Scotland is one of world's most nature-depleted countries. Here's how capitalism can help

Some of the challenges of life in the Highlands, like rain and midges, are here to stay. Others have already persisted far too long. Many of these long-term but surmountable challenges are linked through a single feature: the land.

Land ownership in Scotland is incredibly concentrated. Andy Wightman’s latest analysis suggests that just 421 landowners have half of the private rural land in the country (3.2 million hectares). Only 11.7 per cent is in public ownership, and 2.8 per cent in community ownership. The concentration of land ownership has actually grown worse since 2012.

Land management is similarly limited and often dependent on a small range of subsidies, markets, or private capital. While these support many of the landscapes and products that we value, they have perpetuated or worsened serious environmental and social problems.

Too much global trade is based on degrading nature. However, setting up natural capital markets could create a powerful driving force to tackle the loss of biodiversity (Picture: Stephen Chernin) | Getty Images

Ancient woodlands dying out

Many species and habitats in Scotland are at risk of being lost. Flowering plants, seabirds, lichens and bryophytes have all suffered losses of around half their abundance or distribution in just a few decades. These losses hit hardest locally; many of us have had to watch ancient woodlands gradually die out year by year, or species retreat ever further from the places we used to see them. But even with these experiences, it’s hard not to be shocked to learn that Scotland is already among the most nature-depleted countries in the world.

Environmental problems are mirrored in our communities. Both of the primary schools that I attended, on Skye and near Inverness, have since closed down. Like many others, I left home for education and work and never expected to come back. When I did, it was to a hugely inflated housing market in which holiday lets and second homes were dominating. I was part of an ongoing movement of young people away from rural Scotland; around 10 per cent of those who remain are living in income poverty.

Recent efforts to establish ‘natural capital’ markets – in which measured improvements in environmental outcomes can be sold – have sometimes been blamed for exacerbating these problems. But could they actually be part of a long-overdue solution?

Businesses based on degrading nature

It’s certainly true that a new market in land could make things worse, and has already added to the inflationary pressure on land prices. This pressure is almost certain to grow anyway as demands for timber and other resources climb sharply.

These demands are partly driven by essential products and key industries, but they feed into huge existing markets that rely on the natural world while actively degrading it. Scotland literally bears the scars of draining and planting on deep peat, one of the world’s most important carbon stores. Globally, trillions of dollars each year are invested in markets that allow the costs of climate change and biodiversity collapse to be borne elsewhere.

In principle, natural capital markets could start to correct this balance, giving a positive value to functioning environments. They could encourage the production of food, timber and other necessary goods in ways that reverse environmental damage, and they could discourage unnecessary activities that cause new damage.

They could have other benefits too. Two years ago, I returned to the area where I grew up, to work on a rewilding project established in anticipation of natural capital markets. Other jobs have followed and have often been filled from a strikingly large pool of young, talented local people. Alongside reasonable wariness about how this new market will work, there is real enthusiasm for an all-too-rare chance to improve local conditions.

Avoiding a zero-sum game

Natural capital markets certainly don’t justify such enthusiasm on their own, however. Strong regulation is needed to ensure that their effects are legitimate and positive – and indeed there is pressure from all sides for regulation of this kind. Value can’t only be assigned to actions that offset damage elsewhere, or that provide a fig leaf for carbon emissions or environmental damage that shouldn’t be occurring in the first place. These leave us stuck, at best, in a zero-sum game.

An agreement at the recent Conference of the Parties to the Convention on Biological Diversity established a useful precedent here, requiring companies that profit from genetic information from nature to pay into funds for nature conservation, irrespective of their own impacts. If this principle is extended to those that benefit from other aspects of the natural world, it could have huge environmental benefits.

Whatever the mechanisms involved, nobody should be dreaming of vast profits from natural capital. After clearing the basic hurdle of making nature restoration pay at least as well as nature degradation, we have to ensure that natural capital doesn’t just become a vehicle for wealth (and land) accumulation.

And this is where other policy areas come in. Chief among these is land reform, and the need to reverse the trend towards concentration of ownership, however that ownership is funded. We must also reform existing markets and subsidies so that they cause less damage, and further penalise particularly harmful practices through interventions like the John Muir Trust’s proposed carbon emissions land tax.

A powerful force for good

Nationally, these all require a coherent vision of how we use our land, one that takes account of everyone’s interests and doesn’t just emerge from market pressures or the choices of a few hundred people.

But developing this vision shouldn’t mean pausing other efforts to escape our current predicament. If natural capital markets can make nature restoration a feasible proposition in Scotland, and if social as well as environmental targets can be embedded in them, they might become one of our most powerful drivers away from the crises we have spent so long moving towards.

Dr Calum Brown is co-chief scientist at Highlands Rewilding Ltd