2.5 Scotland's Resources
Section 2.5 outlines the economic opportunities which will arise from a move to a low carbon economy that relate to sustainable use of Scotland's natural resources, land, water, air. In addition it considers resource used by Scotland's economy; and the opportunity to become more resources efficient as well as take advantage of secondary resources, materials available within Scotland's waste stream. It discusses the strategic objectives previously outlined in section 1.3 of the strategy with immediate actions, for government and the wider public sector to support business and industry maximise those opportunities.
Transforming our land based industries and use of environmental resources
Climate change is one of the greatest challenges facing Scotland's environment and communities through its impacts not just on the climate, but also on the environmental resources including fresh water supplies, the air we breathe, the natural materials used to make goods and products, and our ability to produce food.
There are a number of challenges as a direct result of our changing climate that could potentially impact on Scotland's natural resources across Scottish industry and business more widely which government, the wider public sector and in particular Scotland's research community are tackling for instance in relation to flooding and/or drought impacting directly on industry e.g. food production, leisure use or using less energy in water supply and waste water treatment in order to decrease carbon emissions.
Scotland's rich and diverse environment is a national asset and a source of competitive advantage for Scotland. As a nation we trade on its quality, so its continuing health and improvement are vital to sustainable economic growth. In the current economic climate the challenge of protecting Scotland's resources is all the more important. Many of Scotland's economic growth sectors such as tourism, agriculture and the food and drink sectors depend on our high quality air, land and water. It is important the government and wider public sector take action to conserve and enhance Scotland's environment, supporting these critical sectors and ensuring they are resilient to future climatic changes in the transition to a low carbon economy and ensuring sustainable economic growth.
It is estimated that the eco-systems services sector is valued at around £20 billion to the economy. A low carbon economy and society should not only seek to mitigate climate change through the reduction in greenhouse gas emissions and build resilience to a changing climate, but also recognise the economic and innovation opportunities that lie within the wider environmental pressures and emerging challenges.
As discussed previously in this document, it will require investment and growth within the low carbon and environmental technology sectors as well as the renewable energy opportunities, to support Scottish and global industry meet their environmental responsibilities and achieve long-term environmental gain for businesses and communities.
Scotch Whisky industry distillers are not newcomers to sustainability; raw materials, traditional production methods, and world famous brands rely on a pristine environment.
Through the Scotch Whisky Association, distillers launched an ambitious industry-wide environment strategy in 2009, the first of its kind in Scotland. Commitments include:
- at least 80% of primary energy requirements from non-fossil fuel sources by 2050;
- 40% of packaging from recycled materials by 2020;
- 100% of packaging is recyclable or reusable by 2020;
- zero waste to landfill from packaging operations; and
- sustainable cask and water management policies.
Improved operational efficiency is being supported by major investments of over £100m, with an emphasis on renewable energy.
Gavin Hewitt, Chief Executive of the Scotch Whisky Association, said: ' We are looking to the future with a strategy that makes good environmental and business sense. Distillers are making more whisky but are using less energy to do so. Targets will be met through industry investment and collaboration, supported by our supply chain and government.'
Access to raw materials is critical to the sustainable growth of any economy. Some of these resources are biotic and therefore directly dependent on the environment, for example agriculture and fisheries. Access to mineral resources is largely dependant on global markets, but there are important considerations around this:
- The extraction of mineral resources and primary processing of these materials is carbon intensive so the utilisation of these materials contributes to the overall climate impact of Scotland's economic activity; and
- With global economic development there is growing recognition that there are risks around future supply of resources critical to the Scottish economy
These factors suggest that the following should form an element of Scotland's approach to developing a low carbon economy:
- Achieving high levels of resource efficiency and cutting waste out of processes is critical. This has 2 key benefits, it should improve profitability and therefore competitiveness of the Scottish economy. Becoming more resource efficient will also reduce the carbon intensity of economic activity in Scotland;
- Scotland may not have access to primary materials critical to its economic development, but as a western developed economy it has access to secondary raw materials in its waste steam. Getting better at accessing these resources, and developing the ability to reprocess materials here in Scotland will help Scotland in managing its own demand for scarce materials, and will also allow Scotland to become a leader of environmental technologies in this area.
