Economists have warned that Scotland's push towards net zero could place an additional burden of £700million a year on its public finances until 2050.
According to the Scottish Fiscal Commission (SFC), the independent forecaster, suggested climate goals will require “major investment,” most of which would likely need to be diverted from other parts of the budget.
It estimated 26% more spending in devolved areas, equivalent to more than £17billion, would be needed per person in Scotland to mitigate climate change and reduce emissions than for the rest of the UK.
While investment needs will change between now and 2050, the average annual cost is projected to be £700million.
This extra expense is driven largely by Scotland’s ambitious plans to upgrade its housing stock. The report notes that Scotland is generally colder than the rest of the UK, meaning homes require more investment to meet energy efficiency standards.
The UK’s Climate Change Committee (CCC), the independent advisory body, has assumed that a larger share of the cost of new heating systems and energy-efficiency measures for social housing will fall to public funding.
Agreeing with that analysis, the SFC said: “Public spending required in devolved areas is expected to be 26 per cent more per person in Scotland than in the rest of the UK between 2026 and 2050.
“The funding received from the UK government would not be sufficient to cover the total costs of mitigation, and additional funding would have to be found from elsewhere in the budget.”
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