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Chamber and committees

Meeting date: Tuesday, March 6, 2018

Meeting of the Parliament 06 March 2018

Agenda: Time for Reflection, Business Motion, Atrial Fibrillation, Topical Question Time, Climate Change (Emissions Reduction), Higher Education (Widening Access), Local Government Finance (Scotland) Order 2018 [Draft], Land and Buildings Transaction Tax (Relief from Additional Amount) (Scotland) Bill: Stage 1, Land and Buildings Transaction Tax (Relief from Additional Amount) (Scotland) Bill: Financial Resolution, Business Motion, Parliamentary Bureau Motion, Decision Time, LEADER Programme


Contents


Climate Change (Emissions Reduction)

The next item of business is a statement by Roseanna Cunningham on Scotland’s plans to tackle climate change and reduce emissions. The cabinet secretary will take questions at the end of her statement.

14:06  

In 2009, the Scottish Parliament unanimously passed the most ambitious climate change legislation anywhere in the world. Eight years later, I am laying the Scottish Government’s third report on policies and proposals for meeting the statutory emissions reductions targets from 2018 to 2032—our climate change plan. I am doing so a little late, thanks to last week’s weather, but that is perhaps fitting, given that the reality of climate change will mean that Scotland experiences increasingly frequent severe weather events.

The plan has been prepared in accordance with sections 35 and 36 of the Climate Change (Scotland) Act 2009.

In January 2017, I laid before Parliament a draft version of the plan, and I am grateful for the scrutiny that four parliamentary committees gave it. While we were considering the recommendations that were made, advice was received from the United Kingdom Committee on Climate Change, along with feedback from a wide range of stakeholders with interests across the entire range of society and the economy. I wish to thank formally everyone who was involved in the development of the final plan.

We have responded with changes that, I believe, result in a better plan—one that is more balanced, more ambitious and more achievable. The final version of the plan is very different from the draft. It addresses members’ concerns and it presents what is undeniably a complex set of issues, policies and proposals in a more accessible way. In short, we listened and we have produced a climate change plan that is fit for the future and for a growing economy.

So, what is in the plan? It sets out a vision of Scotland’s society for 2032 and the policies that will get us there. Of course, last September, in our programme for government, we also announced significant policy changes affecting greenhouse gas emissions, and they have been embedded in the plan. The plan is broken down into sectors of the economy and sets out the contribution of each.

Scotland’s electricity system has been our great success to date, and it shines a light on the path for other sectors to follow. Already largely decarbonised, our electricity system will be increasingly important as a power source for heat and transport. With our new energy strategy for Scotland, which was published in December, we are committed to delivering 50 per cent of all Scotland’s energy needs from renewables by 2030.

By 2032, we will have set the scene for the deployment of carbon capture and storage technologies. Although the plan does not rely on CCS to deliver our emissions reduction ambitions, our support for the ACT Acorn project site at St Fergus, which will demonstrate how our North Sea infrastructure can be reconfigured and reused to remove and store carbon from the atmosphere, shows our determination to do even more in the energy sector.

In transport, we will transform the way that we travel. Scotland will be a safer and friendlier place for pedestrians and cyclists, and our plans for electric vehicles and infrastructure mean that we will phase out the need to buy petrol and diesel cars and vans a full eight years ahead of the United Kingdom. We will introduce low-emission zones to Scotland’s largest cities, which will improve the quality of our air, and we will take significant strides towards having greener buses, heavy goods vehicles and ferries.

Our buildings will be insulated to the maximum appropriate level and will increasingly be heated and cooled by low-carbon technologies, which will benefit consumers through lower heating bills, helping to combat fuel poverty. An entire low-carbon services sector will grow around the £0.5 billion we are investing in Scotland’s energy efficiency programme.

Over the lifetime of the plan, we will reduce food waste and end the landfilling of biodegradable municipal waste, while industry and consumers will benefit from a more circular economy.

By 2032, we will have transformed our landscape. New forest will be planted in the right places and more of our peatlands will be restored to health, which means that greater amounts of carbon will be stored, biodiversity will be increased and healthier ecosystems will be created.