|Zero Waste Scotland92 is a one-stop-shop service for businesses seeking advice and support around reducing waste and improving resource efficiency, the existing programme delivered over £30M saving to business in 2008|
The Scottish Government and the wider public sector has an increasingly important role to play in maximising the influence and incentives to market that the public sector can bring through joined up public agency working and monitoring within environmental resources to:
- promote consistency of data collection and reporting, joint procurement and economies of scale;
- ensure technology developers, researchers, business and industry are aware of emerging legislation and environmental challenges so that technology opportunities can be realised, and Scottish firms can be ahead of the game.
Within the Low Carbon Environmental Goods and Services activities the Environmental sub-sectors offer a number of areas where Scotland has a revealed comparative advantage ( RCA above 1 indicates that Scotland's exports/imports ratio for a particular item is greater than Scotland's ratio of exports/imports for all goods). This is illustrated in figure 18, below:
Figure 18: RCA Environmental Sub Sectors
Source: Scotland's Low Carbon and Environmental Goods and Services Sector Study, Innovas Solutions, 2010.
There are several areas of opportunity that exist in the sub sectors relating to environmental resources across: environmental monitoring and instrumentation; land use; water supply and waste water treatment; minimising air pollution, and; recycling and recovery and waste management.
In 2008/09 the global environmental monitoring and instrumentation sector 93 was worth £4.5bn and the UK market was £0.16bn. By 2014/15 the UK market is expected to grow to £0.19bn.
There are specific opportunities in environmental monitoring sub sector in a number of specific areas relating to the commercialisation of emerging research in areas such as Environmental Genomics research to support environmental assessment and monitoring and the adaptation to environmental monitoring of sensor technology which has been developed for other sectors, for instance for defence. This technology has uses such as remote sensor monitoring which reduces the need to travel to collect environmental monitoring samples and the hazard of collecting samples in hard to access areas.
Biomatrix Water ( BW), formed in 2008 and based in Forres, is working to provide high performance ecological water treatment and water recycling technologies which are modular, economically competitive, ecologically biodiverse and aesthetically beautiful. Delivering to markets in the three main countries in which they operate. They are on target to achieve turnover of circa £800k by 2013. The total water market is worth $45 898m with growth of between 5% and 10.5%.
The majority of conventional treatment systems available today use a relatively narrow spectrum of biological treatment processes and despite advances, most conventional water treatment plants remain slow to build, energy intensive, and aesthetically unattractive. BW's modular ecological approach provides a powerful natural water treatment and water recycling solution. Close to one billion people remain without adequate sanitation or wastewater treatment and close to two-billion lack access to uncontaminated domestic water sources.
In recent years there has been a significant increase in demand for natural technologies, which support a broader spectrum of ecological processes and provide multiple environmental, amenity, and performance benefits. BW provides a range of ecological systems to meet this growing demand.
Water Supply and Waste Water Recycling
In 2008/09 the global water supply and waste water treatment sub-sector was worth £242bn and the UK market was £8bn. By 2014/15 the UK market will grow to £9bn. There are over 300 companies in Scotland that play either a direct or indirect role in this sector, some of which are developing the latest technologies for the purification of water supply and the processing of waste water.
Analysis carried out for the Scottish Government reports that the water supply and waste water treatment subsector had a market value in Scotland of £709m and employed 6,200 people in 2008/09. Of the £709m market value in 2008/09, £94m (13.3%) was in exports. Within the sub-sector, Scotland demonstrated strong or above-average performance compared to the rest of the UK in a number of areas 94:
- Technology, research and development was worth £39m - 21.2% of the UK market, as compared with an average of 7.9% share for the low carbon environmental goods and services sector as a whole;
- Engineering was worth £289m, 13.8% of the UK market;
- Other specific areas e.g. marine pollution control, and water and wastewater treatment.
