Green benefits should be shared by whole farming sector

“Green laird” buyers of swathes of Scotland’s land for carbon credit projects or to harness other elements of natural capital bring risks and opportunities for both locals and the nation.

Sarah Jane Laing, chief executive of Scottish Land & Estates

In a major discussion document published yesterday, the Scottish Land Commission (SLC) acknowledged that strategies to achieve net zero were increasingly shaping investment and business plans in the finance and corporate sectors , but warned that legislation currently lagged behind the growth of this emerging market.

The commission said that while natural capital markets were much wider than carbon, this aspect was the most developed at the moment – and was already influencing the land market.

And while there was no explicit legal framework for the ownership of rights to carbon the briefing paper said that, in practical terms, control over land brought control over the ability to pursue activities to sequester carbon – and this had already begun to impact on the tenanted sector.

The commission said that balance of rights and responsibilities between landlords, tenants, and third parties needed to be determined – but the pace of change meant that a pragmatic approach was currently required:

“In practice, despite uncertainties, the pressure to deal with live situations means that landlords and tenants will need to co-operate” – and this had been reflected in the recent publication of interim guidance on the issue by the Tenant Farming Commissioner which advised a collaborative approach was taken to the benefit of all parties.

However the commission also warned that the upwards spiral in land prices driven by such investment risked acting against the Scottish Government’s ambition to diversify land ownership:

“Given Scotland’s starting point of a highly concentrated pattern of land ownership and a relatively unregulated land market, there is a significant risk that emerging natural capital value will further concentrate ownership and benefits arising from land.”

It also warned that in the short term there were also risks for individual land managers, farmers and crofters in making decisions about selling rights to carbon at a time when values were uncertain and their need to retain carbon units within their own business remain unclear. And in the longer term the financial benefits of Scotland’s natural capital risked being narrowly distributed and extracted from local economies, or exported outwith Scotland, rather than be reinvested.

Commenting on the publication, Sarah Jane Laing, chief executive of Scottish Land & Estates, said that the emergence of ‘green investment’ had the potential to provide existing landowners of all types – including farm tenants - with potential revenue streams.

Commending the SLC paper for looking at how the potential of such markets could best be harnessed for the country, she agreed that both risks and opportunities existed but added:

“It would be a mistake if people thought that there is going to substantial rewards simply for owning land whereas revenue from carbon or nature-based solutions usually depends upon long term contracts and commitment to ongoing management with associated risks and costs.”