The Scottish Government plans to invest over £6 billion on infrastructure such as homes, roads and rail in the next financial year. This blogpost explores what we know of this infrastructure’s likely effect on Scotland’s greenhouse gas emissions.
What is being built?
On 4 February 2021, the Scottish Government published a new five-year infrastructure plan – the Infrastructure Investment Plan for Scotland 2021-22 to 2025-26. This document contains a pipeline of infrastructure projects and programmes that the Scottish Government has a lead role in procuring or funding. The pipeline is organised into three strategic themes:
- Projects and programmes within the Resilient and Sustainable Places theme account for 44% by spend of all those in the pipeline over the next five years. This is primarily social and affordable housing, health facilities and schools.
- The Net Zero and Environmental Sustainability theme accounts for 31% by spend over the next five years, led by projects to decarbonise transport and heating, to promote active travel and to improve the energy efficiency of buildings.
- The Inclusive Economic Growth theme accounts for 25% by spend over the next five years, primarily transport and broadband projects.
SPICe have previously explored the draft Infrastructure Investment Plan (IIP) with reference to the Scottish Government’s climate and environmental ambitions. Now the IIP’s pipeline of projects has been published, further analysis is possible. The rest of this blogpost covers infrastructure spend in annual budgets followed by analysis of the IIP’s pipeline from a climate change perspective.
Scottish budgets have been accompanied by a Carbon Assessment for over a decade. This assessment provides a “snapshot” of the greenhouse gas emissions created by the goods and services (such as concrete, steel and machinery) that will be bought in that budget year. The Carbon Assessment makes no attempt to work out the longer-term effect of spend – for example, whether investment will “lock in” higher or lower carbon behaviour across multiple years.
Doing such a calculation with accuracy and precision would be impossible, but the Scottish Government has made an additional “taxonomy” analysis of its annual capital/infrastructure spend available for the last three budgets. The Scottish Budget 2021-22 includes this “Taxonomy Assessment of the Capital Budget” in the budget document itself and, in her Budget Statement, the Cabinet Secretary for Finance said:
“Our carbon taxonomy shows that nearly 37 per cent—more than £1.9 billion—of our capital investment is low carbon. As we look to Glasgow hosting the 26th conference of the parties—the COP26 summit—in November, we want to inspire global action and demonstrate that Scotland is a world leader in green and renewable technologies.”
The Taxonomy Analysis does not calculate the scale or intensity of any long-term emissions impacts, but simply categorises capital expenditure in the budget as having a broadly positive, negative or neutral effect on future emissions. For example, spending on a rail project is classed as low carbon (i.e. it is expected to reduce greenhouse gas emissions in the long-term), while spending on a motorway project is classed as high carbon (i.e. it is expected to increase greenhouse gas emissions in the long-term). This approach does not quantify infrastructure investment’s impact on emissions but can give an indication of the level of alignment with climate change goals. The Taxonomy Analysis across all four available years demonstrates an increasing proportion of Scottish Government capital spend classified as low carbon.
Five-year Infrastructure Investment Plan
Capital budgets move around substantially from year to year and total figures can be strongly influenced by one or two major phases of expenditure. Therefore, to understand the carbon impact of infrastructure plans, it is useful to look at the longer-term pipeline of projects set out in the five-year IIP.
The IIP estimates the Scottish Government’s infrastructure expenditure over the next five years (2021-26) on the IIP’s pipeline projects to be worth around £15 billion. Applying the “taxonomy” methodology to this five-year planned expenditure shows that 38% can be classified as low carbon, and 5% as high carbon. From this we can conclude that the five-year outlook for the balance of infrastructure spend appears to be broadly similar to the proportions in the 2021-22 budget, but with a potential reduction in high carbon expenditure.
The biggest infrastructure projects take longer than five years to procure and build and the total construction lifetime costs of the IIP’s pipeline is around £30 billion, so double the expenditure in the IIP over the next five years. Applying the “taxonomy” to the IIP’s total construction costs shows that: significantly less expenditure is classified as low carbon (21%) while significantly more is classified as high carbon (23%), compared with the proportions of planned expenditure over 2021-2026. Note however, this analysis includes projects that will be built across significantly different timeframes, some of which have already progressed – see below.
The high carbon share in the total construction costs calculation is significantly larger than that of planned expenditure over the next five years because of two long-term trunk road dualling programmes – the A9 and A96. The A9 dualling is already in progress and the IIP estimates £328 million will be invested over the next five years, with total build costs (including money already spent) estimated at £3 billion. The A96 dualling has not yet started, and only £20 million is estimated to be needed over the next five years compared with a total build cost of £3 billion. The difference between the total build cost versus the (smaller) planned expenditure over the next five years for these two projects serves to significantly increase the high carbon proportion of spend in the graph above.
Do current infrastructure plans match Scotland’s Net Zero ambitions?
This is hard to assess:
- The Carbon Assessment provides a “snapshot” but does not assess whether the programme of Scottish Government’s capital spending will lock in future low carbon behaviour.
- The Taxonomy Analysis does concentrate on the longer-term effect of infrastructure and may be appropriate for a broad “direction of travel” assessment; but is very high-level in nature and does not assess the scale or intensity of an infrastructure project’s effect on future greenhouse gas emissions.
- More detailed carbon impact assessments are available for major infrastructure projects, but cannot be aggregated together to provide an overall picture.
- Fundamentally, none of these analyses can be easily linked to the infrastructure needs of a Net-Zero economy or, for instance, the Scottish Government’s detailed plan to meet Scotland’s climate targets though to 2032 – the Climate Change Plan.
The Scottish Parliament and Scottish Government have recognised some limitations of the current approach. A statutory requirement for future IIPs to assess how they contribute to meeting Scotland’s climate targets was passed by the Scottish Parliament in 2019. In response, the Scottish Government committed to developing a decision-making framework for the next IIP which includes a new carbon assessment methodology, and commissioned external research to explore options. The IIP states that this new carbon assessment of infrastructure plans will “support the next Climate Change Plan” and be developed in “conjunction with” the Scottish Parliament.
Environment, Rural, Constitution and International Research Unit