Subordinate Legislation
Forestry Commissioners (Climate Change Functions) (Scotland) Order 2012 [Draft]
Item 2 concerns subordinate legislation. The draft order has been laid using the affirmative procedure, which means that the Parliament must approve it before its provisions may come into force. Following this evidence session, the committee will be invited to consider the motion to recommend approval of the draft order.
I welcome the Minister for Environment and Climate Change, Stewart Stevenson, who is accompanied by his officials, whom he can introduce.
I am accompanied by David Henderson-Howat, who is interested in forestry, and Dr Heike Gading, who is interested in legal matters, because what is before us is simple in principle but a little more complicated in practice.
If you have some introductory remarks, you may fire away.
Section 59 of the Climate Change (Scotland) Act 2009 gives us powers, by order, to modify the functions of the forestry commissioners where we consider it necessary or expedient to do so in relation to climate change. As you know, the 2009 act created mandatory climate change targets aimed at reducing Scotland’s net greenhouse gas emissions.
The substantial potential for using forests to help mitigate climate change was highlighted in the 2006 Stern report on the economics of climate change. More recently, in its 2010 report, “Scotland’s path to a low-carbon economy”, the Committee on Climate Change identified increased woodland cover and improved forest management as levers for helping to unlock our emissions reduction potential. That report also highlighted the very good opportunities that we have in Scotland for investments in renewable energy.
As the Executive note that accompanies the draft order explains,
“Most public bodies in Scotland are under a duty, when exercising their functions, to act in the way best calculated to contribute to the delivery of the climate change targets set in or under Part 1 of the 2009 Act.”
However, as commissioners for a cross-border body, the forestry commissioners are not currently subject to that duty, although they manage a large estate of more than 650,000 hectares on behalf of the Scottish ministers. The commissioners have voluntarily agreed to comply with the duty but, given the size of the estate that they manage, we consider it expedient to require them to manage that land
“in the way best calculated to contribute to the delivery of the climate change targets”.
In fulfilling that duty, I would expect the commissioners to have regard to, for example, the range of forest management measures that are set out in the recently published forests and climate change guidelines. In addition, as we said during the passage of the Climate Change (Scotland) Bill, we want the commissioners to make full use of the national forest estate in Scotland for generating renewable energy and, where appropriate, to enter into joint ventures with developers and local communities.
It is expected that up to 2GW of capacity could be installed on the estate by 2020 through, for example, the development of hydroelectric schemes. Leasing is the traditional approach, but joint venture arrangements with commercial developers offer scope to increase returns for the taxpayer and to serve as a vehicle for stronger community engagement. There could also be potential for the self-development of small-scale schemes by the Forestry Commission Scotland.
Accordingly, the purpose of the draft order is to modify the functions of the forestry commissioners in Scotland by inserting a new subsection into the Forestry Act 1967, which would provide that
“The Commissioners also have the general duty of using land in Scotland placed at their disposal by the Scottish Ministers ... in the way best calculated to contribute to the delivery of the ... climate change targets”.
I have been in correspondence with United Kingdom ministers about laying an order at Westminster under section 104 of the Scotland Act 1998 because, although the commissioners have powers to enter into joint ventures in Scotland for the purpose of exercising their powers under the 1967 act, those functions do not expressly include the development of the renewables potential of the land that is put at their disposal. The generation, transmission, distribution and supply of electricity are reserved matters and, in drafting our order under section 59 of the 2009 act, we needed to avoid anything that might be construed as relating to reserved matters. However, UK ministers have agreed in principle to lay an order in Westminster under section 104 of the 1998 act in consequence of the draft order that members are now considering. Their order specifically refers to what our order does. That will give the commissioners express powers to use land at their disposal in Scotland to generate, transmit, distribute and supply electricity from renewable sources where that would help the Scottish ministers in achieving their climate change targets.
I am sorry that there is a rather complex story about something that is relatively simple in practice, but I hope that my explanation gives members some insight into the processes and into why things have been done in that particular way. I am happy to take questions.