By 2032, we will also have realised our ambition for Scotland to be among the lowest-carbon and most efficient food producers in the world. Scotland will be a world-class producer of high quality food, with growing numbers of farmers and crofters moving to low-carbon farming practices. That will not only achieve greenhouse gas emissions reductions but generate improvements in animal health and welfare, provide cleaner water and air and—crucially—save farmers money.

Scotland’s industrial sector will be more energy efficient and productive and will use more innovative technologies, which will present significant economic and competitive opportunities. That will be supported by our low-carbon infrastructure transition programme, through which we will provide £60 million of new investment to maximise Scotland’s enormous potential in the low-carbon sector.

The significant decarbonisation needed in industry depends, of course, on our continuing access to the European Union emissions trading system. Sadly, the UK Government’s continued lack of clarity on that is risking investment and growth in our economy. As the UK Government prepares to remove Scotland from the EU, it is imperative for it to reassure industry that the level playing field provided by the ETS across Europe will be maintained for Scottish businesses.

Communities naturally have a critical role to play, and the plan recognises that. I am particularly proud of the support that we have provided through our climate challenge fund, which has helped community-led organisations to tackle climate change by running projects that reduce local carbon emissions.

Businesses also have a crucial role to play. Moving early to invest in energy efficiency will protect them against rises in fuel prices, and shifting operations to a low-carbon footing will meet the expectations of an increasingly climate-aware consumer base. With an estimated $23 trillion of climate-friendly investment opportunities by 2030, the direction of travel is self-evident and our message to businesses is simple: we will do all that we can to provide them with the certainty and stability that they need to invest and grow in the low-carbon economy. With last week’s announcement of the implementation plan for the Scottish national investment bank, there is reassurance that we will provide flexible finance for our companies to innovate and grasp the opportunities of the low-carbon economy.

The transition to an environmentally and socially sustainable economy may look daunting. To make sure that it will be a positive experience for workers, communities and businesses, we are working towards the establishment of a just transition commission later this year. The commission will provide advice to ministers on how to proceed, while helping to tackle inequality and poverty and promote a fair and inclusive jobs market.

Scotland has a particular responsibility to deal with climate change. Arguably it was a Scot, Greenock’s own James Watt, who ushered in the industrial revolution and the burning of fossil fuels on a massive scale, so it is right that we demonstrate leadership in dealing with the causes and effects of climate change. At the global climate negotiations in Bonn last year, the First Minister said that

“our ambitions must live up to the scale of the challenge, and our actions must live up to our ambitions.”

This Government is already making a difference abroad. We are working with international partners to build and maintain the momentum for action, and, with our climate justice fund, we are supporting some of the poorest and most vulnerable communities in Africa. However, it is our actions here at home that will give us the credibility to lead others, and with this plan we set out our ambitions for Scotland.

The ambitions will be difficult to achieve. There will be bumps on the road ahead, but we choose this road willingly, and are meeting the challenge head on with our stringent and demanding annual targets and our commitment not to purchase carbon allowances in the international markets. Soon we will introduce a new climate change bill, to raise our ambition even higher.

We are not taking any easy options, because this Government believes that we have a moral obligation to act. We are confident that Scotland’s unique gifts—plentiful renewable energy resources, a strong legacy of innovation, and the ingenuity of the people of Scotland—will enable us to realise the opportunities that lie ahead. My Cabinet colleagues and I are dedicated to delivering the vision set out in this climate change plan to tackle one of the world’s most challenging issues. I commend the climate change plan to members.

I declare an interest as a farmer. The climate change plan that was published by the Scottish Government yesterday lacks specificity and ambition across most sectors. Like others, we are frustrated that the Scottish Government has ignored many suggestions made by MSPs and parliamentary committees to improve the climate change plan, and we are disappointed to see that little has changed from the draft plan that was published a year ago.

We would like the Scottish Government to provide more clarity on the actions that it will take and the policies that it will introduce to tackle climate change, particularly in the transport sector. Specifically, we saw last week from the latest transport statistics that bus passenger numbers in Scotland have fallen by 10 per cent over the past five years, and that only 31 per cent of journeys to work were by public transport or active travel in 2016—the same as in 2006. In addition, and more worryingly, at the current rate of progress it will take around 239 years to reach the Government’s target of 10 per cent of journeys being made by bike.

How can the cabinet secretary expect there to be a modal shift away from petrol and diesel cars to public transport and active travel when under her Government’s stewardship we have seen so little progress thus far? When will we see transport emissions start to fall, given the trends that we see in car usage and active travel?

