Meeting date: Tuesday, January 15, 2019
Meeting of the Parliament 15 January 2019
Agenda: Time for Reflection, Topical Question Time, Carbon-neutral Economy (Just Transition), Business Motion, Parliamentary Bureau Motion, Decision Time, Paisley
- Time for Reflection
- Topical Question Time
- Carbon-neutral Economy (Just Transition)
- Business Motion
- Parliamentary Bureau Motion
- Decision Time
Carbon-neutral Economy (Just Transition)
The next item of business is a debate on motion S5M-15380, in the name of Roseanna Cunningham, on securing a just transition to a carbon-neutral economy.14:26
I have great pleasure in opening this debate on Scotland’s transition to a carbon-neutral economy, which is the first such debate for the Parliament. I expect that the Parliament will return to the issue of a just transition in one form or another many times, but I hope that we can reach consensus today on the type of transition that we want.
We all know that the central aim of the Paris agreement is to keep the global temperature rise to well below 2°C above pre-industrial levels, and to pursue efforts to limit it to 1.5°C. However, this debate focuses on the part of the Paris agreement that says that we must also take into account
“the imperatives of a just transition of the workforce and the creation of decent work and quality jobs”.
That is central to the Government’s economic strategy. In a happy coincidence, it was when I was the Cabinet Secretary for Fair Work, Skills and Training in 2015 that we established the fair work convention to identify and promote existing good practice. We have endorsed the convention’s vision that
“by 2025, people in Scotland will have a world-leading working life where fair work drives success, wellbeing and prosperity for individuals, businesses, organisations and society.”
Our taking into account the imperatives of decent work and quality jobs as we increase our efforts to tackle climate change is a natural step. The First Minister had no hesitation in supporting the “Solidarity and Just Transition Silesia Declaration”, which was adopted at the climate talks in Poland last month. That declaration stresses the need for a shift in thinking to recognise that decarbonisation and economic growth can and must go hand in hand.
Is the cabinet secretary aware that, largely as a result of President Obama’s efforts, there are 800,000 people in the renewables industry in the United States and only 50,000 in the coal industry? Here, where we have a more favourable environment, will we ensure that there will be excellent jobs in the renewable and other energy-source industries to which people in the oil industry, which has many years to go, will be able to migrate?
I am not sure that I was aware of the specific numbers of people in those employment sectors in America, but I was aware of the general sense that coal plays a less great part than renewables and that the President was perhaps not entirely aware of that. It is important to remember that the kind of transition that we are talking about can be disruptive if it is not handled carefully and well.
As I was saying, it is very important that we see decarbonisation and economic growth going hand in hand. The “Solidarity and Just Transition Silesia Declaration” notes the importance of social dialogue for promoting high employment rates and wellbeing in plans to reduce emissions, and it highlights the importance of sharing experience internationally. I will touch on all those points during my speech.
Emissions of greenhouse gases from Scotland have almost halved since 1990. During that time, we have seen Scotland’s gross domestic product increase by 55 per cent, and unemployment has fallen to 3.7 per cent, which is its lowest rate on record. Between 2007 and 2016, Scotland’s productivity growth was higher than that of any other country or region of the United Kingdom, including London. Evidently, then, we do not have to choose between tackling climate change and growing the economy. We can, should and must do both.
We need a carbon-neutral future in which domestic industry continues not just to exist but to thrive, and it will take global effort if we are to avoid industry just bailing out to low-regulation countries. That is why our economic action plan focuses on ways to enhance support to business, places and people across Scotland. The aim is explicit: to put Scotland at the forefront in the transition to a carbon-neutral circular economy. For example, the £12 million transition training fund that is targeted at the oil and gas sector and its supply chain is helping people who have been made redundant or who are currently at risk of redundancy to retrain or upskill.
In transport, we are working with the energy skills partnership and others to make sure that support is available to develop the skills that are required to maintain and service ultra-low emission vehicles. We are also working with energy-intensive industries, building on existing programmes of support, to incentivise decarbonisation so that it is seen as an economic investment opportunity rather than a threat.
There are economic opportunities from being at the forefront of the global shift to carbon neutrality, but there are also risks and challenges that we cannot just wish away. Previous economic shifts, such as those in the 1980s, have left scars on our communities. History must not be allowed to repeat itself; decarbonisation should not happen at the expense of our workforce and our communities.
There is a real opportunity for us, now, to think about how we want our transition to carbon neutrality to be effected. It is an opportunity to consider whether the changes that are needed to reduce emissions might also present opportunities to tackle inequalities and increase regional cohesion.
Whatever climate targets Parliament decides on as we debate the Climate Change (Emissions Reduction Targets) (Scotland) Bill, we know that there will be difficult but necessary decisions ahead as we do our bit to limit global temperature rise. Those decisions will impact all sectors of the economy and all our constituents. It is vital that we start a conversation now, and make sure that all voices are heard.
To begin that work, I have, as members know, established a just transition commission. Over an initial period of two years, it will explore how to apply the principles of just transition to Scotland: how we can plan, invest and implement a transition to environmentally and socially sustainable jobs, building on Scotland’s strengths and potential; how we can create opportunities to develop resource-efficient and sustainable economic approaches that help to address inequality and poverty; and how we can deliver low-carbon investment and infrastructure and create decent, fair and high-value work in a way that does not negatively affect the workforce and the overall economy. That work will show how overarching the just transition is.
Members now know that the finance secretary will close this debate, but equally it could have been closed by Aileen Campbell as the communities secretary. Our three portfolios have a strongly invested interest in ensuring that the just transition works as effectively as possible. These are cross-cutting issues, so the just transition commission will report to three separate cabinet secretaries, albeit that the issue primarily sits in my portfolio, which is for management reasons as much as anything else.
Our approach is similar to that of other states and countries that, like us, are at the vanguard of considering these issues. Last year, New York state established an environmental justice and just transition working group, and the Canadian Government set up a task force on a just transition for Canadian coal-power workers and communities. Both groups are non-statutory and tasked with providing advice to ministers.
Our commission is similar. It is chaired by Professor Jim Skea, an internationally renowned climate scientist and co-chair of the Intergovernmental Panel on Climate Change mitigation working group. Until the end of last year, he was also the Scottish champion of the Committee on Climate Change. Professor Skea will be joined by 11 others representing a broad range of interests and sectors. Two environmental groups are represented: WWF and the 2050 Climate Group, which is a youth-run charity that empowers young people to tackle climate change. Trade unions are represented by Prospect and the Scottish Trades Union Congress. There are two renowned academics, four businesspeople from the chemical, oil and gas, renewables and farming industries and an expert on fuel poverty from the third sector.
Although broad membership of the commission is necessary—and should result in some helpful if occasionally heated debate—it is not in itself sufficient. The commission needs to reach out to and hear the opinions and concerns of people across the country. For that reason, I have tasked it with engaging meaningfully with workers, communities, non-governmental organisations, business and industry leaders and others across Scotland. In addition to having a representative of a youth group on the commission, I have asked it to seek and consider young people’s views. I want the commission to hear and be open to all points of view.
The commission will provide a set of recommendations for maximising the social and economic opportunities of moving to a carbon-neutral economy, for building on Scotland’s strengths and assets, and for understanding and mitigating the risks that could arise. I know that there are calls for the commission to be established as a statutory body and for it to last for more than two years. The way in which we have established it means that it can begin its work later this month and provide its recommendations in early 2021.
Of course, the work that is needed to deliver a fair transition to carbon neutrality cannot be done in two years; the commission is a first step and, although I believe that the principles of a just transition are the right ones for the coming decades, whether a commission will be needed over the same timescale is not clear. There might be alternative ways to embed the principles across the public and private sectors.
To an extent, we are already doing that. The pace at which the energy efficient Scotland programme is delivered, for example, is being carefully considered because of the fine balance between tackling fuel poverty and reducing emissions from domestic heating systems. We can—and must—do both simultaneously, but that requires careful planning while low-carbon heat technology is still the more expensive option. We must avoid tackling climate change at the cost of increasing fuel poverty, and vice versa.
The transition to a carbon-neutral economy provides a huge opportunity for jobs and skills. Energy efficient Scotland alone is forecast to support 4,000 jobs across the country once it is fully operational, and it is estimated that more than £12 billion from public and private sources will be spent over 20 years. As much as possible, we want the supply chains and the skills that are needed to come from within Scotland, including rural and remote areas. That means delivering the programme at an ambitious and realistic pace that allows for training and upskilling of local people to undertake the work in people’s homes.
I hope that our progress with energy efficient Scotland, the just transition commission and programmes such as the transition training fund will provide useful exemplars for other countries as they consider what a just transition should look like for them. Scotland is recognised internationally as a world leader in tackling climate change, and our approach to a just transition is also attracting attention. Last month, the UK Energy Research Centre recommended that the UK Government
“should consider setting up a process similar to Scotland’s Just Transitions Commission”.
In Poland last month, at the 24th conference of the parties to the United Nations Framework Convention on Climate Change, the First Minister and I heard directly about approaches that are being taken in other countries, including Spain and New Zealand. At an event that the International Trade Union Confederation convened, I spoke of my desire for the just transition commission to engage widely and provide practical advice on embedding just transition principles.
In parallel to that, I mention that a just transition is a key ask of the International Trade Union Confederation, so I was a little surprised to see the response to the debate that was posted on the GMB’s website today. I hope that that arose more out of a misunderstanding than anything else. As I expect other members are, I am willing and able to talk directly to the GMB should it require that.
It was clear at the COP in Katowice that our work in Scotland has been noticed. We must continue in that fashion, which involves learning from others and sharing our learning with others. Our approach needs to be positive and optimistic about the opportunities that stem from decarbonisation, while being honest and up front about the challenges and risks. We need to build on our strengths and potential, and decarbonise as we grow an ever more inclusive economy.
We must transition to carbon neutrality in a way that is fair for all. That approach has guided my response to the amendments. We will accept the Conservative and Labour amendments, but I have concerns about the Green amendment, which we will not accept.
That the Parliament supports the application of just transition principles in Scotland, acknowledging the need to plan, invest in and implement a transition to carbon-neutrality in a way that is fair for all.14:39
I refer members to my entry in the register of members’ interests. I welcome today’s debate and the Government motion, and I agree with the cabinet secretary that we can tackle climate change and grow the economy.
The recent Intergovernmental Panel on Climate Change report on the impacts of global warming of 1.5°C delivers a sobering assessment of what lies in store for humanity if we fail to combat climate change, with tens of millions of people around the world facing drought, billions being subjected to extreme temperatures and biodiversity being dealt a devastating blow.
Scotland would not be spared: communities here would face increased flood risk. Our coastal towns, villages and homes would be threatened with oblivion—and that is before we consider the impact on our flora and fauna. Scotland is making progress, though, and our overall emissions are down by almost 50 per cent from 1990 levels, which is something that we can all welcome. However, progress has been lopsided: although we have seen our energy and waste sectors decarbonising, other areas—for example, transport—have seen little or no change.
More needs to be done if we are to meet future targets, but we must ensure that we are taking action that creates opportunities, rather than burdens and barriers, for individuals and businesses. The low-carbon future that we all want should be a future in which we all benefit.
Unfortunately, it has not always been the case that take such action. We should, for example, be proud of the remarkable growth in renewables that has allowed many communities across Scotland to access new funding streams to improve infrastructure and services. However, Scotland missed out on a massive opportunity when 20,000 low-carbon jobs that could have been created here in Scotland did not materialise. Our missing out on those jobs is a lesson that we should learn from, as we seek to establish a deposit return scheme and to decommission more North Sea oil and gas facilities.
Arguably, the oil and gas sector is most emblematic of the need to ensure a fair transition to a low-carbon economy. As the just transition partnership has pointed out,
“There has been little planning to ensure the protection of the people most affected, in particular those who work in sectors reliant on fossil fuels”.
That will not be achieved by tinkering around at the edges of our current system. We need a new model that is fairer, more sustainable and intrinsically better for our environment.
Does Maurice Golden agree that perhaps the oil and gas companies could do a little bit more to invest in renewable energies and to fund research and development to preserve their future?
I agree that oil and gas companies could do a lot more, even in terms of helping us to decommission and to get the most value from decommissioning. For example, infrared coding of oil and gas platforms to signify what alloys the platforms contain would allow us to decommission those facilities better.
There is also a lot more that companies could do to improve things in terms of design of facilities. We see that in the aerospace industry regularly, but there has, in the oil and gas sector, been overall reluctance to embrace resale of assets and even to keep paperwork so that turbines and generators can be sold on to other markets. There is a lot more that oil and gas companies, and the sector as a whole, can do.
The overall solution that answers Gillian Martin’s question and the one that I have posed in my remarks is to have a circular economy strategy. That option is the one that is best placed to capture as much value as possible from the estimated £50 billion that could be spent on North Sea oil and gas decommissioning by 2040. That represents an opportunity to create jobs in the north-east, and supply chain jobs throughout Scotland. We must look to reuse assets such as pipelines either within the industry itself or in other sectors such as construction, to which they are worth more than five times their scrap value.
Across all sectors, and according to Scottish Government reports, an ambitious circular economy programme could add more than 40,000 jobs to our economy, on top of the estimated 56,000 jobs that already exist. The jobs would have the potential to reduce unemployment in areas where jobs are most needed, and would have a high degree of durability, so that they would be likely to survive the hollowing out of the labour market.