Thank you very much. I will kick off. In the consultation, 70 per cent of respondents expressed positive views and 15 per cent expressed negative views. Will you give us a flavour of what the negative views were?
There is quite reasonable and legitimate concern among people in certain areas of Scotland about what they see as overdevelopment for wind turbines. The Government certainly considers that when it provides planning consents under section 36 of the Electricity Act 1989, under which we have executive devolved administrative powers and give consents. Obviously, part of what is being proposed is to give the Forestry Commission the opportunity to put up wind turbines. I think that some of those who expressed concerns did so about that matter but, of course, it will be dealt with elsewhere through planning law, and what has been proposed will not relieve the Forestry Commission of meeting all the requirements of planning law.
Do the 70 per cent or so who were in favour include people who mentioned specifically the need to meet our climate change targets?
Yes. People are also interested in making sure that, in these difficult times, all the assets that are to hand for the Government are used to maximum economic effect. Economic benefits are associated with the powers that we are considering giving to the Forestry Commission, as are substantial benefits for the climate change agenda.
I remember quite well the Climate Change (Scotland) Bill and amending it to take out the Scottish Government’s wish to sell off large parts of Forestry Commission land. I therefore seek assurances that the order will not give powers to sell any significant amount of Forestry Commission land.
Like some people outwith the Parliament, I am also concerned about the amount of trees that are being cut down. There should be replanting to replace them, but energy development companies are sometimes not doing that. It may be difficult to balance losing trees against making gains on renewable energy from wind farms. I am interested in the minister’s view on those points.
I have a slightly different recollection of the effect of Mr Hume’s amendments to the Climate Change (Scotland) Bill, but let us pass over that, because it is somewhat ancient history. The more substantive point that he raises is in relation to felling consents, which are almost invariably associated with the requirement that there be compensatory planting. That requirement is there precisely to protect our acreage of trees in Scotland, which is currently around 17.5 per cent of our landmass, and which our targets would take to a substantially higher figure.
It is worth making the point that compensatory planting to reinstate a forest that has been felled is a bit more expensive than planting on virgin land. We are alert to that and seek to monitor whether the condition associated with felling, which is that there is reinstatement, is in fact met.
On my first point, you just glanced at my recollection of the bill, but the question was about selling off and longer leases. I know that reprovisioning is going on, which is not too much of a problem.
Okay. Mr Hume is correct to talk about reprovisioning. Certainly, the order will have no effect on that issue, which is dealt with separately. The order makes that neither easier nor more difficult; it simply does not touch on it at all.
Thank you, that has made it clear.
Minister, you highlighted to us that the order might serve as a vehicle for stronger community engagement in wind and hydro renewable energy. In view of the concerns about the relationship between renewable energy developments and communities, will you expand on how the order might create stronger engagement?
The order will not have a direct effect on such community engagement. The Forestry Commission has a scheme that enables communities to stake equity in developments, subject to the proviso that the combined Forestry Commission and community interest does not exceed 49 per cent. There are technical reasons why that is the case.
The order will create new opportunities by increasing the amount of renewable energy projects on Forestry Commission land, but it will not change the principles or the process. As well as wind and hydro, other renewable energy projects could be created—for example, geothermal. I am not aware of any opportunities of that kind, but the order is not restricted to any particular technology; it has a general enabling power.
10:15
I come to this fairly new, so my question might have been discussed earlier. Has an environmental impact assessment been carried out on the proposed changes? I do not see anywhere in the covering papers the percentages that we are talking about and how much land will be made available for renewable energy. Is a limit going to be set on that?
The order does not require an environmental impact assessment and none has been done. Proposed projects would be subject to environmental assessment, and that is the point at which it happens. Environmental assessments are often quite specific to the conditions in a local area. The forest estate—which constitutes 7-plus per cent of Scotland’s landmass and is a substantial amount of Scotland—contains quite variable conditions, so it is appropriate to do assessments.
