land use has risen up the green policy agenda in the wake of the IPCC’s special report into the issue last year. According to the Panel, land use currently accounts for almost one-quarter (23%) of human-caused greenhouse gas (GHG) emissions, with agriculture accounting for the majority of these emissions.

The CCC last month published its UK-specific recommendations for changing land-use in line with net-zero, outlining the need for forestry and peatland restoration; food waste reductions across the value chain; bioenergy crops and a shift towards consuming 20% less red meat and dairy per capita.

With the context of Scotland’s natural landscape and food sector in mind, the large chunks of the Budget pot are expected to be allocated to forestry, peatlands and decarbonising the livestock sector.

Green economy reaction

The Scottish Government said in a statement that the environmental provisions in the Budget will “support and facilitate the pivot towards a net-zero trajectory which requires all portfolios to respond to the global climate emergency”.

“While there are significant challenges in this space, there are also exciting opportunities to diversify our economy and to lead the world in transitioning to net-zero,” the statement reads. “Our priority for the year ahead is to respond to the global climate emergency and biodiversity loss.“

WWF Scotland’s head of policy Gina Hanrahan said the Budget “clearly steps up funding” around the “twin” biodiversity and climate crises.

“It's welcome to see additional investment in heat networks, sustainable transport, as well as support for farmers to reduce emissions, and significant new investment in peatlands – our natural ally in the fight against climate change,” Hanrahan said.

But she felt the Government had missed an opportunity for greater investment in energy efficiency. The CCC’s annual report to the Scottish Parliament warned that the nation would miss its net-zero target without policy measures to ensure that “all buildings are as energy-efficient as can be practically achieved“ in the 2020s.

“While some additional funding for energy efficiency is a move in the right direction, this falls short of the transformational funding needed to tackle our leaky homes, cut fuel poverty and put Scotland at the forefront of the transition to high performing, green homes,” Hanrahan added. “We want to see this prioritised for additional funding.”

Elsewhere, Scottish Renewables has welcomed the Budget’s measures for low-carbon heat and marine renewables. It called the package of measures on decarbonizing heat “vital to plug funding gaps”, saying they would “give industry the certainty to invest and deliver on the enormous economic opportunity presented by the transition to low-carbon heat”.

The Scottish Green Party, meanwhile, was not so forgiving. It has slammed the Budget as “timid, not transformative”.

“It lacks the necessary action on the climate emergency and is an abdication of responsibility,” Green MSP Patrick Harvie said. “The Finance Minister must change tack if she wishes to secure our support for her budget.”

The Greens would specifically like to see local councils given greater powers to set – and funding to deliver against – more stringent carbon and biodiversity targets than Scotland’s central Government. It is also calling for greater financial support to decarbonise transport, the nation’s most-emitting sector. Green proposals on transport include a concessionary bus fare scheme for young people, in a bid to discourage individual car ownership in urban areas and support lower-carbon journeys through rural areas.

Sarah George



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