Climate change Scotland: SNP ministers warned £1.1bn extra a year needed to reach net zero

SNP ministers have been warned they need to boost spending on net zero by more than £1.1 billion a year

Scotland will need to boost capital spending by at least £1.1 billion a year to keep net zero targets on track – despite facing budget cuts from Westminster.

New analysis from the Scottish Fiscal Commission (SFC) has revealed almost £12bn of capital investment will be needed up to 2035, which assumes Scotland’s 2030 target to cut emissions by 75 per cent will be five years late.

SNP ministers have been warned that funding from Westminster may not keep pace with the requirement for Scotland-specific policies to reach net zero.

SNP Net Zero and Energy Secretary Mairi McAllan (Picture: Jeff J Mitchell/Getty Images)

The SFC estimates the Scottish Government would need to spend an average of £1.1bn a year to meet net zero – around 18 per cent of its capital budget.

The commission’s chairman, Professor Graeme Roy, warned there could be a “disconnect” between what Scotland requires above and beyond England or UK-wide polices for net zero, “without equivalent funding following through”.

The commission’s report states “there is expected to be an additional £145bn invested in Scotland between 2020 and 2050”, including “£41bn invested by the public sector”.

SNP ministers have insisted the bulk of funding to reach net zero will need to come from the private sector. The analysis reveals that “expected public spend on net zero per person in Scotland is higher than in the rest of the UK”, which “may create pressure for the Scottish budget as the required investment may not be completely covered by block grant funding” from Westminster.

The commission also highlighted a risk that Scotland facing a more extreme climate to England in any given year could create a funding gap.

The report said that if “severe weather caused more damage in Scotland in one financial year and more damage in the rest of the UK another year … the Scottish Government’s capacity to cope with the corresponding fiscal pressures would be limited”.

There are also concerns that Scotland receiving knock-on funding from UK government spending on trees and peatland may not give enough money to SNP ministers.

The report said “Scotland contains 32 per cent of the UK’s land mass, with roughly half of its trees and 70 per cent of its peatland”, but warns “Scotland is expected to invest more … relative to the size of its population”.

Mr Roy said: “To better assess the fiscal risks facing the Scottish Government, we need more information from both governments about their plans for tackling all aspects of the climate change challenge.

“Handling not just the achievement of net zero and the future adaptation challenges, but also their fiscal consequences is a shared endeavour that needs to be managed well by both Scottish and UK governments.”

SNP net zero secretary Mairi McAllan said "net zero is a significant economic opportunity for Scotland”.

She said: “However, delivering the infrastructure required to meet our net zero will also require responsible investment by the private sector and – crucially – the UK government, who needs to stop shirking their responsibility and invest.

“That’s why it is deeply concerning that we are expecting a real-terms cut to our UK capital funding of 8.7 per cent over five years, totalling around £1.3bn.”