The size of the prize is massive, which means that we must be ambitious. We have rightly set the bar high for the environmental side of our low-carbon transition; the same standard should apply to the economic aspect. That will require us to reassess how the Government leads on low-carbon policy. A good start would be to embed circular economy practice across all portfolio areas, and to make it a marker against which to judge future policy decisions.
Beyond that, we must see a deepening of the relationships between education, business and the third sector. The Scottish Conservatives have proposed the creation of new institutions including a design academy and an institute of reuse to help to co-ordinate such activities. That unified approach would allow us to identify better where to focus our efforts, which would enable a low-carbon economy that is driven by problem-led challenges that are relevant to Scotland.
For example, constraint payments are at a record high, but why pay energy providers to turn off production when we could use excess power to facilitate an electric arc furnace that recycles steel, while giving Scots jobs? That is an example of the joined-up thinking that produces better environmental outcomes, further reduces waste and generates additional economic activity.
Rural Scotland also stands to benefit greatly from that approach, and the Scottish Conservatives recently announced a package of measures to support food producers. We believe that we can offer those businesses the ability to recycle more and to extract more value from the waste that they produce, all while driving down costs and offering rural communities a bigger stake in our low-carbon economy. That would involve setting up a microplastic recycling facility and waste hubs, which would solve the problem of what farmers do with plastic waste, now that there is a ban on incinerating it. It would also help the environment as well as create jobs.
We have also proposed helping farmers and other food producers to set up on-site anaerobic digestion, including providing capital and technical support, which would allow production of energy and heat that would directly help them to lower their bills. Across Scotland, the proposal has the potential to generate an extra £27 million in value from energy generation. There is also the potential to work cross-sector by using excess heat to dry food waste in order to make it easier to transport for biorefining—an industry that could be worth £900 million by 2025.
If we want a truly just transformation, surely the way to go about that is to focus our efforts on the needs of Scottish families and businesses, and to encourage innovation and economic activity that use Scottish insight, Scottish workers and Scottish resources, in order to provide everyone with an opportunity to grow and prosper.
Of course, transforming our economy is not without risk, so we must be alert to the obstacles that we face when we ask individuals and businesses to invest in Scotland. The most obvious obstacle is our size: on many fronts Scotland simply cannot outspend larger competitors or field initiatives of the scale that they can field. One solution is to specialise by progressing a handful of strategies that best suit our needs, while we also benefit from large-scale projects that operate at UK level.
Having looked at the other amendments to the motion, we are interested to hear from Scottish Labour, but overall we are comfortable with the current situation and do not feel that there is a requirement for a statutory commission. In respect of the Green amendment, the end of our oil and gas sector should not happen just by any manner or means, so we are not at all comfortable with the proposition that is set out in the amendment.
We believe that innovation is what drives economies forward. Hand in hand with transitioning to a low-carbon economy, we should be building a culture that rewards those who are willing to experiment and to push the envelope of success. Success is what we need to ensure that the transition to a low-carbon economy is positive for every family, community and business.
I move S5M-15380.2, to insert at end:
", and believes that implementing a circular economy strategy for Scotland is an effective and sustainable way to bring about this transition."14:50
This debate on just transition principles is very significant for the fair future of Scotland’s economy and society in the global context. My party will support the Scottish Government motion, which recognises how essential a just transition is as we shift to carbon neutrality and net zero emissions. Just transition principles are fundamental to the international labour movement, and I am pleased to speak today on behalf of Scottish Labour.
Last year’s special report by the Intergovernmental Panel on Climate Change told us that 0.5°C of warming would put hundreds of millions of people at risk of climate-related poverty. Governments the world over need to really hear and heed that message and plan now for climate justice. That means safeguarding the rights of the most vulnerable and sharing the burdens and benefits of climate change mitigation equitably. It means Scotland delivering its fair share, on a global scale, and applying those principles to protect people here in Scotland, too, including future generations. That is the Scottish Labour way, which I and others will expand on.
As the cabinet secretary said, the climate change negotiations—or COP24—that were held in Poland had a strong focus on a just transition. It is fantastic to see the mainstreaming of the term and to see the 54 world-leader signatories to the Silesia declaration, including the UK signatory and our First Minister. It is such human-rights based thinking that led to Scottish Labour’s target for net zero greenhouse gas emissions by 2050 at the latest, and an interim target of a 77 per cent reduction in emissions by 2030, in order to drive action with urgency. However, a statutory and long-term just transition commission is a vital companion to that ambition.
In that context, it is with relief that I hear today that the Scottish Government will support our amendment. I am eager to discuss with the relevant cabinet secretaries how the proposal might be considered. I feel so strongly about Scottish Labour’s position on the commission because, across the planet, there are too many tragic examples of communities and local people, both now and in the past, being deeply affected and left behind by fundamental change, both good and bad. Too many have lost out and been excluded. As an ex-community councillor in the Douglas valley, I witnessed the effects of the failure of Government to robustly intervene and support communities after the rapid closure of our deep mines. Such effects on communities have been callous, long lasting and unacceptable. We have a collective responsibility to plan strategically.
The updated membership of the commission is welcome, as Scottish Labour is absolutely clear that a commission without trade unions or those with current industry experience would be a sham. I recognise that the Government does not want to create an inexhaustible list of members, but I note a lack of direct representation for the transport, education and planning sectors. Having said that, I wonder whether the cabinet secretary highlighted today that there might be transport representation. Do the cabinet secretaries feel confident that the membership reflects all the key areas of concern?
The just transition commission must be statutory and long term. That will ensure that, whatever Government we have in Scotland until we reach net zero, fairness and climate justice—here at home, too—will be at the core of our decision making. There is Scottish Government precedent for that in the Scottish Land Commission, as land reform is an equally long-term shift.
To aid formulation of the just transition commission’s recommendations, we are also keen that it should be properly funded, with a well-resourced secretariat. It is really important that the commission is independent of Government and is accountable to our Parliament, which will aid the confidence and respect of all for its deliberations.
Will the member take an intervention?
Very briefly—this is an important part of the debate.
There is time for interventions, Ms Beamish. I call Stewart Stevenson.
Given that Claudia Beamish advocates a parliamentary line of responsibility, does she expect the appropriate member of the corporate body to be the person who would come to stand at the front to answer questions from members about the operation of the body? If it were a Government body, we would hold a minister to account.
I understand Stewart Stevenson’s point, about which there is a debate to be had. It is important that the commission is independent of Government—there is precedence for that—and goes beyond each Government. The whole Parliament should take responsibility for it. As for who would stand at the dispatch box, I cannot answer that at the moment.
On issues beyond the commission, the just transition partnership is a fundamental part of the way forward. I pay respect to the grouping and its collective positive work. The partnership is significant, not least because it has enabled unions and NGOs to work together and develop supportive strategies and engagement with politicians and others as just transition has evolved. Labour identifies strongly with its briefing.
We will not support the Green amendment, although we agree with Mark Ruskell on promoting renewable energy and building into Government policy the principles of a just transition. We look to the just transition commission to engage with all existing industries, including the energy industries, on what part they will play in the just transition.
All sectors are increasingly playing their part in the process. Of course, the heavy emitters will need the most support as we progress. The farming industry needs attention, and if the food and farming sector is to do the job that we want it to do, we should look to the 2030 sustainable development goals—the Government has to pick up the pace of change. The commission must also consider transport and our domestic and commercial buildings. My colleague Lewis Macdonald will talk further about the energy sector.
Skills are the best insurance for Scotland’s future, and providing support for education, skills and training is vital to maximise the opportunity to change the labour market. That is a central tenet of Scottish Labour’s industrial strategy. Such forward-looking planning with industry will avoid all-too-persistent skills shortages at many levels of industry.
There is clearly an obligation for businesses to engage positively with the process and a need for guidance and support from Government and from the enterprise agencies. Some form of obligation on businesses that are heavy emitters to actively contribute to the transition should be discussed further, and there is a need to support businesses of all scales that are developing new technology. There are two such businesses in my region: Sunamp, which manufactures heat storage systems; and MacRebur, which creates road surfaces with plastic input. We will support the Conservative amendment on the circular economy.
With appropriate financing, the shift to a net zero economy could be transformative. Scottish Labour’s industrial strategy sets a focus on developing the economy of Scotland
“by increasing its diversity with a focus on creating sustainable high quality employment, ensuring that the new jobs are environmentally friendly and broadening our export base.”
UK Labour’s industrial strategy follows suit, with the national transformation fund committing £250 billion over 10 years to be shared across all parts of the UK.
Setting the right investment criteria for the Scottish national investment bank is an opportunity to power innovation and accelerate the just transformation. A shift to reinvesting pension funds in local initiatives and sustainable industries is an opportunity to protect the funds that people will rely on after retirement while moving justly towards a fair, renewable future.
We must never forget that there are multiple benefits to getting the necessary shift right. I highlight three: cleaner lungs and better hearts as we move to less air pollution through the use of electric vehicles and more active travel; better mental and physical health as we move to more safe walking and cycling opportunities; and improved physical health through tackling fuel poverty and creating warmer homes, which is a UN right. However, none of that can happen in a fair way without a robust just transition process. Labour is fully committed to working with all who will work us and, of course, with the Scottish Government and others who have a similar vision for how Scotland can achieve that.
I move amendment S5M-15380.3, to insert at end:
“, and further supports the just transition process through giving further consideration to the establishment of a statutory, long-term just transition commission, which should be well-funded, independent of government and accountable to the Parliament, building on the work of the present non-statutory commission.”14:59
How we respond to the climate emergency while guaranteeing the economic security and wellbeing of everyone in our society is surely the most pressing issue of our age. We cannot afford to condemn whole communities to the kind of crippling intergenerational poverty delivered by the collapse of the coal-mining industry in the 1980s—a tragedy that we still live with today through the legacy in those communities. We have to put in place a just transition that leaves no one behind, and we must take the kind of strong human-rights based approach that Claudia Beamish spoke about.
That is why the Scottish Greens support the Scottish Government’s just transition commission, although we will work to ensure that the principles set out by the International Labour Organization are embedded in Scotland. That includes building a strong social consensus on both the goals and pathways of a just transition, getting the dialogue going within and between all levels of policy making, and taking action on the ground. However, the most important principle is that the transition creates decent jobs and provides protections against job losses as well as training and skills.
The work that the just transition commission will undertake is important and long term. It is inconceivable that it will be in place for just two years. That is why we will lend our support to the Labour amendment, which seeks to put the commission on a more solid, statutory footing.
The Green Party amendment deals with the principles of a just transmission and calls for them to be applied across all infrastructure planning, projects and policy. Stepping up investment in Scotland’s infrastructure, including low-carbon energy, transport and housing, while reducing or even eliminating investment in high-carbon infrastructure, is key.
We welcome the Scottish Government’s plans to establish a Scottish national investment bank and particularly welcome the reassurance that the bank would seize the economic opportunities of tackling climate change. We believe that the bank must adopt a mission-oriented outlook from the start. That approach has been defined by the economist, Professor Mariana Mazzucato, who is also a Scottish Government adviser. She said that, in a mission-oriented approach, the Government sets a broad direction for the just transition economy, introducing the top-down legislative measures that are required, while policymakers, stakeholders and businesses at the local level design bottom-up solutions to deliver the changes. Mazzucato argues that it was that kind of thinking that allowed the United States to put a man on the moon. The same big-picture thinking is needed to make the just transition a success.
The Green Party amendment addresses the context in which the just transition would have to happen. Our global dependence on fossil fuels is driving the climate to breaking point. All the Governments across the world now need to face up to tackling an emergency. We will not achieve that if we focus only on the opportunities presented by low-carbon technologies. We must also build independence from fossil fuels and act to ensure that at least some are left in the ground and out of the atmosphere.
Both the Scottish and UK Governments favour a policy of maximum economic recovery of oil and gas reserves, but at what cost? The science suggests that we must leave the vast majority of known fossil fuel reserves in the ground. A 2015 report in the journal Nature advised that one third of the world’s oil reserves and half of its natural gas reserves must be off limits if we are to have any hope of meeting the temperature targets set out in the Paris agreement.
Climate leadership is springing up around the world. In April 2018, the Government of New Zealand announced that it would grant no new offshore oil exploration permits. The New Zealand Prime Minister, Jacinda Ardern, stated that that was part of her Government’s plan to transition to a carbon-neutral future. That is a plan that looks 30 years in advance. She said that it would bypass the risk of acting too late and causing abrupt shocks to communities. That is good planning. Will we have such climate leadership from the Scottish Government on that front, too? In the same week that the First Minister attended the climate talks in Bonn, her party’s members at Westminster voted for £24 billion-worth of tax relief for that industry over the next 40 years—yes, £24 billion is the right figure. That tax-break money would be better directed at renewables and decommissioning.
The Green report on jobs and the new economy highlighted some of the opportunities that might come as a result of taking that approach. Our research suggests that more than 100,000 new roles could be created in offshore wind, more than 20,000 in decommissioning and around 19,000 in building retrofitting. New jobs would also be created in training and education to support those roles and ensure that workers had the skills needed for the new economy. Those are high-quality, skilled jobs and, unlike those that rely on non-renewable resources, they are secure.