DEFRA/ HMRC Enhanced Capital Allowances for Water Efficient Technologies
The ECA scheme provides 100% first year allowances for investments in certain water efficient plant and machinery. It enables businesses to write off 100% of the cost of qualifying plant and machinery against taxable profits in the year of purchase. The scheme includes a variety of technologies, such as water efficient taps, toilets, monitoring equipment 95
There are also opportunities relating to development and deployment of renewable energy technologies to decrease carbon emissions from water supply and waste water treatment.
Recycling and Waste Management
In 2008/09 the global combined recycling and recovery and waste management sectors were worth £336bn and the UK market was £12bn (accounting for over 50% of the total UK environmental sector market value). By 2014/15, the UK market is expected to grow to £14bn. There are around 500 companies in Scotland that play either a direct or indirect role in these sub-sectors.
Scotland's aspiration to achieve a Zero Waste Society which include the planned legislative changes that will drive separate collection of materials and banning of key materials from landfill have potential to drive high levels of investment within Scotland. This will include opportunities relating to developing technologies to divert banned waste from landfill, generating energy from waste, and increase segregation of materials for closed loop recycling.
The development of a carbon metric for Scottish recycling performance that will capture and help prioritise the capture and recycling of key materials with high carbon impact as will introducing standards to increase recyclate quality and recovered material content in products. There is strong cross over in this approach to protecting and enhancing Scotland's natural environment. Reducing food waste in the supply chain will reduce demand on agricultural land, reducing environmental impact and increasing productivity.
Collecting unavoidable food waste and treating through anaerobic digestion, avoids GHG emissions from landfill, provides green energy and offers a sustainable chemical fertiliser substitute. This example illustrates the sort of opportunities and synergies there will be in a future low carbon economy with the introduction of new technologies such as anaerobic digestion, efficient practices in the supply chain and behaviour change in all areas.
Optimising climate change policies for air pollution can yield additional benefits of some £24 billion by 2050 to the economy, through actions discussed in previous sections such as:
- Use of ICT - Intelligent Transport Systems to reduce traffic congestion and improve local air pollution impacts;
- promoting ultra low-carbon vehicles;
- renewable sources of electricity which do not involve combustion;
- energy efficiency measures, and
- reducing agricultural demand for nitrogen.
DEFRA and the UK Devolved Administrations recently published 'Air Pollution: Action in a Changing Climate' 96 This document encourages key agencies to examine policies to tackle poor air quality and climate change, and consider integrating these policies when suitable. This would make for a more effective use of limited funds and resources available to tackle these problems.
The Land use sector includes agriculture, forestry, other land based industries such as food and drink tourism and recreation e.g. field sports. Agriculture is hugely important to Scotland. It is directly responsible for contributing about £700 million to the economy and supporting 65,000 jobs.
Food and drink accounts for one in five manufacturing jobs in Scotland. If the whole supply chain is included, from primary producers to retailing and food services, the sector supports 75,000 businesses and 360,000 people. The National Food and Drink Policy sets out the Government's economic, health and environmental aims for the food and drink sector.
The Scottish Government is doing educational work in food supply chains in schools, colleges and universities. The main research providers in food production and land management are conducting high level research into reducing carbon into our agriculture and other areas to drive towards lowering carbon usage in agriculture. Farming also provides a range of public goods which market mechanisms do not always reflect: for example, protecting the environment, sustaining communities in remote areas and maintaining a national food producing capacity.
Scotland is unique in that 85% of Scotland's agricultural land is Less Favoured, relying on support to offset the significant natural handicaps, and nearly 65% is suitable only for the rough grazing of sheep and cattle. The Less Favoured Area accounts for over 12,500 farming and crofting businesses. A Vision for Scottish Agriculture sets out agriculture's significant role in the Scottish economy, food production and environmental sustainability 97:
The Scottish Government is working in partnership with the agriculture industry through the voluntary Farming for a Better Climate initiative to strengthen farm businesses 98. The initiative outlines measures that farmers can take to reduce outline measures that farmers can take to reduce outputs and develop new income streams. These key action areas are:
- Using energy and fuels efficiently;
- Developing renewable energy;
- Locking carbon into the soil and vegetation;
- Optimising the application of fertiliser and manures;
- Optimising livestock management and storage of waste.