I think that John Scott’s opening comments were utterly absurd. We are one of the most ambitious Governments in the world when it comes to tackling climate change, and I do not think that he would get much argument about that from many of our international partners. To suggest that there is a lack of ambition is quite ridiculous. In fact, a great deal has changed between the draft plan and now, not least with regard to the updated greenhouse gas emissions statistics that have been brought on board and the programme for government proposals that are to be wrapped into the plan. Indeed, of the various recommendations that were made, many have been included in the final plan.

The truth is that transport emissions will have been reduced by 37 per cent over the lifetime of the plan—the greatest reduction in absolute terms of any sector. We are more ambitious in our plans for transport in Scotland than the Tory-run UK Government is at Westminster, and I doubt whether anybody looking at our proposals on active travel, low-emission zones or the move towards low-emission vehicles could possibly come to the same conclusion that Mr Scott has come to. I hope that that change of tone from someone who is normally a rather more reasonable individual is not indicative of a wider move across the Conservative Party in this Parliament.

The stark difference between the plan and the Government’s earlier draft is puzzling. In some areas, the plan has swung quite dramatically from unrealistic to unambitious or, in the cabinet secretary’s words, “more achievable”. Was that really the aim?

The windfall from the land use sector and the new effort in the phasing-out of fossil fuels in the transport sector are to be welcomed and are favourable for emissions, but it is disappointing to see those used, as I understand the final plan, to reduce effort in other sectors. The plan is already based on the outdated ambition of the Climate Change (Scotland) Act 2009, and Scottish Labour has urged the Government to consider a 77 per cent target for emissions reductions by 2030. Will the cabinet secretary explain why most of the sectoral targets have changed so dramatically for the worse?

I must focus on agriculture. The sector has been allowed to lag behind considerably, yet all the related policies seem to be about encouragement. Does the cabinet secretary feel that criticisms of that section of the earlier draft have been sufficiently addressed?

There have been some significant changes since the draft plan was published, not least in relation to scientific measurements, as we have a new set of greenhouse gas emissions statistics. Claudia Beamish no doubt heard my previous answer on some of the other changes.

The draft plan and the final plan were never going to look exactly the same. We have taken the opportunity that some of the changes have given us to make adjustments to the draft plan. One of the adjustments that Claudia Beamish might be concerned about in terms of reining back is the ambition on heat. The proposal in the draft plan was criticised by the UK Committee on Climate Change, which considered it not to be credible. We have taken the opportunity to look at it again and to use the capacity that we now have across the system to produce something that is considerably more achievable.

Claudia Beamish referred to agriculture. Over the lifetime of the plan, emissions from agriculture will fall by 9 per cent. I remind her that it is almost impossible to conduct agricultural endeavour without creating a certain level of emissions—it is not an area that can be emissions free. We have to work as well as we can with farmers to get them to move to the use of better practices. We have programmes in place that allow us to do that, and the 2015 statistics show that agricultural emissions are down by more than 25 per cent from baseline levels. We are making changes there, and we will continue to do so.

The statement mentioned a final plan that is “more ambitious” than and “very different” from the draft. It appears that the plan is indeed very different from the draft because, if we add up all the Scottish Government policies in the final plan, the result is 1 million tonnes of emission reductions less than would have resulted from the policies in the draft. Why is that the case? Does the Scottish Government still believe that, by 2030, we will be driving around in our cars a third more?

I do not want to repeat some of the things that I have already said in response to John Scott and Claudia Beamish. Mark Ruskell will have heard me talking about some of the reasons for the changes between the draft plan and the final plan and about many of the things that have happened in the time between.

On transport, the projections that are in the plan assume no change, but of course there will be change. It is one of the areas in which this Government will deliver the most. I do not see why members should feel pessimistic about it; we are doing very well and—certainly in comparison with the Westminster Government—we will do far better. I hope that Mark Ruskell will take that on board. As I have indicated, some of the things that I said in response to the previous two questions apply equally to Mr Ruskell’s question, but I do not want to repeat myself.

Environmental campaigners have called on the Scottish Government to do much more to cut emissions from domestic properties. Given the fact that 80 per cent of Scotland’s homes are heated by gas, will the cabinet secretary outline what that would mean in practice for public expenditure, the supply chain and householders?