Ultimately, we need to take heed of the demands of the Paris agreement and the recent warnings from the IPCC. We have 12 years to drastically cut emissions and avoid the most devastating consequences of global warming. Our actions during the next decade will determine the impact of climate change here in Scotland and overseas. Setting stretching targets now could drive the innovation that is needed to spark the just transition and mitigate the most damaging effects of climate change.
We want increased ambition in our 2030 targets to hasten that drive to net zero. The purpose of targets is to send the strongest message to drive innovation, especially when future paths are unclear. The mission-orientated policy approach advocated by Professor Mazzucato can help to solve some of the most intractable challenges of our times, but that needs bold Government leadership.
The earlier the transition begins, the better our chance of achieving a fair and just approach to tackling the climate emergency—an approach that can deliver prosperity and wellbeing and the reindustrialisation of communities that were cast aside decades ago. It can mean a rebirth, not an ending, and a viable future for our world.
I move amendment S5M-15380.1, to insert at end:
“; recognises that global fossil fuel reserves far exceed the amount that can safely be used without causing catastrophic climate change; agrees therefore that the policy of maximum economic recovery of oil and gas, as advocated by both Scottish and UK governments, is incompatible with the Paris Agreement or with the goal of a just transition; supports an accelerated roll-out of renewable energy and decommissioning projects, creating secure and high-quality employment opportunities, and calls for the principles of a just transition to be embedded across all government infrastructure policy, planning and projects, including the national investment bank and publicly-owned energy company.”15:06
Today’s just transition debate enshrines the importance of building a fairer and more equal society while transitioning away from carbon-dependent industries, but we must also recognise the impact on working people and communities across Scotland that depend on high-carbon sectors, notably oil and gas, and the alternatives.
Scottish Liberal Democrats have consistently forced the pace in countering climate change threats. We established the first-ever renewable electricity targets and set up the Green Investment Bank. We have also pressed for incentives to help people to switch to ultra-low-carbon vehicles and for the right fuel poverty policy to make our homes warmer.
In today’s debate, and in the work of the commission that the cabinet secretary has set out today, there needs to be a particular focus on those sectors in which emissions levels have barely budged since 1990, which include buildings, agriculture and transport. Even though technology is getting cleaner, transport is still immeasurably challenging because of increasing demand and poor uptake of alternatives. That is why we do not support any plans for a £250 million tax cut for aviation. If I can encourage the Cabinet Secretary for Finance, Economy and Fair Work to act in one area, it would be in relation to today’s publication of a glowing press statement from Edinburgh airport, saying how well it is doing. Its growth and record number of passengers do not suggest that the industry is in great need of the cabinet secretary’s largesse, given that there are many other areas of pressing need, not least in environmental policy.
Before Christmas, EnQuest, the current operator of the Sullom Voe terminal, held a commemoration dinner to recognise 40 years of production. My whole life, as an islander, I have seen changes in the oil industry, which is literally on our doorstep. Oil and gas in Shetland still employs 150 to 300 personnel on site—and that is just the direct jobs. In the past year, 66 oil tankers went through Sullom Voe, exporting 5 million tonnes of oil—105,000 barrels per day; and 17 per cent of the UK’s undiscovered gas reserves are located west of Shetland. Total has made gas finds there and Chevron has sold the Rosebank field to Equinor, which was previously known as Statoil. There is a huge role for the Oil and Gas Authority in oil and gas export routes.
Given the context for the debate, the important point is about the Sullom Voe terminal’s environmental standards. The Shetland standard, which was put in place many years ago, cannot be compromised; yet EnQuest has declared its intention to save £50 million per annum on the terminal’s running costs. Shetland depends on our coastal waters to fulfil the potential of the £300 million seafood industry, as does the Government—the food and drink sector and export numbers would not look much without the salmon that is grown around Scotland’s coastlines. Therefore, cutting pollution control and readiness at the terminal is not acceptable. Shetland lived through the Esso Bernicia and the Braer spills. West of Shetland is a highly challenging theatre of operation. I expect—and Shetland expects—the oil and gas industry to maintain the highest standards of environmental protection and readiness in the event of any oil spill. I ask the Government to recognise that argument and to maintain a watching brief through the appropriate government agencies, including the OGA.
On Maurice Golden’s earlier point, the oil and gas industry is changing. Just before Christmas, Shell announced that it was changing its executive pay policy and, from 2020, linking that to carbon emissions; linking pay to hitting targets is a novel approach in the commercial sector—one that we might even try in politics one day, although I suspect that that might be going too far. [Interruption.] Don’t tempt me. Certainly, it is important to recognise that there is some change there.
As the cabinet secretary rightly said, we need a sense of realism in policy development in relation to oil and gas. By 2035, the maximum impact of alternative technologies will reduce UK oil and gas demand only to around 100 million tonnes of oil equivalent, which is more than the oil and gas UK industry will produce, according to current forecasts.
Dave Moxham of the just transition partnership said to a parliamentary committee:
“There is a tendency to look at the issue in straight quantum terms rather than to look at the quality of jobs and particularly middle-income jobs ... many people who previously worked offshore now work as labourers. There is nothing wrong with labouring work, but it is not particularly good for an economy that people who were on £40 an hour now work for £10 an hour.”—[Official Report, Environment, Climate Change and Land Reform Committee, 15 November 2018; c 23.]
That is a notable point that the Government might wish to bear in mind. The oil and gas industry remains a hugely valuable asset to the UK, currently supporting around one out of every 100 jobs in the UK.
Angus McCrone, of Bloomberg New Energy Finance, said:
“Electric vehicles ... account for only part of oil demand. Cars account for only about 20 per cent of world oil demand. Even on our very aggressive forecasts for electric vehicle uptake, we see only about 7 million barrels of oil per day being taken out by 2040 as a result of electric cars and buses.”—[Official Report, Environment, Climate Change and Land Reform Committee, 15 November 2018; c 27.]
Overall demand for oil and gas in the UK in 2017 was around 150 million tonnes of oil equivalent per year, which was a 15 per cent reduction on 2008—such change is another notable feature. Given that UK oil production was around 90 million tonnes in 2017, even if alternative technologies were exploited to the maximum extent, UK production would not surpass the level of demand.
I do not think that there is a contradiction between supporting an indigenous oil and gas industry—which supports hundreds of thousands of jobs and is already going through significant change—and supporting climate change action across Scotland, Europe and the world. Eighty per cent of the UK’s 27 million households are heated by natural gas, which has helped the UK to reduce emissions; it can be a transition fuel for the future.
Presiding Officer, if I may, I will make two brief points on agriculture, as other members mentioned it, too. It is important to recognise both that UK emissions from agriculture declined by 14 per cent between 1990 and 2016; and the dichotomy in existing policy, with high costs for new entrants into farming—and even crofting—and reductions in support payments. That will lead to two directions of travel for farming communities: larger farms—agribusinesses—will have the resources to invest in climate-emissions-reducing technologies; while small units and crofters will struggle to do so. Reducing the subsidy that could negate some of the risks of investment might further remove the incentive for smaller, sometimes part-time businesses to participate, thereby creating further inequalities across agriculture.
Backed by the National Farmers Union Scotland, the farming for a better climate initiative is good and I hope that the finance secretary will look at the funding for both that project and the task force that the Cabinet Secretary for Rural Economy mentioned in the Parliament last Thursday. If we genuinely want to see a shift, the £375,000 spent in that budget line might need to be reconsidered. Current agri-environment payments, which are important across most of Scotland, are based on income foregone and do not always provide sufficient incentive compared with the risks of participation. The task force needs to give further thought to that area.
In winding up, I recognise the importance—
No, I have been generous. I ask you to conclude, please.
I hope that other members will back the Labour and Tory amendments, but I will not be backing the Green amendment.
As members will have guessed, there is some time in hand for interventions, so I can be a bit elastic on the six minutes, but not so elastic that it snaps—members have perhaps six and a half minutes, but not too much more.15:14
I want a low-carbon future, I want Scotland to play its full part in the fight against climate change and I want to have spent my time as a representative in the Parliament helping to ensure that our decisions put in place the mechanisms and systems that will ensure that we are not storing up catastrophe for our kids and their kids in the future.
I agree with Mark Ruskell that there is no greater issue for the world’s Governments today than climate change. I have been listening to stakeholders’ views on our efforts to reduce carbon emissions in Scottish society and sectors, but I am acutely aware of the importance of ensuring that our decisions do not destroy communities and people’s livelihoods. My parents had their lives turned upside down as a result of the destruction of the sector that paid my father’s wages in the 1960s and 1970s. My parents are from Clydebank and my dad was an engineer in John Brown’s shipyard. Oil and gas gave my family a lifeline. In 1977 or 1978, my mum and dad packed us off to Aberdeenshire to ensure that we had a future and that my dad had a second chance as a planning engineer, not of ships but of drilling and production installations in the North Sea. Many of their friends did not make the move to the north-east and many of my dad’s friends never worked again.
If we multiply my family’s story thousands or maybe hundreds of thousands of times, then add the next generation of native north-easters who have been working in the industry since they left school and have known nothing else, and then add in the wider economy that oil and gas prosperity has engendered, we might start to get a picture of the impact that a transition away from fossil fuels could have on my part of Scotland and the people I represent, if it does not take into account the need for the shift to be just, planned, managed and resourced.
As members can probably tell, the issue is deeply personal for me. The past two years have been very tough for many people I know who have either been wondering whether they will keep their jobs or have lost theirs. The north-east should be at the forefront of all our minds as we move towards our shared ambition of transitioning away from the burning of fossil fuels. I welcome what the Scottish Government has already done in that regard, particularly through investment in offshore wind, the city deals, the transition training fund and on-going substantial infrastructure investment, particularly in rail. I welcome the Cabinet Secretary for Rural Economy’s remark that oil and gas industry representatives will be included in the just transition commission.
Does our emissions ambition mean the end for oil and gas? No—nowhere near it. We will continue to need feedstock for chemicals and manufacturing into the foreseeable future. In this entire chamber, there will be not one item among the furniture that we are sitting on, the clothes that we are wearing and the building that we are housed in, that does not have an element of oil-produced material. Similarly, in considering viable low-carbon alternatives to diesel and petrol to fuel our vehicles, we can look at hydrogen, as we are already doing in Aberdeen city. Hydrogen manufacture will be dependent on the feedstock coming from our offshore reserves, particularly of gas. Last week, a German start-up called Sunfire was given €25 million of investment from the steel industry in Germany to power steel plants with hydrogen. We have a good opportunity to supply that kind of fuel.
We have not only the material resources that will power manufacturing and low-carbon alternatives but the expertise and supply-chain capability in the oil and gas industry that will be vital as we explore the alternative renewable energy that we will need to revolutionise transport and heat our homes, schools and hospitals. We must harness that now and put in place plans for the north-east to be the energy capital. We should be manufacturing the hardware that we can use for that revolution and exporting our hardware and expertise all over the world, as we have done for decades in oil and gas. We need to invest in research into new technologies, as we are doing with Hywind and with wave and wind power. We need to scoop up kids from schools into engineering training that is focused on the renewables revolution and that has the same guarantees of jobs at the end of it as such training in the oil and gas sector has had for nearly two generations.
On Friday, I was proud to join my colleague Paul Wheelhouse in the north-east village where I grew up, Newburgh, to officially open the national decommissioning centre there. I am excited about what groundbreaking technologies it will produce. Decommissioning is not the consolation prize as we transition; it is just one of a suite of investments that we have to make to safeguard the livelihoods of those in the north-east. Those investments cannot just be the Government’s responsibility, which was the substance of my intervention on Maurice Golden. I asked him about the responsibility of private companies in the oil and gas industry as we look for an alternative to burning fossil fuels.
The Climate Change (Emissions Reduction Targets) (Scotland) Bill means that Scotland will have the toughest climate change legislation in the world. By the end of the parliamentary process, it might have become even tougher. Scotland is stepping up to the challenge. The huge potential tor new jobs and the opportunities arising from the transition towards a low-carbon economy must have a north-east focus wherever possible. We are skilled, we are diverse and no transition should ever have the same negative legacy for communities as shipbuilding communities faced in the 1970s. I know that the Scottish Government is focused on that, and I will continue to argue for decarbonisation alongside arguing for the north-east to be at the epicentre of our bid to realise that ambition.15:20
As I did in my speech last week, I will start on a positive note and commend Scotland for performing well on reducing its greenhouse gas emissions, which has led to our country’s meeting our annual legislated target for 2016. That means that our pollution levels are now 49 per cent below those recorded in 1990. However, there is always room for improvement, which will be possible only if our policies begin to reach into all sectors of our society and industry—particularly those that have not contributed as much as others thus far.
I refer members to my entry in the register of members’ interests.
As a member of the Scottish Parliament who represents a rural constituency, I take the opportunity to raise the rural sector’s issues and ask questions when discussions take place on transitioning to a carbon-neutral economy. One in 10 of Scotland’s jobs is in the rural sector, so it is a vital part of our society and requires support. That could not be truer than when we discuss how to support our farmers in achieving a transition to a carbon-neutral economy.
The agricultural sector has the third biggest emissions of any sector, contributing 17 per cent of Scotland’s emissions. NFU Scotland has accepted that its performance on reducing emissions has been poor. It has also called on Governments to work with it by investing in resources and advice for food producers and land managers, and the Scottish Conservatives support such calls. With over 70 per cent of Scotland’s land mass under agricultural management, farmers and crofters are responsible for the stewardship of many aspects of our renowned environment, so it is important that the Scottish Government invests in them.
