Climate change law to rip £8bn hole in budgets

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SPENDING on schools, hospitals and other key services is set to be hit by the estimated £8 billion cost of Scotland's world-leading climate change laws, the government have admitted.

• Passed in Scottish Parliament, the ambitious Climate Change Act seeks to maximise energy efficiency Picture: PA

In a paper obtained by Scotland on Sunday under Freedom of Information laws, officials declare that cuts to all other portfolios will "inevitably result" from the new climate change targets.

Officials have placed an 8bn price tag on achieving the target to reduce by 2020 emissions harmful to the environment by 42 per cent below 1990 levels. But the scheme comes as departmental budgets are set to be reduced by as much as 40 per cent between 2010 and 2014, putting unprecedented pressure on services.

Passed by the Scottish Parliament last year, the Climate Change (Scotland) Act was hailed as the most ambitious attempt to cut emissions anywhere in the world. Ministers will set annual targets to reduce emissions and all public bodies must comply.

The paper on the cost of the Act, written by the Scottish Government's Climate Change Division, sets out provisional costings on how much would need to be spent up until 2022. The biggest cost would be transport, where 3.9bn has been pencilled in for emissions-cutting measures such as moves to strictly enforce 70mph limits and to build new cycle paths and footpaths. The paper also suggests that up to 3.2bn will go on energy efficiency plans, the bulk of it on home insulation subsidies.

A further 800m will go on planting an extra 15,000 hectares of forest every year.

The paper notes: "Scottish government funding of action to achieve our emissions targets would, at a time of overall budget reductions, inevitably result in an impact on spend across all portfolios."

The 8bn estimate was published earlier this year by the Independent Budget Review group. The report said that the country's ageing population and the climate change laws were the key extra cost pressures that taxpayers in Scotland would soon have to face.

The IBR report noted that the "extremely ambitious" target would have "significant implications for the whole of the economy, including public sector budgets."

Derek Brownlee, finance spokesman for the Scots Tories, said: "We need to make sure we are not reducing emissions by wrecking the economy."

The paper reveals that ideas to reduce emissions in transport include a workplace parking levy, the promotion of car clubs, and investment in a better bus network. On reducing emissions, it notes that a "significant reduction" could be achieved by allowing all homes to qualify for insulation subsidies.

Officials insisted last night that the country will gain a competitive advantage and extra jobs by being at the forefront of the "low-carbon economy".