It would be quite difficult and, in some areas, incredibly disruptive. In an earlier answer, I made reference to the fact that the independent adviser, the Committee on Climate Change, has already advised that the transition to near-zero emissions buildings is likely to take decades. We should be realistic about the contribution that the sector can make to the 2032 targets, and the Committee on Climate Change criticised the original ambition in the draft plan.

A key consideration that we must take on board is the risk of stranded assets where a less disruptive or competitive solution might be anticipated. We do not want to go in one direction and then discover that there is a better direction that we might have taken. Therefore, we will focus on policies that are relatively low cost and which provide relatively large benefits. That helps to optimise investment decisions in the near term but, in the meantime, there is also innovation, which will help in the longer term. We will work with partners and the UK Government to determine the best route to decarbonising the natural gas network through, for example, the injection of hydrogen.

We plan for the future of heat supply. We continue to deliver real measures on the ground. We are on track to deliver the 2016 programme for government commitment to make £500 million available for fuel poverty and energy efficiency measures over the four years to 2021. Arguably, some of the original proposals in the draft plan might have exacerbated the situation in respect of fuel poverty instead of solving it.

As Graeme Dey said, environmental groups have expressed concerns about some of the changes from the draft to the final plan. The existing homes alliance Scotland says:

“As Scotland Shivers, Government cuts warm homes ambition”.

It is right that the cabinet secretary has taken on board the points that were made about the deliverability of targets, but can she really justify the collapse in the target for low-carbon domestic heat from 80 per cent in the draft to 35 per cent in the final plan? What will that do to address fuel poverty, which, as the latest figures suggest, is again highest in my constituency?

I will reiterate a little of what I have already indicated.

I understand why members criticise. They have looked at a figure in the draft plan, looked at a figure in the final plan and perhaps not thought through carefully why there is a difference. I say again that the Committee on Climate Change advised that the draft plan’s targets were not credible. As a Government, we have to consider what is doable. It is interesting that, when I am asked questions about various aspects, I do not get any suggested solutions. I do not want to make that sound like a criticism of Liam McArthur.

There are real issues about making decarbonisation of domestic heat practicable and doable. We are working towards targets. Working towards the original targets would have involved making early decisions on low-carbon technologies, with a risk of backing the wrong solution. That would have ended up costing us considerably more—and “us” can mean the consumer.

Claudia Beamish and everybody else can shake their heads but what would they propose that we do? Should we go into everybody’s homes in the next five years and rip out all the gas central heating? Are members who are thinking about their own central heating proposals planning on doing that? There are some real issues about practicality, disruption and our ability to ensure that, as we move forward, people do not end up in a worse situation than they are in now.

I thank the Scottish Government for the support that it has given to the Acorn project in my constituency. It is one of a series of initiatives that underpin Scotland’s international reputation. How are other countries catching up with us? How are they using our example in their own domains? In particular, I am thinking of nations such as Sweden.

Scotland is frequently compared to Sweden. Despite the response of some members today, the traditional way to describe our position is that we are third in the world, behind Sweden and Finland, for tackling climate change. One or two things need to be said about Sweden: it does not include the land use sector, aviation or maritime emissions, unlike Scotland; it has no annual targets in the way that Scotland does; and it reserves the right to buy international carbon credits to make up 15 per cent of its emissions. We are not comparing like with like and, on one view, we are doing considerably better than Sweden. Objectively, some people say that we are third behind Sweden and Finland, but my point is that, when we compare ourselves, we are doing better. Perhaps we could claim to be the best in the world.

The ambition for decarbonising Scotland’s buildings has been dramatically reigned in to 35 per cent, even though the Committee on Climate Change suggested a target of 50 per cent. The CCC said that

“Achieving ambitious levels of low-carbon heating requires immediate action, rather than waiting until 2025”

and it described low-regret actions that could be taken now, such as new buildings, heat pumps for off-gas-grid homes, greater use of biomass and new district heating systems. Why does the plan say that low-regret and no-regret options for low-carbon heat will still be left until after 2025? If those options for decarbonisation are low regret or no regret, why is action not being taken in the short term?

