Scotland's Renewable Energy Blog

Transition to a low carbon economy is new strategic priority

In their Government Economic Strategy paper published  this month the Scottish government have  established a new Strategic Priority – Transition to a Low Carbon Economy.  The relevant parts of the document referring to this strategic priority are reproduced below:

THE ECONOMIC OPPORTUNITIES FROM LOW CARBON

 As events over the last four years have demonstrated, economic conditions can change rapidly and unexpectedly. Present conditions, while profoundlydifficult, offer enormous hope for achieving a low-carbon economy.

 Scotland is leading in many areas, particularly in renewable energy. Weare already on our way to our low-carbon future – with significant inward investment in low-carbon activity ove rrecent years as well as a vibrant export market for low carbon products .To clarify the future path of our economy, the Scottish Government has committed to four transformational changes:

•  decarbonise electricity generation by 2030
•  largely decarbonise heat sector by 2050
• almost complete decarbonisation of road transport by 2050
• significant decarbonisation of rail by 2050

 and  establish a comprehensive approach to ensure that carbon is fully factored into strategic and local decisions about rural and urban land us

 In line with these transformational changes, the Scottish Government has set itself stretching targets:

•  The equivalent to 100% ofScotland’s demand for electricity to be met by renewables by 2020
•   End use energy consumption to reduce by 12% by 2020
• 11% of heat demand to be met by renewables by 2020

 The transition to a low-carbon economy will help us become more resilient and deal with commodity and energy price volatility, support economic recovery and provide us with a platform for greater international trade. Not taking the opportunity now means higher costs in the future: both in terms of future costs of carbon and lost growth opportunities as other countries embrace low carbon objectives.

 
SCOTLAND’S LOW CARBON ECONOMY

•  In 2007-2008, Scotland’s low carbon market was worth around £8.5 billion (8.5% of the Scottish economy) and is forecast to rise to around £12 billion by2015-16
• Jobs in the low carbon sector could grow by 4% a year to 2020, rising from 70,000to 130,000, over 5% of the Scottish workforce
• Offshore wind alone could bring in around £30 billion of inward investment, and up to 28,000 jobs
• Sales of off-shore electricity could value £14 billion by 2050 – the equivalent of £2,700 for each person in Scotland

 
STRATEGIC PRIORITIES

 In the context of the Government Economic Strategy, there are three overarching themes that are considered as priorities in delivering low-carbon growth

1.  Making Scotland a leading low-carbon investment destination
2.  Maximising the social and economic opportunities of energy and resource efficiency
3.  Encouraging consumer and business demand for low carbon products and services.

MAKING SCOTLAND A LEADING LOW-CARBON INVESTMENT DESTINATION

 The key to delivering a low carbon economy will be investment – public and private; local, national and international. We need to ensure that our signals to investors are strong, loud and credible; and that we understand and address investment requirements with clarity and precision. This means funding or enabling supportive infrastructure, maintaining a stable policy climate, working with investors and others to find alternatives where no suitable financial models are available, and taking our offer to the world. We need to understand all aspects of low-carbon deal chains fo rinvestors – ensuring that we do not setup unnecessary barriers. An example of where we are getting this right is our National Renewables Infrastructure Plan. There is significant global potential to bring international low carbon investor stoScotland. In 2010Scotlandhosted our first international Low Carbon Investment Conference inEdinburgh– and the second is taking place in September 2011. Inward investment continues to flow into the low carbon sector inScotland. For example, Iberdrola (the parent company of Scottish Power) has committed to a £2.7 billion investment over the two years to 2013. Building on this momentum we will

•  Work with partners to ensure ou rpolicies are investment friendly, as well as focussing on the development of financial models and products that de-risk low carbon technology investments – particularly those in the energy sector
•  Continue to press the UK and the EU in critical path-dependent policy areas such as the UK Energy Market Reform and the EU climate change target as well as ensuring that we receive a fair deal from the Green Investment Bank and secure immediate access to Scotland’s Fossil Fuel Levy funds
•  Further develop our international profile to secure investment and promote our low carbon exporters
•  Assist organisations inScotlandto be ‘programme and project ready’ as investors increasingly turn toScotland looking for opportunities

 While international investment is essential, local and community investment offers people across Scotland opportunities to benefit from the low-carbon transformation. Opportunities range from community renewable projects through to energy efficiency measures, electric vehicles, smart grids, and household benefits  from Feed-in Tariffs and the RenewableHeat Incentive.  We will:

•  Work with a range of public, thirdsector organisations and investors to enable innovative funding models that reduce emissions and dependency on fossil fuels and also provide revenues to communities, households and investors

• Develop the Climate Challenge Fund inline with our Manifesto commitment to provide assistance to communities that wish to raise revenue by starting new green enterprises

LINKS

The Government Economic Strategy – full document