There are number of opportunities including supporting a move to more sustainable farming practices and developing knowledge and integration of new technologies and scientific practices into the traditional methods used by farmers to support economic sustainability and growth in a low carbon economy. These include:
- Supporting moves to more sustainable farming practice such as use of Anaerobic Digestate as agricultural biofertiliser. Digestates can be used as soil improvers, avoiding the need for farmers to purchase costly fertilisers and so reducing the potential for watercourse pollution;
- Integration of new technologies into farming methods such as the use of minimum tillage, slurry injectors, slurry separators;
- Integration of scientific practices into farming methods such as developing alternatives to nitrate based fertilisers and the use of nitrification inhibitors;
- Diversification to agricultural practices that are resilient to climate change and protect Scotland's rural environment; and
- Research into crop varieties for different climates 99
In 2008, the Scottish Government established a Climate Change Programme, delivered by Soil Association Scotland, specifically to assist farmers and land managers to be able to adapt and develop their farming practice and enable positive and profitable responses to climate change. The programme aims are therefore not just about skilling up to adapt to climate change, but encourage the farms to grow their profitability.
The Climate Change Programme uses practical skill based seminars based around real life examples of developing farming practice on farms across Scotland. Each seminar is hosted by a farmer who has already implemented adaptation measures. This practical approach is backed up with up to date information and follow up support. Participants feed back the practical adaptations they are putting into place across their farms and demonstrating with this an increased understanding of their role in ensuring agriculture is more efficient, more environmentally sustainable and more productive.
The Climate Change Programme is funded through Scotland Rural Development Programme. It is one of the actions the Scottish Government has put into place for Agriculture as part of the Government's Climate Change Adaptation Framework.
The Common Agricultural Policy ( CAP) will be reformed by the European Union post 2013. This will have a strong stimulus on decisions taken at farm level. Consideration will be given to making the best use of CAP tools through Scottish the rural development plan to support economic growth in the rural economy 100.
The draft Land Use Strategy, which is currently the subject of public consultation, describes in broad terms the Scottish Government's approach to sustainable land use, and provides a vision for the long-term. It proposes three strategic objectives which mirror the three sustainability pillars: (i) successful land-based businesses; (ii) flourishing natural environments; and (iii) vibrant, sustainable communities, and backs these up with specific actions that Government will take in the next five years. By proposing a national framework of key principles for sustainable land use, the Strategy will inform decisions taken locally about the land, in line with Strategic and Local Development Plans.
The Land Use Strategy is produced against the background of the Government's climate change commitments, and demonstrates the role of land use in a low carbon economy: from reducing greenhouse gas emissions from land use to capitalising on renewable energy opportunities; from carbon retention in peat soils to balancing our goals on food security and tree-planting.
Marine economic activity is worth about £2.2bn to the Scottish economy 101 Scotland's seas also account for another £20bn from the North Sea oil and gas sector.
The Marine (Scotland) Act 2010 paves the way for a national marine plan to be developed to guide the management of the activities in the seas around Scotland. The plan is required to include objectives relating to climate change, both for reducing Scotland's carbon footprint and on adaptation.
Scotland has significant research strengths in marine, and supported by the Scottish Funding Council, the Marine Science pool MASTS102 focuses on the effects of marine energy on the marine environment.
Scotland is supporting a growing sustainable aquaculture industry through the implementation of 'A Fresh Start': the renewed Strategic Framework for Scottish Aquaculture 103. Examples of initiatives which will help Scotland along the road to a low carbon economy include:
- Support for a growing Scottish Shellfish sector (including the establishment of a national shellfish forum). Shellfish production is a environmentally benign/carbon positive industry - taking carbon out of the environment and locking into shells;
- Work on developing microalgae as a feed substitute for finfish aquaculture - as one future solution to reduce ecological & carbon footprint of using fish-only based feed sourced from wild stocks and exported globally;
- Work on developing macro-algae as a biofuel including the establishment of a pilot macro-algae farm.
A Marine and Fisheries adaptation plan is also being prepared as part of the Scottish Government climate change adaptation framework.
