Scotland will be disproportionately hit by the financial burden of tackling climate change, a watchdog has warned.
The Scottish Fiscal Commission said the Scottish Government would need to spend an average of £1.1bn a year to meet net zero, around 18% of its budget, to meet the “balanced pathway” scenario set out by the UK’s Climate Change Committee.
A greater share of the UK’s reduction in emissions related to forestry and land use needs to take place in Scotland, the SCF warned, meaning the “fiscal burden” could hit it “disproportionately”.
At present the UK Government is committed to net zero by 2050, while Scotland is aiming for 2045.
The commission’s chair, professor Graeme Roy, said: “What matters for the Scottish budget are the differences between Scotland and the UK. It is clear that one major difference is the greater contribution of forestry and land use in Scotland.
“To better assess the fiscal risks facing the Scottish Government, we need more information from both governments about their plans for tackling all aspects of the climate change challenge.
“Handling not just the achievement of net zero and the future adaptation challenges, but also their fiscal consequences is a shared endeavour that needs to be managed well by both Scottish and UK Governments.”
Workforce warning
The watchdog highlighted a risk in the Labour market – namely the oil and gas industry in Scotland – over net zero.
It pointed to a report from the Robert Gordon University noting that if net zero targets were met, then new job opportunities would arise in renewables, allowing the industry to expand.
However “this effect is not guaranteed”, it said.
“A more rapid decline in the oil and gas industry combined with a slower energy transition would mean a reduction in the workforce involved in offshore energy.”
Growth in sectors like hydrogen, carbon capture and storage and battery manufacturing are possible, it said, but it needs to be enabled by “clear signals and strong incentives from governments”.
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