Net zero transition needs significant investment to avoid failure, report warns

Scotland’s route to net zero must include significant investment to avoid failure, a report has warned.

The investment report by the Just Transition Commission (JTC) told ministers the “cost of failure is sky high”, and stressed the country cannot afford to lose the opportunity net zero brings.

With four cities – Aberdeen, Edinburgh, Glasgow and Dundee – bidding to be home to the headquarters of UK Government’s Great British Energy project, the commission has urged the Scottish Government to make the most of similar opportunities.

The report said the current approach is not enough, with ministers told to “urgently” introduce a new model to achieve long-term economic value in the sector.

It said: “If investment provision is left to the market alone, we will see an unjust and ineffective transition.”

But it also warned ministers to factor in the “cost of failure” in areas like job losses and loss of ecosystem services if investment is not managed.

“Short-term ‘savings’ will be hugely costly to Scotland if these ultimately stymie fair economic development at this critical juncture,” the report said.

The commission hailed the ‘tremendous opportunities net zero brings for economic and social renewal’ (PA). PA Media

It also called for a “clear, high-quality prospectus for just transition investment” with the aim of generating “significant long-term value”.

Satwat Rehman, co-chairman of the commission, said: “Our report leaves no room for doubt that if investment in Scotland’s journey to net zero is left to the market alone, we will see an unjust and ineffective transition.

“We need government at all levels to pay a proactive role in making sure the costs and benefits associated with these major but foreseeable changes are shared equitably.

“This will involve new ways of working collaboratively and building up capacity where required to meet this challenge head-on, demonstrate responsible economic stewardship, and make the most of the tremendous opportunities net zero brings for economic and social renewal.”

Professor Dave Reay, co-chairman, said: “The communities and businesses we speak to around the country keep telling us they want to see Scotland’s commitment to a just transition come to life through a new set of measurable policies and investments.

“I hope the commission’s report establishes a shared understanding of where we are on this national mission, and what now needs to happen if we are to finance a truly just transition to a low-carbon economy.”

A Scottish Government spokesperson said: “The Scottish Government will carefully consider this report as it continues the drive to reach net zero emissions by 2045. With emissions in Scotland already nearly cut in half, we are well positioned to continue leading on climate action that is fair, ambitious and capable of rising to the emergency before us.

“Our upcoming energy strategy and just transition plan will set out how we will take advantage of the enormous opportunities offered by becoming a net zero economy. Based on analysis from EY, low carbon and renewable energy could support nearly 80,000 jobs in Scotland by 2050.

“The Scottish Government is working with the UK Government, local authorities, trade unions and the private sector to ensure that a just transition is delivered across our sectors, sites and regions to secure a sustainable future for our economy, workforce and environment.”