Strategic Objectives for Government and Wider Public Sector
There are two main areas of market opportunities in relation to environmental resources and the industries that relate to them, which the Scottish Government and wider public Sector will focus on. These are in relation to: developing and supporting the uptake of new emerging technologies and encouraging and supporting industry to develop sustainable practices that will secure a successful transition to a low carbon economy; and, implementing a regulatory framework that supports the growth of industry and protects environmental resources. Immediate actions are set out in Section 1.3 of the strategy.
Objective 13: the development and uptake of emerging technologies. Encouraging industry to develop sustainable practices that will support economic growth, while protecting the environment through efficient resource use and minimising waste and pollution.
The threats to Scotland's environment are changing. Traditional risks arising from well understood, long regulated industries are reducing. New risks are being identified and will require ongoing research and monitoring to understand how Scotland's environment responds to new developing industries. This is essential so that we can target regulatory activities and identify new technology solutions to reduce environmental harm, protect the environment whilst supporting business and economic growth.
Improvement in data and understanding where there is real harm to the environment resulting in a more targeted approach to environmental protection and improvements where we can make the greatest impact, will underpin development of business and industrial processes for the future.
It is essential that Scotland's low carbon economy will impact positively on air, soil and water quality, food production, and will contribute directly towards climate regulation. Many aspects of the LCE will have effects on the supporting ecosystem. Ecosystem Services104 provides a framework for sustainable management of environmental resources. It requires the consideration of the effects of actions on every element of an ecosystem, based on the recognition that all elements of an ecosystem are linked. While water supply and waste water treatment is an area where Scotland has strengths, we currently lack a single market-focused grouping to pool the efforts of our water companies into a comprehensive effort to meet our domestic needs for water solutions, and additionally to collectively target and exploit international market opportunities.
Scottish Water will evolve from a successful utility into a dynamic water agency, helping Scotland to become the world's first hydro-economy, wisely exploiting our water to help drive our economy. Scottish Water is currently the largest consumer of electrical power in Scotland. Instead, the Scottish Government intends to give it the powers to become one of the largest generators of renewable electricity in Scotland. Scottish Water will also support the bid to hold the 2015 World Water Forum, which would bring up to 30,000 delegates to Glasgow, including heads of state and Government.
Scottish Water will also assist in establishing a Scottish centre of excellence that is modelled on the Stockholm International Water Institute, to foster commercial and humanitarian innovation. Scottish Enterprise and Scottish Development International are already working with a number of companies and universities to create a new industrial grouping to address the opportunities and challenges in the water market at home and abroad;
Assessing carbon in decision making
A broad view is required when identifying where Scotland should be targeting its greatest low carbon opportunities, taking a balanced approach to the consideration of environmental/resource, costs and benefits, when assessing options for the future economic transition e.g. water resources against energy use, food production against sustainable biofuels, natural habitats against agricultural intensification.
As an example Scotland's soils are rich in carbon, containing some 3,000 Mt of carbon. Developments on peat might generate losses of carbon which in some cases may reduce the potential environmental benefits of the scheme. Scottish Government, energy suppliers and environmental NGOs are working together to better understand the impact of building wind farms on peatlands, which will facilitate a measured sustainable approach being taken. Work funded by Scottish Government developed a tool to calculate the impact of wind farm developments on soils carbon stock held in peat. This provides a transparent and easy to follow method for estimating the impacts of wind farms on the carbon dynamics of peat lands. The tool is recommend for use by developers in the consenting process 105.
Carbon Decision Making
Scottish Government is developing a carbon metric to drive recycling of all resources in Scotland. This metric is aimed decision makers in the waste management sector to help them priorities the reuse and recycling of specific material, with a high embedded carbon content. The metric will be used to measure Scotland's recycling performance in the future. Recycling has the potential to not only reduce Scotland's direct emissions, but Scotland's global carbon footprint.
SEPA's Controlled Activities Regulation Methodology ( WAT- RM-34) for licensing of hydro schemes - balancing adverse impacts on water environment against positive climate change impacts. The methodology requires the positive and negative impacts of new activities to be taken into account so that clear and consistent decisions about their contribution to human health, human safety or sustainable development can be made.