The order sets no limits, but the Forestry Commission works to guidance that ministers provide. We will certainly consider what is appropriate to provide in the way of guidance. We are not talking about a wholesale transfer of forest land to renewable energy, because that would be quite perverse. The forests themselves are a substantial contributor to the climate change agenda, so doing that would be unhelpful. In creating a renewable energy project, we have to choose the site carefully so that there is a net benefit if there is a loss of trees, as Jim Hume said.
When will that guidance be made available?
I do not want to mislead you. I said that we will consider whether guidance is necessary. We have regular discussions with the Forestry Commission about its activities and I meet the responsible official at least once a month to discuss a range of issues. We will consider whether it is necessary to have a formal discussion about the subject. We are aware of what the Forestry Commission is doing.
At this stage, we are not necessarily minded to put guidance on a formal basis, but we will have the opportunity to do so if we feel that it is necessary in the future. I am sure that members of the committee and others will keep an eye on what goes on in the real world.
I want to explore the economic advantages to which you referred earlier. Looking at wind farms as an example, traditionally, the landowner would enter into a deal with the developer in exchange for rent and a share of the profits of the electricity revenues that were generated from each turbine. Do you expect the Forestry Commission to enter into arrangements with third-party developers for, say, a wind farm, or do you expect it to be the developer?
Both of those could apply. It is worth saying that the Forestry Commission can already enter into agreements with third parties. The order extends its powers to take the lead and be the developer, which would mean more of the profits being retained in the public purse.
The Forestry Commission is also keen to make sure that it shares the benefits with local communities. Whenever there is development of any kind, including renewables projects, there could be disbenefits. If there are such disbenefits to a community, it is perfectly proper that part of the discussion should be about whether a benefit of a project could compensate for a potential disbenefit. I know of many communities across Scotland that have been able to benefit substantially from a share in revenue from a range of renewables projects—most commonly, but not exclusively, wind farms—and many communities have welcomed that.
The Executive note refers to a clear separation of functions between the specialist business unit and the parts of the Forestry Commission that are responsible for regulatory work. How do you envisage the relationship working in practice? For example, how might conflicts of interest and so on be avoided?
We are relatively familiar with dealing with such conflicts of interest; after all, the Scottish Environment Protection Agency is both an adviser and a regulator. There are two important factors to take into account, the first of which is that there are formal processes to make clear the basic principle that those who provide advice cannot advise themselves in their regulatory role. Secondly, the projects are all subject to local authority planning—unless they are over 50MW, in which case they are subject to Government planning under section 36 of the Electricity Act 1989. It is not as if such projects sit outside normal consent procedures; they are within the planning system. Nevertheless, you are perfectly correct to highlight the potential for tension between what might be termed the secondary objective of delivering economic value from developments—and, indeed, supporting climate change—and the Forestry Commission’s broader, primary objective, which is to provide forest estate for all the purposes that we require.
I thank the minister for attending this morning.
At the moment, the Forestry Commission is under a de facto best efforts obligation to meet these requirements. What does the minister expect will be the practical concrete difference—with regard to, for example, reporting—of turning the best efforts obligation into an actual obligation on this public body?
As a cross-border institution, the Forestry Commission is not included in the existing duty, but it has voluntarily agreed to operate as if it were subject to it. Legally requiring it to do all this, which is what our order provides for, gives a more robust environment.
Importantly, if we put in law the requirement on the Forestry Commission in relation to climate change, that gives the Westminster legislation something to refer to when it provides the legal power to generate and distribute electricity—that is, renewable electricity, the definition of which in the Westminster order specifically excludes fossil fuels and nuclear power. As your brother constantly points out to me, that definition will include fungible matters—in other words, the burning of wood—if that is what is wished. There is a little bit of debate about definition in that respect, but that clearly falls within it.
As far as the legislative process is concerned, although the order puts into law something that is already happening, it also provides the legislative hook for Westminster to lay its own order, which I expect to happen in a matter of weeks if the Parliament approves the order that we are considering.
I must intervene at this stage—
That sounds ominous, convener.
