Why Scotland needs a green and transformative recovery

Since the first transmission of coronavirus in the UK, events have continued to unfold at an unprecedented pace. The public health impacts are the tragedy at the heart of this pandemic, but the necessary, ongoing lockdown means we are also facing an economic crisis.

Pine forest © Mark Hamblin / 2020 Vision

Although the scale and duration of the economic downturn is still uncertain there is little doubt that we are currently mired in the largest recession in living memory. The Scottish Government estimates that the initial fall in economic activity could be as much as 33%.

“Where the economy goes from here is uncharted territory. Scenarios for its future trajectory start to look like a tin of alphabet spaghetti.”

Where the economy goes from here is uncharted territory. Scenarios for its future trajectory start to look like a tin of alphabet spaghetti, with possibilities including a V, U, W or L shaped recovery. In such uncertain times, economic policy needs to be adaptable to a range of scenarios. The Scottish Government has responded with a four-step economic plan of Response, Reset, Restart and Recover, and a new Advisory Group on Economic Recovery.

The Group will need to have an open, transparent and participative process. Their recommendations must also get the balance right between short-term objectives and delivering a more resilient and sustainable economy, which requires long-term thinking. To help ensure that policy strikes this balance the Scottish Wildlife Trust has developed four tests – the 4Ts.

Policies should be designed to be: Timely – impact quickly, at the right time to help retain jobs; Targeted – support the people most affected and in a way that we get the biggest bang for our pound; Temporary – help the initial recovery but be capable of being withdrawn easily, and Transformative – ensuring that policy encourages the wide-scale change needed to meet our climate change, biodiversity, social inclusion and health imperatives.

The first three tests are often referred to in economics but, in our view, they are not sufficient to ensure that policy focuses on the longer-term. Scotland has an opportunity to take a unique approach by ensuring that its support ‘builds back better’ by making recovery truly transformative. For policies to pass this further test they must focus on all aspects of our wellbeing, in line with the First Minister’s recognition that the “objective of all economic policy should be collective wellbeing”. The long-term focus also significantly reduces the risk that economic policies will be wasteful.

For policies to pass this further test they must focus on all aspects of our wellbeing, in line with the First Minister’s recognition that the “objective of all economic policy should be collective wellbeing”.

This approach must be backed by new targets. We already have legally binding climate change targets but need to go further. It is time to also set clear targets for reversing the grave plight facing Scotland’s wildlife, and the long-term decline in our natural capital.

Policy should also be guided by the valuable new work from 231 leading economists including Nobel Prize winner Joseph Stiglitz, a member of Scotland’s Council of Economic Advisors. This survey of 231 leading economists ranks the relative performance of 25 recovery policies and identifies investment in natural capital as one of the highest scoring in terms of its beneficial impacts on both climate change and the economy.

We already know from internationally recognised, expert advice that natural capital investment has a crucial role to play in our fight against climate change. In Scotland, being transformative means investing, for example, in native woodland expansion, peatland restoration, urban greening and restoration of the marine environment.

The Scottish Government has already identified that investment in infrastructure will play a vital role in the recovery. It has already committed £2 bn for the Infrastructure Investment Plan, which the Infrastructure Commission has already advised should include green and blue infrastructure – such as wetlands, forests and rivers, alongside more traditional forms of infrastructure.

This investment must significantly enhance our natural infrastructure, backed by a more joined-up approach between biodiversity, planning, climate change and land use policies. Delivering this change needs investment in a new range of ‘green collar’ skills.

Funding will remain a significant challenge, as there will be severe pressure on public finances. We need to consider how to make better use of existing funding and the Committee on Climate Change has advised that we must also consider changes in tax policy. The Scottish National Investment Bank also has a key role to play.

We will also need new innovative ways to finance investment in our natural infrastructure. It is timely that later this month the Trust, in partnership with SEPA, will launch a new ‘Route Map to £1bn’, identifying new pathways for conservation finance.

If the Scottish Government follows our model, it could lead the way on delivering a green and truly transformative recovery.

Dougie Peedle, Head of Policy

Read our full briefing on a green and transformative recovery (pdf)

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Preface

Since the first transmission of coronavirus in the UK, events have continued to unfold at an unprecedented pace. The public health impacts are the tragedy at the heart of this …

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