Unfortunately, however, our farmers still do not know their future or what payments and support they will receive. While the UK Government has outlined its plans in the Agriculture Bill, the Scottish Government has left farmers in the dark. Farmers face uncertainty in much of their industry. They are the ones who are experiencing the impact of climate change and they know more than most how important it is to reduce our emissions. The Scottish Government needs to do more to reduce the uncertainty in their lives. Therefore, I ask it to consider the impact that it is having on our farming community by not announcing its plans for a new agricultural policy for Scotland.
Does Alexander Burnett accept that the Scottish Government has tried to give as much stability and certainty as possible? The Cabinet Secretary for the Rural Economy, Fergus Ewing, has tried to outline our position. The premise for the on-going uncertainty is simply Brexit, which is leading to uncertainty for everyone, including the agriculture sector. We can move on from that once we have certainty on Brexit.
I see some Conservative members shaking their heads. If they have reached that level of denial, the Conservative Party has no hope whatsoever.
The best way of getting certainty would be to back the Prime Minister’s Brexit deal tonight. [Interruption.] It is hypocrisy for Scottish National Party members to advocate a position that is more likely to lead to there being no deal while, at the same time, demanding more money in the event that there is none.
If we do not support the industry now, we will continue to face problems with achieving a carbon-neutral economy, and any targets that are currently proposed are unlikely to be met if we do not engage with every single industry proactively.
NFU Scotland has outlined its vision for future agricultural support in its document “Steps to Change: A New Agricultural Policy For Scotland”. It includes giving farmers and crofters the time and tools to adapt and become more resilient by putting the agricultural perspective at the heart of all measures from design to implementation.
It is not only the agriculture, forestry and fishing industries that will need our support to aid the transition to a carbon-neutral economy in rural areas. Small and large businesses, schools, organisations and local residents will all need support in our rural communities, too. The prospect of decentralised energy and digital connectivity offers an opportunity for rural communities not only to survive but to thrive. We would like there to be further engagement with our rural communities to aid that transition, because we need to listen to and work with them. It is vital that we do not leave such communities behind, because rural areas will feel the impacts most and will have the biggest changes to make if we are to achieve a carbon-neutral economy.
At the top of its briefing, Friends of the Earth Scotland makes the important point that
“protecting workers’ livelihoods, creating new jobs, and delivering a fairer Scotland should be at the centre of the move to a low-carbon economy.”
Any policies that harm job creation would be detrimental to rural areas, which are doing their best to encourage people to live and work there.
All those issues need to be worked on in a collaborative effort, and progress can be achieved only by our cabinet secretaries working in tandem. A carbon-neutral economy is one that we must set out to achieve for future generations to come. So, again, I ask the Scottish Government to reach out and engage with all areas across Scotland and not to leave our rural communities behind.
I understand why members turn around to listen to members behind them, but they should not spend the entire speech with their back to the chair.
It was enthralling, Presiding Officer.
You might have found it enthralling, Mr Golden, but it was a discourtesy. It was not a discussion. I was not going to name you, Mr Golden, but now I will. Mr Golden had his back to the chair for the entire duration of that speech. I understand why, but it was a discourtesy to the Presiding Officer, and such behaviour should not continue. I put that down as a marker. [Interruption.] I could get cross. I am being very gentle today, but that could lapse.
I call Stewart Stevenson.15:27
Thank you, Presiding Officer. Let us hope that I say nothing to annoy you too much.
Exactly 10 years ago, I was at the 14th conference of the parties—COP 14—in Poznan, in Poland, and the present climate change minister has been to COP 24 in Katowice, also in Poland. Ten years ago, the core of what we were discussing was climate justice, and I had the privilege of meeting, for the first time, Mary Robinson, who is now of the Mary Robinson Foundation—Climate Justice, when she spoke at an event that was organised by the Scottish Government.
Ensuring a just transition has moved up the agenda as an important issue of which we need to take account in protecting people’s jobs, exploiting the skills and opportunities that come from the transition and supporting the people who will need to undertake it.
Why does the agenda matter? In my intervention on the cabinet secretary, I talked about the very welcome move of employment from coal to renewables in the United States. It is estimated that hurricane Florence—a single hurricane—whose ferocity was broadly attributed to climate change, cost $22 billion. Therefore, the cost of doing nothing on the agenda is enormous. Ten years ago, we were being told by the UK Committee on Climate Change that the costs of doing nothing were approximately 10 times as great as the costs of addressing the agenda. I have not heard an update on that ratio, but there is little doubt that it will have remained the same—if not increased—as the issue has become more important. That is why we are addressing the agenda.
The Scottish Government has been doing quite a lot to address the agenda. There has been a just transition of ScotRail drivers from diesel trains—which burn 75,000 litres of fuel a week between Edinburgh and Glasgow, via Falkirk High, according to my back-of-the-envelope calculation—to electric trains, which are now used on the line. There are slightly more of them, with many more seats—30,000 seats per day—and the power that they need comes from only 10 wind turbines. If we compare those two options, we see why, in economic and climate terms, we will be making the transition from an environment in which we rely on oil, particularly in transport.
Oil is important, and the industry in the north-east is important for my constituents. My constituency has the St Fergus gas plant, which brings a huge proportion of the UK’s gas ashore. East Anglia is the other main place for that, together with some places off Blackpool. The skills that have been developed among my constituents and in my constituency are transferable skills that can enable us to build a new renewables industry, but we have got to manage that—it will not happen simply by accident.
We also have the Acorn carbon capture and storage project, which is undergoing its early stages at St Fergus, although the project is not quite of the size that we previously looked forward to at the Peterhead gas station. That is an ideal place to have a carbon capture system because of its proximity to the pipelines that would take the carbonic acid away and into reservoirs offshore.
Will oil continue to matter to us? Yes, it will. We have not found a way of successfully replacing oil in any meaningful way as a feedstock for our chemical industries. That is a challenge. We can see some of the way forward, but we are certainly not ready to complete that transition. We are not yet in a position to say that oil does not matter to our economy or to the future of the human race, but we can certainly see the way forward in transport, and we should. Oil is too precious for us to be burning as much of it as we currently do in transport.
Turning to the just transition process, I very much welcome the debate and its focus on the just transition principles. I am broadly comfortable with the Labour amendment, although not quite as comfortable as the cabinet secretary is, because I am not at all clear that the establishment of a commission that was
“independent of government and accountable to the Parliament”
would make sense or work. Why do I say that? There is a place for outside bodies that fit into that category. An example is the Commissioner for Ethical Standards in Public Life in Scotland, who is our policeman. Quis custodiet ipsos custodes? Who will guard the guards? We need independence in that role. Similarly, the Boundary Commission for Scotland should be independent of politicians and should therefore not report by the normal ministerial lines.
However, I genuinely have concerns about having an independent commission in a policy area such as this. The Scottish Parliamentary Corporate Body would have to find the money from parliamentary funds to fund it every year. Also, the commission would have to have a line of accountability to the Parliament—and how would that work? We know that ministers can be hauled up at our behest to account for the areas that are their responsibilities, but the commission’s area would not be their responsibility if the commission was independent and reported directly to the Parliament. Can I be persuaded on the subject? I probably can but, so far, the argument has not advanced to the point that I have heard the arguments for that aspect of a just transition commission—which, in principle, I strongly support.
This is an excellent debate. Some ministers have shown us the way to do things. In 2008, the Welsh Minister for Environment, Sustainability and Housing, Jane Davidson, was able to travel by train from Cardiff to Poznan, in Poland. The journey took her two days each way. I regret that, as a minority Government minister in 2008, I had to fly. I hope that that will not happen in the future.15:34
Last month, hundreds of energy workers and employers came together at a breakfast briefing in Aberdeen to consider how Scotland’s existing energy industries can play their part in the future energy transition. Chris Stark, the chief executive of the UK Committee on Climate Change, set out the wider challenges. He stressed the importance of containing the increase in global temperatures to 1.5°C rather than 2°C. He showed where Scottish and British emissions fit into the wider global picture, and he laid down a challenge to the oil and gas industry, which is still by far the largest energy employer in Scotland, to get involved in planning and delivering the transition to a low-carbon future.
The answers were interesting—not least those from people who work in oil and gas. Will Webster, who is the energy policy manager at Oil & Gas UK, introduced the publication, “Energy Transition Outlook 2018: A global and regional forecast of the energy transition to 2050”, which is the industry’s first annual report on the implications of and opportunities from transition for existing energy companies. That publication, and the briefing to launch it, tell their own story. Oil and gas workers, like coal miners before them, are citizens of the world as well as being skilled workers in energy production. They know that change is coming, and they want to be partners in that change, not victims of it. That is surely what today’s debate is all about.
For example, oil and gas workers want their offshore safety training certification to be fully recognised in offshore renewables, and they want the expertise and experience that has been gained in production of hydrocarbons over the past 40 years to be put to good use. They want that, too, for the infrastructure, for sequestering carbon and storing it below the sea bed in the North Sea.
Workers in Aberdeen, sadly, know only too well the impact of unplanned change, and not just in the context of the recent oil downturn. Only yesterday, the Arjo Wiggins Fine Papers Ltd mill at Stoneywood was placed in administration, which puts at risk hundreds of jobs in the last paper mill in the north-east. If the Government has a responsibility to support jobs that are threatened by global market trends—as, I am sure, ministers accept it does, in the case of Stoneywood paper mill—it has all the more responsibility when it comes to jobs that are put at risk in the name of public policy. Many people who worked in Scotland’s coal and steel industries—and in shipbuilding, which Gillian Martin mentioned in the same context—remember only too well how their jobs were sacrificed in pursuit of Government policy objectives a generation ago. The impact is still with us.
The whole point of a just transition is that such devastation should not be repeated in the name of public policy, however laudable the policy objectives seem to be. That is why Chris Stark’s approach to our existing energy industries is the right one. Asking those industries what they can do to support the energy transition is far more constructive and far more likely to succeed than advocating an end to production of oil and gas from the North Sea without reference to what the energy mix of the 2020s and 2030s might look like.
It is nearly 20 years since UK demand for oil and gas overtook UK production. As Tavish Scott said, reducing that demand to below the level of production is likely to take at least as long. Of course we should support ambitious targets for renewable energy generation and renewable heat, for stimulating demand for alternative fuels across the economy, for improving energy efficiency and for reducing emissions, but we need to start by considering what we want to happen—not which jobs we want to abolish and which industries we want to close down. Surely, setting out how we can make progress without making redundancies is what a just transition commission is for.
Last week, when we debated ultra-low emission vehicles, I quoted motor industry experts who argue that 2018 might well turn out to have been the peak year for petrol and diesel consumption worldwide. That will not have happened because of a fall in demand for transport or a decision to decommission car plants: it will have happened because of action here and elsewhere to promote electric cars and vans and hydrogen buses and trains, so that future transport needs can be met from lower-carbon sources.
We should take the same approach to other markets for oil and gas. Electricity generation has made big strides in the right direction, and there is still more to do, but the decommissioning of Longannet came after 15 years of expanding wind power, not before it.
The next challenge is heat. Eighty per cent of British homes are heated by natural gas, but many homes in rural Scotland are off the gas grid and suffer from serious fuel poverty as a direct result. We cannot force households to give up affordable gas heating for much more expensive electric alternatives. Instead, we must promote lower-carbon alternatives, whether we are talking about biomass, air-source and ground-source heat pumps or hydrogen, which might be a way forward in that sector.
A just transition is not only about justice for those who work in the energy industries; it is also about protecting consumers. Energy policy must address climate change and security of supply; it must also ensure that future energy is affordable for all, which is no small task.
We must also protect jobs in the wider economy. I mentioned the paper industry, which is only one of the manufacturing industries in Scotland that currently produce high levels of CO2 through their production processes. Increased energy efficiency in industry is essential, but it is not enough. We must also seek to drive down emissions from the energy that will continue to be required.
That is why carbon capture and storage will be critical. I hope that the Scottish ministers will work with UK colleagues to ensure that the next attempt to develop CCS on this island is more successful than the attempts that have gone before.
For all those reasons, we need an approach to a just transition that is serious, long term and truly inclusive, as Claudia Beamish and others have said. I hope that Parliament can broadly agree today on how to achieve that.15:40
I welcome the opportunity to speak in the debate.
If we are to have a just transition to a carbon-neutral economy, we all need to be more honest in how we debate climate change and economic growth in Parliament and across the country. In the chamber and in the media, we talk repeatedly about economic growth—indeed, economic growth is one of the key measurements by which Governments are held to account—but the same voices that one day unequivocally demand accelerated growth often argue the following day with equal passion that we must reduce emissions at a pace that will kill off jobs.
The Scottish Government’s Climate Change (Emissions Reduction Targets) (Scotland) Bill is the toughest legislation of its kind in the world. It is tough, but not destructive. The two ambitions of economic growth and significant carbon reduction are not mutually exclusive, and they cannot be discussed in separate silos. That is why we need the just transition commission: it is absolutely in the spirit of the Paris climate agreement, which emphasises the importance of social inclusion and ensuring that no family and no community gets left behind in this historic process.
