Why Scottish business needs a more realistic net-zero target

Scotland and the UK have a great story to tell when it comes to playing our part in the global push towards a net-zero future. We have an abundance of renewable energy sources, giving us a natural advantage in seizing a lead over international competitors.

But what we lack, so far, is the widespread industrial and manufacturing capacity to make the most of that in-built advantage. This means that, not only are the communities which should be benefiting failing to do so, but also that the overall costs to business of making the transition remain too high.

Scotland has tried to position itself in the vanguard of the green agenda, underlined by the Scottish Government’s commitment to reaching net-zero carbon emissions by 2045. But we need to ask the question, laudable though that goal may be, how realistic is it and what are the costs in the short term?

That’s why I believe common sense should prevail, and a longer timeframe set instead. Pushing the target date back to 2050 to match the UK Government’s goal would not only accord with the reality of where progress stands but also potentially help the public finances in tough times.

The Green Boom offers the hope of future prosperity for Scotland (Picture: William Edwards) | AFP via Getty Images

Can’t simply stop oil

The rush to meet net-zero targets inevitably puts a squeeze on the government’s resources, and allowing an extra five years to meet the commitment could give the Scottish Government some much-needed room to manoeuvre fiscally.

It would also give time for the necessary consideration of how we can best bring the maximum benefits of the green agenda to our communities. That includes those which currently depend on our oil and gas sector, as well as those who previously prospered through heavy industry but who in recent decades have been left behind.

As others have stressed, we cannot simply turn off the taps when it comes to our own domestic oil and gas production. If a just transition is to mean anything, it must involve keeping people in valuable employment until other, equally well-paid, greener jobs come on stream.

The rush to meet net zero by placing increasing demands on businesses is also having consequences far beyond our shores. For example, the Gfanz initiative which emerged at the COP26 climate summit in Glasgow, was designed to deliver the kind of collaborative approach needed, by creating an international alliance of major financial institutions committed to net zero.

I warned in a speech last November that Gfanz was not delivering the kind of transformative change envisaged in 2021. And those fears have only been compounded as the start of this year has seen more companies quit the alliance as a result of the ever-more onerous burdens placed upon them.

No place left behind

That is depressing and not the kind of legacy that was envisaged for Glasgow, Scotland or the UK when we had our moment to effect lasting change. It is clear that delivering on net zero must mean providing the right incentives as well as penalties, otherwise we will struggle to see the scale of investment needed. That requires concerted action from governments and businesses.

In my own work as an entrepreneur and investor, I feel privileged to be involved with companies like subsea cable manufacturer XLCC and Peel Ports, which are at the forefront of work to make the just transition a reality here in Scotland, driving opportunity for the country’s supply chain and creating employment and training. It involves bottom-up growth driven from former industrial heartlands, something we quickly need to see more of.

We also need to prevent the new ‘Green Boom’ from being confined only to certain regions, or history will repeat itself. The 1970s saw Aberdeen and its surroundings thriving economically, while communities like my own in Ayrshire were left behind.

However, until we have the manufacturing capacity to deliver the jobs that will make the transition a reality, we need to rely on expertise and investment from overseas. That includes China, which is a key investor in the green sector.

Engagement with China needs to be sensible, hard-headed and measured, which means being prepared to do business but also being alert to legitimate security concerns about Chinese companies’ involvement in key infrastructure projects.

Profoundly misguided

One of the biggest frustrations of the climate emergency, and arguably one of the biggest barriers to properly addressing it, is the way in which too often it is seen as a wedge issue between environmentalism on the one hand and the interests of business on the other.

As someone who is passionately committed to an agenda of economic growth, opportunity and job creation, but who also sees the necessity of the green agenda, I believe that is a profoundly misguided way of looking at the issue.

Because it is only when we start to see the green and the pro-economy agenda as two halves of the same coin that we can and will finally start to make real progress. Put simply, there is no economic gain to be had if the climate crisis starts to overwhelm us. And on the flipside, there are huge economic opportunities awaiting those who choose to invest in the green agenda.

The smartest business chiefs around the world already understand this and are starting to take the necessary steps to ensure that the interests of climate and enterprise align. For my own part, as someone committed to offering hope and opportunity, especially to communities who for too long have been marginalised or forgotten, I know that the green agenda is a business opportunity, not a threat.

That is especially the case here in Scotland and the UK, where have the resources and potential to power and sustain a green industrial revolution. With the right leadership at both political and corporate level – and crucially, with realistic targets and timescales in place – we can start delivering on an agenda which brings hope, opportunity and prosperity for all.

Dr Marie Macklin CBE is a Scottish businesswoman and investor