I know that we are always being educated but, nevertheless, I suspect that many of us do not know what the word “fungible” means. We have had charrettes and ridiculous organisms in the past, but what does that mean?
I seek to assist. In general terms, a renewable source is something that is renewed by a natural process, and a fungible source is something that is capable of being renewed but which requires our intervention to ensure that that happens.
When a tree is cut down and burned to generate energy or heat, it is not replaced on a timescale that makes sense; there are natural processes that might or might not cause the seeds that it may have cast to the ground to renew the tree. Forestry is not like the wind, the waves and the sun, which involve natural processes from which we can extract as much as we want—in practical terms—without affecting the continuing supply, so it is fungible rather than renewable.
That is not a formal definition but a definition of the practical effect. I suggest that you ask my ministerial colleague Fergus Ewing if you wish to have a legal definition, as he apparently has one.
Thank you for that, minister.
I feel as if I have been transported on to “Call My Bluff” and I should hold up a card that says “true” or “false”. Of course I believe you, minister.
To return to Graeme Dey’s exploration of planning matters, you said that for a smaller renewables project, planning permission would fall within the local authority’s remit.
If permission is refused by the local authority, the decision can be appealed to the Scottish Government. Larger projects would go directly to the Scottish Government anyway. I can foresee some conflicts of interest in future, in cases in which the Forestry Commission, which is a Scottish Government body, benefits from the project, and therefore the Scottish Government benefits through the public purse. How can that conflict be overcome if the Scottish Government is looking at appeals from itself and at larger projects directly?
There is nothing new in the potential for conflict, which is why the ministerial code contains a whole range of requirements in relation to planning. If a project is in the decision maker’s constituency, for example, that person is removed from making that decision. By the same token, it is the minister responsible for energy who makes decisions under sections 36 and 37 of the Electricity Act 1989, so they are not made by the minister—me, in fact—who is responsible for the Forestry Commission. There is a separation.
In making such a decision, the minister acts in a quasi-judicial role, and must consider only matters that are put in front of him or her that relate to the planning issue in question. Other matters of which the minister may happen to aware cannot be considered. If we do not follow that process, there could be the prospect of a legal challenge.
We are quite familiar with dealing with those conflicts, which illustrate the precise point that Graeme Dey was pursuing—in a slightly different context—about separation of interest. I have a lifelong familiarity with that discourse. On one occasion my wife and I were on opposite sides of a stock exchange takeover battle, and we did not discover that until six months after the battle ended, so it is perfectly possible even when you are sleeping on opposite sides of the same bed to maintain a Chinese wall down the middle.
Thank you for that information.
I thought that you would like that, convener.
I remind members that officials cannot speak during the debate that follows under the next agenda item. If members have no further questions, I will ask a little technical question about wind farm and hydro development. Keyhole development in forests is one way of using some of the least productive pieces of ground, which are on the tops or the steep sides of hills and perhaps would not otherwise be redeveloped in future forestry. Are there good examples of that happening already? It is clearly important in large parts of the Highlands, where there are a lot of steep slopes that would probably not be redeveloped.
10:30
I do not have examples to hand, but I will seek to provide some in writing.
You make the important point that some of the planting that has been undertaken, both by private forest owners and perhaps by the Forestry Commission, has been on sites that are very difficult to harvest. Modern forestry practice would perhaps lead to different sites being chosen. You are therefore correct that there are opportunities for wind farms in keyhole developments, probably in areas where we would not today plant in the first place. We will seek to identify some examples, but I am afraid that I do not have any to hand.
Thank you. We have no more questions.
Agenda item 3 is consideration of motion S4M-01903. I invite the minister to speak to and move the motion.
I think that we have had a good debate, so I will just move the motion.
I move,
That the Rural Affairs, Climate Change and Environment Committee recommends that the Forestry Commissioners (Climate Change Functions) (Scotland) Order 2012 [draft] be approved.
Motion agreed to.
We will record that and confirm the committee’s report in due course. I thank the minister and his officials for attending.