We can make the most of the economic opportunities that are offered by decarbonisation. A good illustration of how that is already working in practice can be read about in the briefing from Scottish Renewables. In my region, the global headquarters of Natural Power, which is a leading clean-energy consultant that employs 350 people, is situated in the small village of St John’s Town of Dalry in rural Galloway. That is one of many good-news stories that decarbonisation has brought across rural Scotland.
Although I welcome the jobs that are brought by renewables in the region that I represent, I note—as others have—that agriculture, and in particular livestock farming, is a foundation stone of the economy. That is not just about farmers themselves; dairy workers, local builders, fencers, seed suppliers, vehicle franchises and local shops all depend on a thriving farming sector. We all know that cattle farming has challenges to meet in respect of carbon reduction. The key is co-operation with the sector. That is why I am pleased to see that farming is represented on the just transition commission.
I also note that NFU Scotland’s briefing for us supports the Government’s approach in the Climate Change (Emissions Reduction Targets) (Scotland) Bill. As it says, a net zero approach would result in a reduction of output and a decline in the agriculture and food sector. I do not think that anybody wants that.
I know that there are climate campaigners who do not agree with that approach. They would like us to embark at breakneck speed on a journey that could devastate farming and food. That is unacceptable to my constituents in South Scotland, and I am pleased that it is also unacceptable to the Scottish Government. It should be unacceptable to everyone in Scotland who values jobs in our rural economy.
If South Scotland is to prosper economically as a region, we also need to improve the roads that we drive on. Political parties across Parliament support upgrading the roads there—dualling of the A75, for example—as being essential to the economic prosperity of the south-west. I believe that the Government is listening to those arguments, but I am well aware that there are people who will always oppose any road upgrades on the ground that they risk increasing emissions. I am not one of those people, although I acknowledge that their position is consistent. I find those who demand impossible emissions reductions and new roads with equal fervour harder to accept. A just transition will find a pace of change that allows road infrastructure improvements in rural Scotland where they are needed.
However, this is not just about one sector versus another: social justice is also about income levels and opportunities. In parts of Dumfries and Galloway for example, it is often impossible for people to get to work, see a doctor or do the shopping without a car. At the Scottish Rural Action event in Parliament last week, it was noted that traditional statistical measurements of poverty in rural areas often underestimate poverty because they assume that car ownership is a sign of prosperity when, in fact, it is a necessity. Any move to decarbonisation must acknowledge that rural car use is a need, not a choice.
Although I welcome the Government’s electric vehicles initiative, it will be some time before they are affordable to most of my constituents, whose wages are significantly lower than the Scottish average. I say that, of course, with the proviso that the Scottish Government is not responsible for the price of motor fuel or the duty that is levied on fuel by the UK Government.
Similarly, people in rural areas such as the south of Scotland have challenges heating their homes. Many are dependent on heating oil because there is no gas, and the price of electricity is prohibitive. Indeed, last year, the average annual domestic standard electricity bill in Scotland increased by £43 to £606, while the price of gas fell. That certainly does not make environmental sense. Again, I accept that the Scottish Government does not regulate the energy companies and so has no control over bills. However, it is important to put just transition in the context of fuel poverty, which is higher in Dumfries and Galloway than it is in most other parts of Scotland, so I welcome the presence of experts on fuel poverty on the just transition commission.
Social justice is at the heart of the debate. We are reducing our carbon emissions in order to help communities and individuals thousands of miles away whose livelihoods and homes—and often their lives—are threatened by rising sea levels and dreadful droughts. We have an obligation to them, so our ambitious reduction targets should be welcomed by all.
We also have an obligation to people who are living in poverty in this country—or to those who could be plunged into poverty if their jobs were to be lost as a result of policies that do not consider a just transition. That is why I support a just transition.15:47
I refer members to my entry in the register of members’ interests, specifically with regard to residential housing, renewable energy and farming.
I welcome the opportunity to contribute to what has generally been a consensual debate. This is an important debate, particularly as we look forward to the Environment, Climate Change and Land Reform Committee’s stage 1 report on the Climate Change (Emissions Reduction Targets) (Scotland) Bill. The bill will help to shape and define our approach to making Scotland greener and more environmentally sustainable.
There is, of course, a much wider importance to this debate, because the actions that this Parliament and Government take will contribute to a global effort to reduce carbon output. We must all be mindful of last year’s IPCC special report—“Global Warming of 1.5°C”, or the SR15 report—which noted that, if global carbon emissions continue on their current trend, we may reach global warming of 1.5°C above pre-industrial levels between 2030 and 2052. Although almost everyone would be impacted by such a global temperature rise, it would more than likely have a greater impact on some of the poorest parts of the world, so there is clearly a lot at stake.
With all that said, where we seek to reduce carbon emissions, whether that be in the housing sector or in transport, we must ensure that we allow businesses and other organisations the time to adapt, and that the Government provides proper support to allow the changes to occur. As my colleague Maurice Golden noted earlier, transforming our economy in order to meet those changes comes with risk, and we should seek where possible to work at a UK and Scotland level to help our country meet the challenges.
I will address two areas: the agricultural economy and housing. Others have spoken about the agricultural economy. The agricultural sector would face a significant burden should such changes be rushed through with little or no consultation and without co-operation. Joan McAlpine was right to speak about the need for co-operation in the sector, because it truly requires a just transition.
Our agricultural sector is vital to Scotland’s economy. We know from recent debates in this chamber that it supports thousands of jobs, manages much of our natural environment and maintains the existence of rural communities across the country. Farmers, crofters and land managers across Scotland have already made a contribution to reducing carbon output and helping our natural environment. From planting hedgerows and trees to investing in more fuel-efficient machinery, it is clear that the sector realises the need to adapt and—more important—is willing to adapt.
I was struck by Tavish Scott’s comment, which was absolutely right, that smaller farms and crofts will find it much harder to transition and reduce emissions than larger farms and agribusinesses will. That should be recognised as we redesign agricultural support.
The NFUS has recognised that
“90% target will be very challenging for the farming industry”.
It has acknowledged the need for a strong focus
“on environmental benefit and delivery as a central plank of ... a new Scottish agricultural policy”.
The agricultural sector recognises not only that making such changes will benefit the environment but that it could be more cost effective for farms and drive up production rates. I think that we all recognise that this sector in particular needs time to adapt and change.
I will touch on housing and fuel efficiency. Housing is another sector that must adapt if we are to achieve a greater transition towards a low-carbon economy. Buildings remain one of the largest contributors to emissions in Scotland, and we must look at ways of improving home energy efficiency, building more sustainable housing and incentivising property owners to make changes that will save them money and address the climate change challenge that the world faces. As the Government’s figures show, 19.7 per cent of total greenhouse gas emissions in Scotland originate from buildings, so there is a lot of work to do.
I recently had a particularly interesting meeting in the Highlands about the German Passivhaus model, which creates homes that provide a
“high level of occupant comfort while using very little energy for heating and cooling.”
In short, that means building better and warmer homes.
Outwith my region, one example of such a project that has been successfully executed comes from the Dormont estate near Lockerbie, where eight two-bedroom and three-bedroom semi-detached properties were built to the Passivhaus standard. A two-year study of those properties’ energy performance showed not only that their energy bills were substantially lower than the UK average and that total energy consumption per annum for a Passivhaus building is just 10 per cent of the total UK average. Passivhaus is a type of housing that consumes less energy and creates a saving for the consumers who live in it. That is a prime example of how making our homes more energy efficient can help to reduce carbon output, which is beneficial not only for our natural environment but for our society.
To adapt our homes in order to conserve heat and save energy will inevitably help the most vulnerable people in our society. The cross-party group on health inequalities, which I co-convene, took evidence last year from the Energy Agency, which looked at the effects of the home energy efficiency programmes for Scotland on 300 properties that were described as hard to treat. It found that, after insulation was fitted, 93 per cent of residents felt that the overall condition of their home had been improved.
It is clear that we must take action to contribute to the global effort to reduce carbon output and create the conditions for businesses and industry to transition justly to a low-carbon economy. We must be effective in our approach and mindful of the challenges that lie ahead. Above all, we must take an evidence-based approach, and the Government must play its role in supporting our industries to take the steps that are required to achieve a positive outcome.15:53
It is fair to say that the IPCC’s 1.5°C special report, which was published last October, was a wake-up call for all of us—and if it was not, it should have been. The report brought significant clarity to the scientific evidence on the impacts of global warming, including a valuable summary of the evidence of the impacts at 1.5°C.
The report, along with two other reports that were published last year—the UN’s “Emissions Gap Report 2018”, which was published shortly before COP24 in Poland, and the Met Office’s UK climate projections 2018—helped to provide clarity on the Scottish, UK and global position that the world has already reached about 1°C of post-industrial warming; that we are on course for an alarming 3°C of warming; and that extreme weather events that are happening now can be attributed with confidence to warming on that scale. Given those facts, NGOs continue to claim that current national pledges are insufficient to keep temperature increases to the Paris goal of 1.5°C.
I have a lot of sympathy with the calls to set a zero emissions target in the Climate Change (Emissions Reduction Targets) (Scotland) Bill, but we must be realistic about the target dates that we set. That said, we all await with interest the views and advice of the UK Committee on Climate Change in the spring. The CCC will, I hope, set out a pathway for the nation to achieve carbon neutrality.
As we know, Scotland’s climate change plan has a headline target of achieving a 100 per cent reduction in carbon emissions as soon as possible. However, at this moment in time, the CCC advises that a 90 per cent reduction target for all greenhouse gases by 2050 is still the limit of feasibility.
That said, I was pleased to hear the cabinet secretary state in the chamber last November that if the CCC
“advises that even more ambitious Scottish targets are now credible, we will adopt them.”—[Official Report, 1 November 2018; c 47.]
It is clear that the Scottish Government wants to achieve net zero, but it must be done in a credible and socially responsible way. That is where the assistance of the just transition commission will come in. It will provide practical advice on promoting a fair, inclusive jobs market as we move to a carbon-neutral economy.
Before I turn to the just transition commission, it may be worth reminding the chamber that Scotland achieved a 49 per cent reduction in greenhouse gas emissions against a 1990 baseline and that we recorded a 10.3 per cent year-on-year reduction in carbon emissions between 2015 and 2016. Of course, our country’s carbon footprint will also be reduced thanks to the six large-scale renewable energy projects that have been approved, not to mention the world’s first floating wind farm, and the country’s largest solar farm, which has been given the green light. Many people working on those projects have transitioned from the oil and gas industry.
We have spoken in the past about picking the low-hanging fruit when it comes to reducing the carbon footprint. However, one box that has not been ticked and which is, I believe, a piece of low-hanging fruit that we have missed, is tackling the 14,000 Scottish homes that still use coal as their primary heat source, as well as the 186,000 domestic properties that rely on oil or bottled gas. Scottish Renewables estimates that homes using coal emit, on average, more than four times as much carbon as those using electric heat pumps, biomass boilers or solar thermal panels.
Clearly, with the closure of Longannet, coal-powered electricity generation has already, thankfully, become a thing of the past in Scotland, but I believe that it is time that household coal heating was consigned to the dustbin of history, too. The short-term employment opportunities that such a commitment would create are high and would help to ensure that workers successfully transition as the employment landscape shifts.
We all want cleaner air, a healthier environment and less of the harmful emissions that cause climate change. Getting rid of coal as a household fuel will be a small but significant part of that. That issue was raised by Swedish academic Anders Wijkman when he gave evidence to our Environment, Climate Change and Land Reform Committee before the Christmas recess. He said that there is a need for a Europe-wide discussion about support for communities that are reliant on the coal industry.
The just transition commission will be invaluable in the coming years as a more resource-efficient and sustainable economic model is introduced in what must be a fair and socially just way. We must be keenly aware of the potentially disproportionate impact that a badly managed transition could have on, for example, rural areas and on those working in the agricultural industry.
Clearly, food and farming have a crucial contribution to make in mitigating and starting to adapt to climate change, but let us not forget that the entire agricultural industry is made up of thousands of small and medium-sized enterprises.
It is fair to say that farmers get that they have to play their part, but first-class support and planning for transition in the agricultural industry is imperative. I would like to see a return to the old-fashioned Government agriculture advisers, who had a good rapport with the local farmers on their patch and gave them the advice that they required free of charge. I know that the free-of-charge element is a big ask, but I think that such a service will be crucial if we are to ensure that the agricultural industry is 100 per cent on board, because the policy decisions that could be made to secure reductions in emissions from agriculture will potentially have a major impact on the industry.
Ensuring that funding of the farming for a better climate initiative is significantly increased from the current very low £375,000 per annum, which Tavish Scott has already mentioned, will go some way towards helping to support change in the industry.
I have nearly run out of time—
If you have something pressing to say, Mr MacDonald, I can give you the time.
The NFUS provided us with an excellent briefing in advance of today’s debate. There are clear concerns that if a net zero emissions target were set, the sequestration that would be possible through various activities that can be undertaken on land, such as tree planting, peatland restoration and investment in renewables, is not likely to be sufficient to reach net zero.
Is the next step a reduction in output, which translates to a declining agricultural and food sector? In my view, it will be critical that any pathway to reduce emissions allows for maintaining Scotland’s farming industry output. That said, as I mentioned earlier, better progress can be made if our Government works with the industry to invest in resources and advice for food producers and land managers.
Do I have more time?
Not too much longer, please.