Working with the UK water industry, Scottish Water has developed mechanisms for carbon accounting that may prove to be useful when considering how to assess carbon in regulation. Work is ongoing between SEPA and Scottish Water to explore how this approach might work in regulatory decisions.
Scotland's economy is highly dependent on the availability of primary materials to produce the goods, services and infrastructure that we all take for granted as part of modern life. The transition to a low carbon economy requires inputs of materials and energy - aggregates, timber and steel for construction; indium for solar panels; lithium and rare earth metals for wind turbines and electric vehicles; phosphorous for agriculture; palm oil for food and drink; copper for transformers and electricity transmission.
Quality Meat Scotland, the National Farmers Union and the Scottish Agricultural Organisation Society published Producing More With Less: A Joint Industry Commitment on Climate Change. This sets out the agricultural industry's commitment to achieving a low-carbon economy and highlight that agriculture can mitigate the effects of climate change while enhancing its own economic sustainability. http://www.nfus.org.uk/uploadedFiles/Campaigns/Climate_Change.pdf106
Some raw materials can be considered to be particularly critical, for three reasons: their significant economic importance for key sectors; high supply/cost risks; and a lack of substitutes.
A crucial challenge to Scottish business and industry is therefore to become more efficient in the production of goods and services, reducing primary resource demand and recovering valuable resources from the waste stream.
Strategic Objective 14 Setting a policy and regulatory framework. Supporting the growth of industry and protects the environment and available natural resources.
Environmental Regulation should not be viewed as a barrier to realising new low carbon opportunities and solutions. Effective, targeted and enabling Policy and Regulation can support business and communities secure the transition to a low carbon economy through the setting of standards, emission limits; and drive innovation/behaviour changes to encouraging cost effectiveness through resource efficiency and the uptake of new environmental and low carbon technology solutions and practices.
Economic opportunities lie in developing technologies to support Scottish business and industry in meeting emission standards and compliance with regulation and adapting the regulatory framework to support the innovation processes (particularly in the areas of development and demonstration) and uptake of new technologies. Some examples of how environmental regulation is can support innovation and a low carbon economy are highlighted below:
The Better Waste Regulation Action Plan recognises that legislation on waste was written at a time when Scotland's principal means of dealing with waste was to landfill it. New policies, practices and technologies have emerged in recent years which mean that the legislative controls could be improved to encourage innovation and ensure that the aims and requirements of the Waste Framework Directive are delivered in their modern context.
Scotland's Zero Waste Plan looks at new regulations to achieve its vision whilst creating a stable regulatory framework providing confidence for investment and innovation, and helping to reduce green house gas emissions. For example:
- Reducing the amount of bio-degradable and valuable resources waste in landfill to avoid production of methane, one of the main greenhouse gases;
- Driving separate collection of all materials, to aid high levels of recycling and reduce dependence on primary raw materials. This will reduce energy (and CO 2) required to extract raw materials; and
- Specifically drive separate collection of all food waste. This will lead to Anaerobic Digestion facilities, renewable energy potential and production of a sustainable fertiliser.
Fertilisers account for a significant part of Scotland's green house gas emissions resulting from land use. Environmental legislation (Nitrates Directive) has limited the quantities of nitrogen fertiliser that farmers in certain areas may apply to land and introduced other measures for the protection of the water environment.
Following a formal transfer of functions from the UK Government to Scottish Ministers, the Pollution Prevention and Control (Scotland) Amendment Regulations 2009 extended SEPA's powers to reduce the energy consumed by industrial plants. While not designed to directly regulate CO 2 emissions from industrial processes, the regulations enable SEPA to indirectly influence the carbon intensity of larger industrial processes (referred to as Part A0 through the requirement to apply Best Available Techniques ( BAT) to the efficient use of raw materials and energy.
Water Framework Directive - River Basin Management Plans ( RBMPs) ensure that public sector bodies, businesses and individuals work together to protect the water environment and address significant impacts by co-ordinating all aspects of water management to protect and improve ecological quality of the water environment. Actions include ongoing reduction of pollution, over-abstraction, engineering modifications that have caused damage to banks, beds and shores; invasive non-native plants and animals.