An enormous energy efficiency programme that is funded to the tune of £0.5 billion is about to start in Scotland. I am not quite sure what the member thinks that programme is about, but I can tell him that it is particularly about that issue. As I have said a number of times this afternoon, the Committee on Climate Change advised us that our original targets were not credible. We now propose a balance between domestic and non-domestic and, in my view, a balance of ambition with realism. We are setting low-carbon heat targets of 35 per cent for the domestic sector and 70 per cent for the non-domestic sector, which are in line with the Committee on Climate Change’s assessment of what can be achieved.

Activity until 2025 will focus on low-regret heat decarbonisation technologies, such as the uptake of renewable heat technologies in individual buildings off the gas grid and support for low-carbon district heating in appropriate areas. Our proposals are in line with Committee on Climate Change advice, as a way forward, and I reiterate that some suggested possibilities would be a massive disruption in Scotland and almost impossible to achieve practically.

How does the Government plan to engage with new technologies to support the electrification of the transport sector?

Innovation is already at the heart of the Scottish Government’s low-carbon transport policies. It already supports international firsts on the use and production of hydrogen for transport, including the surf ‘n’ turf initiative in Orkney in Liam McArthur’s constituency. The programme for government commitment to end the need for new petrol and diesel cars by 2032 is another signal that Scotland can be at the forefront of innovation and new technologies. In September 2017, we launched a £60 million low-carbon innovation fund, which aims to support a range of new low-carbon projects in Scotland, including our ambitions on low-emission vehicles.

We continue to work closely with the energy sector and regulators to support future investment and innovation in areas such as smart grids and vehicle charging and refuelling, and we track emerging technologies and business models to better understand their potential impacts and the support that we can provide. Further announcements are coming in respect of those, which I should perhaps leave to my ministerial colleagues.

The cabinet secretary rightly said in her statement that significant decarbonisation in the industrial sector depends on continued access to the EU emissions trading scheme. What assessment has the cabinet secretary made of the effect of withdrawal from the EU ETS on the climate change plan? Has any work been carried out with the other UK nation states to develop a UK ETS?

It is fair to say that the EU ETS is the single most important policy instrument in driving down industrial emissions, and we continue to call for clarity from the UK Government as it prepares to leave the EU. Until last week, there had been almost no response whatsoever to that call. There is now an indication that some thought is finally being given to what the future might hold for an emissions trading system, although we are completely unclear about how that might look. Therefore, with the climate change plan, we have had to operate on the basis of the current scenario, which is a fully functioning ETS across the whole of Europe. It is clear that, if we do not continue to be part of that, there will be a significant impact that will require to be measured at that point.

The position is difficult. Ironically, the EU ETS is one framework that everybody agrees we need something in place of if we are not to join or continue to be part of it. However, thus far, precious little serious engagement and thought seems to have been given to the matter by Westminster.

I welcome the plan and the fact that Coatbridge has been earmarked as a targeted area for low-emission zones, given its high levels of pollution and social deprivation. Will the cabinet secretary explain the concept of carbon leakage and its potential implications for the Scottish economy in the context of Brexit?

Carbon leakage is a tricky concept. It occurs when industry simply relocates to jurisdictions with lower decarbonisation and emissions ambitions, and it results in the displacement of emissions rather than any overall reduction. Were businesses to move their operations, that would also have a detrimental effect on our economy.

Climate policies that introduce costs above those of other countries could negatively impact on the competitiveness of businesses with a lot of international trade. At the extreme, that could result in their relocating to countries in which there are more lax climate policies and lead to almost the opposite effect to the one that we are trying to reach. There would also be a risk of increased import dependence to source inputs and intermediate products for manufacturing processes. Those are already live issues that the business community is considering, given the uncertainties associated with Brexit.

As I indicated, we are currently a participant in the EU emissions trading system, which puts a price on industrial emissions and energy production throughout the whole of Europe and allows a level playing field. We remain of the view that continued participation in the ETS and UK regulatory frameworks would ensure that industry retained that wide level playing field, which protects against carbon leakage from competitors outwith the EU.

We continue to press the UK Government for clarity on its plans for emissions trading as it prepares to leave the EU. We do not want to end up in a situation in which, as a result of actions within the UK and Scotland, all that we do is export carbon emissions.

I apologise to the remaining two members who wanted to ask questions. We have run out of time.