I will touch on the issue of carbon capture and storage. If we are to set a target of net zero in the future, we must consider the impact on jobs in all high CO2 emitting industries in Scotland, not least the plants in Grangemouth in my constituency. The Scottish Government must do all that it can to support the development of CO2 transport and storage infrastructure in Scotland, to enable industries to greatly reduce their emissions. I know that much has been done, and I welcome the UK Government’s recent volte-face with regard to support for CCS. It clearly recognises that CCS enables industry to produce and retain jobs that would otherwise be lost if production was transferred overseas or shut down altogether, which is a risk that we must always keep in mind and is something else for the just transition commission to consider.16:01
I refer members to my entry in the register of members’ interests, particularly in relation to the farming business of J Halcro-Johnston & Sons.
The debate is an opportunity to look ahead to a future that will, I hope, be quite different. One of the defining challenges of this generation has been not just tackling climate change but finding a way for our society to live more harmoniously with our natural environment. The priorities that climate change drives forward remind us that our relationship with the wider environment is fragile. Scotland—particularly my region, the Highlands and Islands—has a long relationship with environmental management, particularly in the production of environmentally friendly energy. Although Scots were drivers of the industrial revolution, we are also a country that made significant inroads in developing and expanding hydroelectric power throughout the 20th century. We have harnessed wind energy on a significant scale, and we are home to innovative developments in areas such as wave and tidal power generation. For example, in Orkney, the European Marine Energy Centre—EMEC—is a global centre of marine energy research excellence. Organisations such as EMEC need our support, and we can make a major contribution by working with industry more effectively to ensure that a pipeline is in place to provide the skills that the sector needs. I will touch on that later.
For all our advantages, we know all too well that decarbonisation has been driven intensively in certain sectors with little progress having been made in others. In September, in its progress report “Reducing emissions in Scotland—2018 Progress Report to Parliament”, the Committee on Climate Change made it clear that there were
“no significant emission reductions in most sectors outside electricity generation and waste over the five years to 2016”.
That statement should cause us all considerable concern. As the Economy, Jobs and Fair Work Committee heard during its inquiry into the climate change plan, we need clarity from the Scottish Government on the policies that will help us to meet our targets. There are two obvious areas in which significant progress will have to be made if we are to come close to meeting those targets: transport and buildings. The CCC identifies transport as “Scotland’s biggest sectoral challenge”. Scotland has lagged behind the rest of the UK in the uptake of electric vehicles. As the committee observes, we need far more concrete planning for significant progress to be made.
As Donald Cameron mentioned, there has been work on energy efficiency in housing but there is still far greater scope for future proofing new-build homes. Work to develop sectors that are carbon conscious will depend both on direction from Government and on their own capacity and skills base. For example, as Alexander Burnett highlighted, the agriculture sector is aware of the need for change. Although the direction of travel is clear, bodies such as NFU Scotland have recognised the particular challenges that the sector faces. As they observe, Scottish agriculture contains a complex network of thousands of SMEs, which are run on a range of very different models. Where considerable change will be required, even in the future, it seems obvious to me that Government engagement should be given priority if we are to equip sectors best to adapt.
It is undoubtedly also true that a lower-carbon future will touch a great many parts of the Scottish economy—some, it seems, more than others. Those changes in our economy will have costs, but they will also create opportunities. The greatest risk is that we absorb all the costs while seeing few of the benefits.
Scotland can be a world leader in decarbonisation, and we have made significant progress towards that end. Business in Scotland can benefit globally from the skills that we create and foster locally. The reality, however, is that many of the jobs that were promised in low-carbon technology have simply not materialised. Opportunities have been lost as contracts here in Scotland have been fulfilled with the skills and facilities in other places. If we have the natural potential to be a global centre for decarbonisation, we must ask ourselves why those skilled jobs have not come to fruition.
The costs of decarbonisation are very real, and many will fall on Scotland’s SMEs, which have highlighted, for example, the impact of low-emission zones on their businesses. The level of collaboration between the public sector and SMEs on decarbonisation is clearly below what it could be, although it will often be those firms that will bear a great deal of the burden of change.
A joint statement by the just transition partnership, which includes not only environmental organisations but a number of trade unions and STUC involvement, cautions:
“It is necessary to confront the danger of losing a large part of the industrial base as employment in traditional sectors declines.”
That is a very real issue and one that is worth highlighting. If we are to see fast change in our economy and wish to cushion some of the negative effects of that change on people, that change must surely be based on a firm offer of retraining and reskilling. At the risk of repeating myself in the chamber, I point out that we lack a truly lifelong approach to learning. In December, the draft budget promised the establishment of a national retraining partnership. That is, at the very least, an indication that the Scottish Government recognises some of the challenges. Although reforming adult learning significantly will take a considerable political commitment, it will also make our labour market more resilient not just in the face of the challenges of climate change but more widely.
Although I appreciate that environmental considerations will motivate wider economic change, we are speaking today about a just transition. In doing so, we must recognise that many of the areas that will have to contribute to climate change targets—in particular, our rural economy and our small businesses—are often already struggling. Costs will fall heavily on them, yet they remain an important thread that ties communities across Scotland together. If the Scottish Government and this Parliament are to be ambitious about reducing carbon emissions, they should recognise the future challenges that change will present when new sectors have to play catch-up in decarbonisation.16:07
I welcome the debate and the opportunity that it presents to reiterate this Parliament’s support for achieving a carbon-neutral economy in Scotland. As people never tire of hearing, I represent an island constituency that simultaneously contains some of the most environmentally sensitive land in the country and some of the greatest potential for renewable energy from the wind and the waves. I therefore recognise the responsibility that we all have to get the transition to new energy sources right. The motion rightly focuses on a kind of environmental justice, as have a number of members.
As a country, we have already embarked upon the transition to a carbon-neutral economy. Clearly, huge challenges remain in getting there, but it is worth reflecting that Scottish carbon emissions have almost halved since 1990, with 49,000 jobs now supported by our low-carbon sector. It is also worth mentioning, in all due national modesty, some of the things that Scotland does to reach its targets that not all countries can lay claim to doing. The Scottish Government has, for instance, further strengthened our commitment to achieving our carbon targets through domestic effort rather than via the alternative of paying other countries to make emissions reductions on our behalf. Under our own legislation, Scotland will also maintain a fair share of all international aviation and shipping emissions in our targets. No other country does that.
Emissions from land use and forestry will continue to count towards our targets—that is not the case everywhere else. Laurent Fabius, the architect of the Paris agreement, has described Scotland’s bill as
“a concrete application of the Paris Agreement.”
In addition, renewable and low-carbon energy will provide the foundation of our future energy system, offering Scotland a huge opportunity for economic and industrial growth. Scotland aims to generate 50 per cent of the energy that it consumes from renewable sources by 2030, and we aim to have decarbonised our energy system almost completely by 2050.
The Scottish Government is supporting low-carbon energy by establishing the energy investment fund, which will invest £20 million in low-carbon energy infrastructure. That will promote the development of onshore wind in Scotland and across the UK, and it will help to support the marine energy sector. The Scottish Government will also make it easier to invest in local and small-scale renewables, which are important to communities like mine, and will develop a bioenergy action plan as well as investing a further £60 million in low-carbon infrastructure.
The Scottish Government—and, I hope, Scotland’s more general political consensus—clearly now wants to ensure that we benefit fully from leading the global transition to low carbon. Therefore, the decision to appoint Professor Jim Skea to chair the commission on how the transition to carbon neutrality can help Scotland to become not just greener but more prosperous is very welcome. That move demonstrates—as if it needed to be demonstrated—the inseparability of environmental and economic progress for Scotland. Indeed, the Paris climate agreement recognises that a just transition means moving to a low-carbon economy in a way that leaves nobody behind, the public and private sectors working together to consider ethical and sustainable supply chains.
I hope that other direct economic benefits for the islands will soon arise from Scotland’s carbon agenda, for my constituency and for other places, too. I hope, for example, that we will soon hear further news on the future of the Arnish construction yard in Lewis from its new owners, who have committed such attention to ensuring that new work comes its way. The yard is extremely well placed to carry out fabrication work for Scotland’s offshore renewables industry, among other things.
The potential for that work to provide apprenticeships would be transformational in retaining young people in rural economies such as that of my constituency. The Comhairle nan Eilean Siar 60 foundation apprenticeships, which were announced recently in conjunction with Skills Development Scotland, are a good example of a partnership between national and local government that seeks to achieve just that in our island communities. Although there is still much potential in the North Sea oil industry, as members have said, there is also potential for skills to be transferred from the oil sector into offshore renewables, providing both direct and supply chain jobs.
Although living in a windy place, as I do, means experiencing an obvious energy source, that very climate is one of the reasons for a major local problem: fuel poverty. Recent figures show that fuel poverty in the Western Isles stands at 56 per cent compared with a national average of 31 per cent. Other island communities face similarly stark figures, although much is now being done to address the problem by providing insulation, particularly in older houses. Renewables are also helping to drive socioeconomic benefits and community development, but that progress is hampered by infrastructure constraints, which makes an interconnector that enables island renewables to be exported even more important in the longer term.
I applaud the work of many organisations—not least the University of the Highlands and Islands, in my constituency—to ensure that technologies such as domestic combined heat and power, hydrogen ferries and better insulation are at the top of our agenda. We should now make sure that energy and climate change policy are island proofed and that the potential of our island areas to make a national contribution to a carbon-neutral Scotland is fully recognised.16:14
I am very pleased to have the chance to contribute to today’s important debate on securing a just transition to a carbon-neutral economy. Some people have mentioned debates happening elsewhere today; those debates may be important, but what could be more important than planning for the future of our planet and the livelihoods of members of our society?
I start by recognising the efforts of the Parliament and the Scottish Government—including Stewart Stevenson, who took a very prominent role in the passage of the relevant legislation through the Parliament—in pushing the agenda forward and ensuring that Scotland is, as we have heard, a leading player in delivering progress.
We must talk about the carbon-neutral ambition because it is so important to the future of the planet, but we must also talk about a just transition, because that is so important to the people in our economy. There is much more work to be done on climate change. The debate is a chance to take stock of the progress that we have made so far and the need to continually refocus on the job that is still required to be done.
It is important to recognise that we have come a substantial distance along the path of delivering a truly carbon-neutral economy. As Maurice Golden pointed out, carbon emissions have almost halved since 1990, dropping from 76 million tonnes to 39 million tonnes, which is a reduction of 49 per cent. Those efforts must continue.
We must also take advantage of our world-leading position to maximise the potential for cutting-edge jobs and exportable technology and skills so that our companies and innovators see that Scotland’s economy is feeling the real benefits of that. Gillian Martin made the important point that that is not down to Governments and public agencies alone, but must be the responsibility of the companies themselves—the private sector should be driving much of that. There are many Scottish companies that are at the leading edge of developing the technology that we need to further drive the reduction in carbon emissions in order to achieve the ambitious targets that we have set for our nation.
Despite that, Government support is very important. Over the years, I have been troubled by the actions of the UK Government. First, in relation to carbon capture, it was in and then it was out, which caused huge frustration in the industry about missing many vital opportunities—not least the opportunity to become world leading. Secondly, the inconsistent and ever-changing support framework for renewables has been very damaging to the renewables sector, as many people in the Conservative Party have said.
The transition to new technology, such as the transformation involved in tackling carbon emissions as part of our strategy to meet the challenge of climate change, inevitably means that some ways of working and some jobs will be threatened. Therefore, it is absolutely vital that, as we move in that direction, we do so in a way that means that the transition recognises the essential need to see a similar transition in the employment market, so that there are skilled jobs to replace those that no longer support our low carbon emission ambitions.
I am pleased that the Scottish Government has put jobs at the heart of its strategy—as shown in the actions described by the Cabinet Secretary for Environment, Climate Change and Land Reform. As the cabinet secretary said in June:
“the low-carbon transition involves—and will continue to involve—very real impacts on people, jobs and local economies. There will be many co-benefits, but there will also be genuine challenges. That is why we need to take a balanced approach to meeting our climate, social and economic priorities.”—[Official Report, 12 June 2018; c 12.]
The Scottish Government is taking a very far-sighted approach and I fully endorse that. The approach recognises the direction that we must move in to meet environmental objectives at the same time as ensuring that the impact on the jobs involved is fully taken into account. The new technology creates new job opportunities that can be positive, just as the transition to a low-carbon economy is positive.
It is not just about technology. As we have heard in the debate, there can be other innovations: Tavish Scott suggested that MSPs could be paid according to their carbon output. That may well change the pay differentials in the Scottish Parliament between front and back benchers, and even the Presiding Officers—that would certainly be a just transition in my book.
I welcome the work of the just transition partnership in seeking to achieve the outcomes that I have just mentioned. I was at one of the first meetings of the just transition partnership, so I also recognise the work that has been done by Friends of the Earth Scotland and the Scottish Trades Union Congress, and the very positive and pragmatic approach that the trade unions and environmental members of the group have taken, which was very refreshing. Like me, they recognise the need for effective carbon reduction measures to be developed and implemented—we have willing partners in the just transition process—as well as the imperative to put at the heart of the strategy the members of Scotland’s skilled workforce who are in jobs that will be affected.
The partnership highlights the need to put jobs at the centre of strategic thinking across Government departments and in strategic planning for public infrastructure projects. Mark Ruskell mentioned the Scottish national investment bank; he is right to say that it could have a crucial role to play.
I know that that thinking is mirrored within the Scottish Government, and that the aspiration of the partnership on behalf of its member organisations to have a key role in helping to deliver a low-carbon transition is, and will continue to be, welcomed by the Scottish Government. For example, it is a key principle of the Scottish Government that no one gets left behind as the employment landscape shifts. I imagine that all members would be keen to support that.
The Scottish Government’s just transition commission will take that work forward and bring together stakeholders to develop a cohesive strategy to deliver on our shared objectives to bring down carbon emissions while ensuring that the change that is required is achieved in a way that protects jobs and communities. As one or two members have said, we should not underestimate how difficult that is to do. Creating well-paid and meaningful work is not easy and it cannot be done just by the private sector or by the public sector; it should be done jointly.
I also welcome another of the Scottish Government’s approaches that will undoubtedly deliver results on this agenda. It is important to encourage responsible business practices that consider ethical and sustainable supply chains. That is exactly the right approach. In that regard, the Scottish Government must and does lead. It encourages the changes in behaviour in companies, the public sector and the third sector that, in and of themselves, are small but which, when added together, can make a tangible and significant contribution to carbon reduction efforts.
Getting this right can help to save the planet, as we must, and can make sure that, as we do that, everyone is treated fairly and has equal opportunities to benefit from the economic potential in changing the way in which we do our business.16:21
This has been an interesting and wide-ranging debate. It is important that we reflect on the fact that we are talking about people who are affected by climate change around the world and whose communities will face devastating change. People in Scotland are also undergoing transition.
Gillian Martin made a moving speech about the personal transition that her family made in the 1970s from shipbuilding to working in the oil and gas sector, which she powerfully described as throwing her family a lifeline. I speak to people in communities that I represent in Fife, such as the workers at BiFab, and many people in those communities are looking for a lifeline today. They are looking for economic opportunities that are not just about oil and gas. They recognise that much of their income still comes from oil and gas but they also see a bright future through offshore wind infrastructure and marine energy, which can provide the jobs of the future. They can see that the order books of companies such as BiFab will fill up in the future, if we can get the right incentives for that sector to grow.
Part of this is about planning, and Maurice Golden talked about the importance of up-front planning. For example, the coal-fired power station at Longannet closed early—I do not think that anybody totally understood when it was going to close—which led to 350 jobs being lost pretty much overnight. People were reallocated within Scottish Power and around Scotland, but they lost their connection to Longannet and those jobs. Much of the work of the Longannet task force was done after, not before, the decision was made. That work was not about planning for the transition of those jobs; it was about mopping up the effects of the decision.
A couple of years on from that, we can now see a transition in west Fife. The Spanish electric train manufacturing company Talgo—a fantastic company—has recently met senior executives in the UK and has a fantastic vision for local communities. As an investor, it could bring 1,000 jobs into west Fife—almost three times the number of jobs that Longannet supported. That investment could combine with other low-carbon industries in that part of the Forth valley. Alexander Dennis Ltd, just over the Kincardine bridge, is leading the world in the development of electric bus technology. I am really excited about reindustrialisation, particularly in communities that have been blighted over the years.
I turn briefly to the just transition commission, which has been an important part of the debate, as Claudia Beamish, Stewart Stevenson and others said. Jim Skea’s appointment as the commission’s chair is welcome and will give us much confidence that the commission will be driven by the science and the imperative for us to achieve net zero emissions and tackle climate change.
Claudia Beamish is right that the Scottish Land Commission provides a model for how the voluntary just transition commission could, over time, become statutory. I do not agree with the Cabinet Secretary for Environment, Climate Change and Land Reform that the commission needs to stop its work overnight. We can move its work on to a more statutory basis. The cabinet secretary told us that recommendations are coming in 2021 and that there may be other ways to deliver the long-term work of that commission. I would like to know what those ways are now, because the Climate Change (Emissions Reduction Targets) (Scotland) Bill is going through the Parliament at the moment and members are just starting to get their heads around what the options might be for an independent body. If there is sense in having a statutory commission that is somewhat independent from Government, we need to figure that out soon, because we are coming to the point at which the bill could be amended at stage 2 in that regard.
Will the member take an intervention?
Go on, then.
I hope that the member can help us to understand why the body needs to be independent of Government, because that is my key area of concern—although I could be convinced.
That is to be considered further. We have an independent UKCCC as well, and we would need to look at exactly how an independent statutory body could emerge. I hope that we can have those discussions ahead of stage 2. If there is a need for a framework to be presented in the bill, we can do that, and we can do it with a good evidence base.
Joan McAlpine and many other members talked about the JTC’s membership needing to reflect all areas of concern. That is important. If we are to have a meaningful discussion with those who have a vested interest in the future of sectors—and with those who do not—we need to have that meaningful discussion. What is the technological pathway? What are the issues to do with transition of workers? What are the issues to do with training? How do we effect that discussion? What is the role of Government? It is important that those sectors sit at the table. The inclusion of fuel poverty experts is an important addition to the JTC.
There has been a lot of focus on agriculture. I guess that this is part two of the debate that we had last Thursday, with Tavish Scott, Donald Cameron and Joan McAlpine again raising our particular challenges with agriculture. Of course agriculture will be an important part of the transition. There are challenges, particularly with small farms and crofts that do not have the ability to look at new, innovative ways of changing practices, because there are not enough people to support such change.
I like Angus MacDonald’s idea of bringing back the agricultural advisers. However, we have investment in agricultural extension from the Scottish Government—we have a programme that could be targeted more at mainstreaming climate change advice, rather than just having discretionary funds that can be applied for through pillar 2 funding.
I do not agree with the NFUS. There will be challenges, particularly with livestock, but if we can include carbon sequestration in the mix and get a more sensible way of measuring the carbon emissions—the total greenhouse gas emissions—from the agricultural inventory, we can get to a pathway for net zero carbon farming. We would not be alone in that, as France and many other countries around the world see that pathway as well.
Economics is perhaps is one area on which we have been quiet this afternoon. Mr Mackay has had it quite lightly up until now. Perhaps he has been considering the implications of Shell’s executive carbon-linked pay policy on his own portfolio, should the Scottish Government adopt that policy. I am sure that he will be quids in after the next budget. Let us see. Stewart Stevenson reminded us of the massive economic implications, as laid out in the Stern report, which is now more than a decade old.
In his closing speech, I would like to hear from Mr Mackay about the hard economic levers that we need, such as the infrastructure commission and the Scottish national investment bank, and the need to embed climate change at every single level of Scottish Government policy—not just in the work of the Cabinet Secretary for Environment, Climate Change and Land Reform. The part that I am really interested in is those economic investment levers, because they will deliver a huge amount of change across Scotland’s economy.
I call Alex Rowley—around eight minutes, please.16:29
The debate has been positive in recognising that we must take action on climate change and, equally, that we must provide an alternative that protects the livelihoods of those who are dependent on jobs that extract fossil fuels or which depend on their use, and which protects the communities that have historically relied on the carbon-based economy for jobs. As has been said in the debate and as the just transition partnership has stated,
“A Just Transition means moving to a modern low carbon economy in a way which protects workers’ livelihoods, creates a new industrial base and delivers a fairer Scotland.”
Although consideration of the impacts of such a transition on our economy is welcome and important, we must acknowledge that it is not an easy thing to do. Our starting point must surely be to be honest about the progress that we are making. Moving to a carbon-neutral economy is not a small or simple task, but the consequences of doing nothing are unimaginable, and we would never be forgiven for that by the generations to come, who would have to pay the price of failure.
As Claudia Beamish reminded us, last year’s publication of the special report by the Intergovernmental Panel on Climate Change told us that 0.5°C warming would put hundreds of millions of people at risk of climate-related poverty, and that no country in the world would escape the consequences. We need action in every country to combat climate change, but sometimes that seems to be a tall order, because people as individuals think, “I can’t change the world.” However, as Pope Francis has said,
“We need a conversation which includes everyone, since the environmental challenge we are undergoing, and its human roots, concern and affect us all.”
“Obstructionist attitudes, even on the part of believers, can range from denial of the problem to indifference, nonchalant resignation or blind confidence in technical solutions. We require a new and universal solidarity.”
As part of that inclusiveness, we must engage with the very industries that we seek to change, which is why Labour is calling for the establishment of a statutory long-term just transition commission that has the necessary funding, is independent of Government and is representative of industry and the workforce in which change is most needed.
I again make the point that we must be honest about where we are. Recently, former energy minister Brian Wilson said:
“As the windiest country in Europe, we should be angry and embarrassed that every single turbine around us has been imported.”
He made a fair point. We cannot just talk about what a good idea a just transition is, as we have done today; we must take action to make it a reality. If we are honest with ourselves, we will see that the actions to date have been insufficient for building a new economy for the future. For example, last month’s announcement that a £160 million fabrication contract for the Moray east offshore wind farm has been awarded to a United Arab Emirates based firm raises many questions. The announcement led Gary Smith, GMB Scotland’s secretary, to state:
“What we cannot entertain is more of the same across Scotland’s renewables sector, where we have been fighting for the scraps from our own table—that’s certainly not a just transition towards a low carbon economy.”
I have to say that I struggle to see where the strategy is for the creation of skills, apprenticeships and jobs in the renewables sector. We need more focus from Government at Scotland and UK levels. Many jobs in the sector are high skilled and high waged, but we need intervention and an industrial strategy to make it happen. Brian Wilson reminds us that, in the 1970s, the Offshore Supplies Office was established with the objective of securing 70 per cent of the North Sea supply chain for UK companies. Hundreds of companies ended up providing thousands of jobs, as a result. When it comes to renewables, we need an action plan and direct intervention from the Government, and we need that to happen sooner rather than later.
Will the member take an intervention on that specific point?
I agree with Alex Rowley on the benefits that we should enjoy from the onshore supply chain. There are matters of commercial confidentiality, but in relation to Burntisland Fabrications Ltd it was specifically mentioned that the Government has intervened to provide the necessary support to ensure that there is work for the yards in Scotland. Does not Mr Rowley accept that as a very welcome intervention? The last time I met the trade unions, they welcomed it.
I was careful not to mention BiFab. I talked specifically about the contract that was awarded to another company last year. In the coming week I will meet the Minister for Energy, Connectivity and the Islands to discuss BiFab, and I very much welcome the action that the Scottish Government has taken on it so far.
However, the Government’s position highlights that we are not playing a part in constructing the majority of renewables equipment that is being installed in Scotland: the jobs are going elsewhere. Other Governments have intervened directly. As Brian Wilson said, we should learn lessons from the past, when there was clear intervention so that people in this country benefited from the jobs that came from oil and gas. We need to do the same now.
I turn to the farming sector, for which the same is true. The NFU Scotland acknowledges that the agriculture sector is criticised for its poor performance on reducing emissions. However, it believes that better progress can be made if Governments work with the industry to invest in resources and advice for food and land management. Again, we hear a request to work with the Government on a plan, and for the resources to deliver that plan. We need to take a forward-looking proactive approach to the economy, which means having an industrial strategy—a plan for the future that is clear and strong on actions.
Is not it incredible that, in 2019, over a quarter of households in Scotland suffer from fuel poverty? Rather than simply changing the definition of fuel poverty, and introducing a target to reduce it to 5 per cent by 2040, should not we be putting in place a plan and resources to make better progress now? Part of that approach would be a skills and training strategy that would give people the jobs that would come with that action.
We have a housing crisis in Scotland. Should not we have a national house-building strategy? We need to say that housing is a national strategic priority, and to build the houses that we need. Again, if that were to be part of a national strategy, we could ensure that skills and training opportunities were available in every community in Scotland so that jobs would be local jobs.
I conclude by saying that a just transition means investment in skills, training and jobs for local people. None of that is currently happening on the necessary scale.16:38
I start by referring to my entry in the register of interests, in relation to a smart-meter business that is based in England
This has been an important debate. It deals with one of the most pressing and critical challenges that face this generation and future ones: how to address climate change by transitioning to a carbon-neutral economy and society. As has been mentioned by a number of members, the backdrop to the debate are the challenges and goals that were set out in the Paris climate change agreement, which seeks to limit global temperature rises to well below 2°C and to pursue efforts to limit the increase to 1.5°C above pre-industrial levels.
Here in Scotland, we have seen significant progress over the past 30 years. Emissions have reduced by 49 per cent since 1990, and much progress has been made towards the goal of having a carbon-neutral economy. However, progress has varied considerably across sectors. Emissions cuts of 69 per cent from the energy sector and 73 per cent from waste contrast with lower reductions of only 28 per cent from agriculture, 21 per cent from the residential sector and just 3 per cent from transport.
In her opening speech, the cabinet secretary set out the steps that the Scottish Government is taking to deliver future reductions in emissions through the climate change plan, the just transition commission and other initiatives. The targets include our having a wholly decarbonised electricity system by 2030, a 96 per cent reduction in emissions from the services sector, and a 76 per cent reduction in residential emissions.
Those targets are ambitious and we can all support them, but significant challenges need to be addressed if we are to deliver the reductions, and do so in a way that is just and fair to all members of society. Some of those challenges have been raised during the debate. Jamie Halcro Johnston and other members highlighted the fact that the climate change plan needs to set out more detail on how the Scottish Government will deliver emissions reductions. That concern was raised during the committee inquiry into the climate change plan. The Existing Homes Alliance Scotland told the Economy, Jobs and Fair Work Committee:
“It is right to have such ambition, but it cannot be wishful thinking—it must be backed up by credible policies and resources to give us the confidence that the target will be met.”—[Official Report, Economy, Jobs and Fair Work Committee, 31 January 2017; c 3.]
The WWF agreed, and said:
“we are disappointed by the level of policy detail”
and called for a
“clear indication of the all the policies and proposals that will deliver the targets”—[Official Report, Economy, Jobs and Fair Work Committee, 31 January 2017; c 26.]
That evidence led the committee to recommend that additional details on budgets, targets, timelines and policies should be included in the climate change plan in order to deliver a just transition in a transparent manner. As we debate the Climate Change (Emissions Reduction Targets) (Scotland) Bill in the weeks and months to come, I look forward to the Government setting out the detail of how the targets will be delivered.
In addition to more clarity and detail on policy, a whole-of-Government approach needs to be taken to delivery of a carbon-neutral economy. The briefing from the Scottish carbon capture and storage group that was circulated yesterday called for a just transition to be part of an industrial strategy that identifies the industries that will emerge in a low-carbon economy, and the industries and sectors that will become less viable, as a result. It said that the strategy should take a co-ordinated approach in order to ensure that the jobs and skills from declining industries can be transferred to the new emerging sectors.
In his opening speech, Maurice Golden set out a number of constructive proposals on how the strategy could be delivered. He referred to an ambitious circular economy programme that would add more than 40,000 jobs if the Scottish Government were to embed such practice across all portfolio areas. That would include the creation of new institutions including a design academy, an institute of reuse, microplastic recycling facilities and waste hubs, in order to promote best practice across Scotland.
The Scottish Government talked about taking a co-ordinated and strategic approach. It can facilitate the delivery of a just transition by working closely with the UK Government under its industrial strategy, which includes clean growth as one of four grand challenges. The transition to a carbon-neutral economy will require investments of significant scale, and the UK’s industrial strategy will invest more than £2.5 billion in the next five years to support low-carbon innovation, including through transformation of construction techniques to improve efficiency, through making energy-intensive industries competitive and through making the UK the global leader for green finance to support clean growth.
The low-carbon economy in the UK is expected to grow by 11 per cent per annum in the next 10 years, which is faster than any other sector of the economy. Scotland can benefit significantly from the scale of the economic growth and investment under the UK’s industrial strategy, but only if the Scottish Government works more closely and collaborates further with the UK Government in order to capitalise on the opportunities.
A number of MSPs, including Claudia Beamish, Mark Ruskell and Donald Cameron, pointed to the need for increased investment in training, education and skills to ensure that Scotland’s workforce is ready for the challenges and opportunities that will arise from the low-carbon industries that are yet to emerge. If we are to equip Scotland’s workforce for a low-carbon future, we need to address the chronic underinvestment in training and lifelong retraining, which Jamie Halcro Johnston mentioned. Otherwise, the workforce of the future will not be prepared to capitalise on the opportunities: there is a danger that we will lose out on significant opportunities if our workforce is not ready. As Alex Rowley said, when we have previously not taken a strategic approach to new emerging industries, we have lost out in terms of jobs in manufacturing, with the vast majority of turbines in Scotland having been manufactured elsewhere.
In delivering a just transition, another priority for the Scottish Government will be to minimise economic disruption on the pathway towards a carbon-neutral economy. For example, the Federation of Small Businesses has warned that few Scottish firms are prepared for the new low-emissions schemes that are planned for four cities in Scotland, and it has expressed concerns about lack of consultation and consistency in implementation of the schemes. We agree with the FSB’s call for more consultation and for Scotland-wide standards to be established when the Scottish Government is introducing new regulations along the pathway to a low-carbon economy.
We also need a coherent approach across Scottish Government agencies, and not just in the just transition commission. We need Scottish Enterprise, the Scottish national investment bank and the Enterprise and Skills Strategic Board all to be aligned around the priorities and implementation of policy. Perhaps Derek Mackay, when he wraps up the debate, could explain how the Government agencies will work together and be aligned across the policy area.
Donald Cameron mentioned in his speech that this is an area in which the Scottish Government must follow an evidence-based approach in order to ensure that policies work in practice. Questions remain about the Scottish Government’s policy proposal to tackle energy costs through a publicly owned energy company, and about how and whether it will work in practice. Two years after the policy was announced, the viability of the publicly owned energy company is still open to question, as we heard from the Minister for Energy, Connectivity and the Islands at the Economy, Energy and Fair Work Committee just this morning. I was surprised to hear that we are still at the stage of stress testing the viability of that flagship policy, which the First Minister announced two years ago.
As Scotland moves towards a low-carbon future, it is inevitable that our economy will change significantly. Some industries will experience rising costs, others will experience falling demand and new sectors will emerge that do not exist at present. There will be a need to balance the needs of small businesses, unions, employees, large businesses, the fossil fuel sector, the renewables sector and new emerging sectors. To deal with all those challenges, we need the Scottish Government to adopt a whole-of-Government approach.
Above all, the Scottish Government needs to take steps to train and upskill our current and future workforce to be ready for the challenges and opportunities that lie ahead.
I support the amendment in Maurice Golden’s name.
I call Derek Mackay to close the debate. You have around 12 minutes, which will take us up to decision time, cabinet secretary.16:47
Thank you, Presiding Officer.
I am delighted to say that we have had a very consensual debate, which has been important nonetheless. We have heard throughout the debate that the principles that are inherent in the term “just transition” resonate across the chamber. I heard a number of comments about a “whole-of-Government approach”, and I think that they were right, but, in a sense, we are moving towards a whole-Parliament approach as well. If nothing else, there is agreement that this is important and that there is a lot of opportunity to work together to ensure that we get it right, and we share the ambitions for the just transition. I am sure that the Cabinet Secretary for Environment, Climate Change and Land Reform, Roseanna Cunningham, is particularly relieved that there is that level of engagement and consensus.
The principles align with our national performance framework, our desire to meet the sustainable development goals that underpin that, and the principles and outcomes within it. We have set out to create a more successful country that creates sustainable and inclusive growth, reduces inequalities and gives equal importance to economic, environmental and social progress, and those things go hand in hand. They are not exclusive to one another.
We heard many important comments about the targets for reducing greenhouse gas emissions. The consideration of the Climate Change (Emissions Reduction Targets) (Scotland) Bill is the place to debate those issues more fully, so I will not focus on them specifically this afternoon.
What I want to focus on, because many members asked about this, is my view as cabinet secretary for the economy. No member will be surprised to hear me say that I am focused on boosting Scotland’s economic performance. That is not because economic growth is an end in itself, but because it provides the jobs and investment that are needed to raise living standards, reduce inequality and support high-quality public services.
Jobs are so important. The most impactful, purposeful thing that Government can do is create quality jobs, which are so good for social inclusion and a better quality of life.
As the environment secretary said, Scotland has successfully combined reducing our greenhouse gas emissions with creating a growing and successful economy. We have record low unemployment levels, and exports, research and development and foreign direct investment all continue to grow.
We know that, globally, unmitigated climate change would cause extreme economic damage. That, as well as the environmental damage, is focusing minds. We also know that if Scotland is at the vanguard of a global move towards carbon neutrality we can reap economic benefits from the new markets and investment opportunities that are created.
I want to make it clear that industry will continue to flourish in Scotland as we decarbonise and that we are investing in skills for the future. I am sure that all members appreciate that, in these circumstances, there is an onus on not just Government but the private sector to adapt and take forward this agenda. I want Scotland to be a leader in technological and social innovations, so that we can harness innovation to boost productivity and create new employment opportunities.
Analysis by the International Finance Corporation indicates that the Paris agreement will help to open up $23 trillion-worth of opportunities for climate-smart investments in emerging markets between 2016 and 2030. There is huge economic potential.
Scotland is well placed to compete in that regard. We are already delivering policies that demonstrate our commitment to a just transition to carbon neutrality. In my role as economy secretary, I will highlight three live examples, which give a flavour of the action that we are taking.
First, it is important that we are committed to supporting investment in the low-carbon economy. The budget proposals continue such support. We have allocated £40 million to 16 low-carbon capital projects, through the low-carbon infrastructure transition programme, and we are providing support for renewable and local carbon infrastructure through our £20 million energy investment fund and £60 million low-carbon innovation fund. That funding is helping to develop the low-carbon innovators who will shape the future, and it ensures that we support local businesses, while attracting outside investment.
As members mentioned, in the coming months, building on that investment, I will introduce a bill to underpin the establishment and capitalisation of the Scottish national investment bank. Let me be clear. The bank will provide patient, mission-based finance, which will help to create and shape future markets and help Scotland to achieve its full economic potential. A transition to a carbon-neutral economy will be a central mission for the bank; the bank will have a role to play in Scotland’s transition to a carbon-neutral economy.
I have committed to providing £2 billion over 10 years to capitalise the bank initially. That will make a material difference to the supply of capital to the Scottish economy, by levering in additional private investment, supporting ambitious firms to flourish and enabling the transformational change that is needed to achieve carbon neutrality.
I thank the cabinet secretary for laying out the mission-orientated approach of the new investment bank. Will it not help that approach if the mission is clear: a net-zero carbon target for Scotland? Surely that will help investment and innovation.
I am trying to make it clear that we are focused on achieving carbon neutrality and that that will underpin the bank’s work. This is about technological and societal change, which makes innovation necessary. I very much support ensuring that the bank helps to achieve that.
A second, important example is what we are doing in relation to Michelin Tyre plc, in Dundee. We were faced with a challenge at that industrial manufacturing plant and, so that we can seize the opportunity and create jobs for the future, the intervention that we have made focuses on things like low-carbon transport, the circular economy and retraining and upskilling. That will, of course, be supported by Government resource and our partnership with Michelin specifically. A cross-sector approach with politicians, trade unions, the business and key stakeholders such as the local authority has been taking place. The Michelin-Scotland alliance wants to create an innovation park that will stimulate development in remanufacturing, recycling and low-carbon transport. That is a real, live example of how we are acting now to try to achieve those outcomes. That will support our low-carbon ambitions and economic development, and we will continue to do all that we can to support the workforce to ensure that it benefits from the opportunities that a number of members have raised in a very positive way.
My third example is the transition training fund. That demonstrates our commitment to ensuring that we provide the support that workers need to retrain and upskill when industry conditions change. We established the £12 million transition training fund in 2016. [Interruption.]
Excuse me, cabinet secretary. Can we have a bit of quiet, please? It is getting difficult to hear the cabinet secretary.
That fund is specifically to support workers in the oil and gas sector in the face of rapidly changing market conditions. We have supported more than 3,600 people through the fund, of whom 50 per cent have transitioned to work in new sectors and 92 per cent consider their job prospects to be improved.
We will continue to work with the oil and gas sector to address the transformation that is expected. Recent studies have shown that there are job opportunities for the future as well, but those jobs will be very different from those that exist today. New roles will be needed in areas such as data science, data analytics, robotics, material science, remote operations, nanotechnology and cybersecurity. Furthermore, to remain sustainable in a carbon-neutral world, the sector is positioning itself to support the development of carbon capture and storage—members have discussed that—and hydrogen projects. Transformation of that scale shows why a just transition approach is so important.
Oil and gas have featured quite heavily in the debate. We have shown how the North Sea is highly regulated and that it has some of the most advanced and comparatively least-polluting production methods in the world. That means that maintaining domestic oil and gas production can lead to lower net global emissions than increasing our reliance on imports would. A number of members have mentioned the importance of the sector.
I have given several examples from my perspective as the cabinet secretary with responsibility for the economy, including some of the interventions that we have made. However, there is a lot more work to do. That is why the just transition commission will be so helpful in giving us advice to take matters forward in a fashion that the Cabinet Secretary for Environment, Climate Change and Land Reform has outlined to achieve economic, environmental and social progress.
In defence of the Labour Party—I do not often say that—it is asking us to consider a statutory footing for the commission. That is worthy of consideration, which is why we are quite comfortable with the Labour Party’s amendment.
A number of members have made very powerful contributions on the change that is required and the geographic impact. Gillian Martin was very eloquent on that, as Stewart Stevenson was on the analysis and the strategy, Joan McAlpine was on ambition and honesty, Angus MacDonald was on the need for action, Alasdair Allan was on the role of the commission—he demonstrated its usefulness—and Keith Brown was on the opportunities before us.
I thought that the issue was Maurice Golden’s raison d’être, and it is clear that he enjoyed his contribution to the debate. He almost did not sound like a Tory at all; rather, he sounded like one of those impassioned ecowarrior Tories with whom he has energised himself on a mission.
Claudia Beamish’s contribution was considered, and Mark Ruskell spoke very powerfully about the legacy for communities and the need for decent jobs.
Tavish Scott brought realism to the debate, which was very welcome, and the support of rational and pragmatic change—I say to him that there is no insult; it is all compliments today.
Donald Cameron spoke about a pragmatic and considered approach, and Dean Lockhart spoke about the importance of the economy.
This has been a constructive and helpful debate that I think will help to steer the just transition through. If we tackle the challenges and opportunities that are before us in the fashion that we have this afternoon, our country will be better for it.