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Natural capital (NC) refers to a concept or framing of the stocks and flows of services that nature provides to society. NC underpins all aspects of Human life and our economies through the delivery of ecosystem services (ES), often described as our ‘life support systems’. Biodiversity, as a key set of NC assets, is essential to enable the functional ability of ecosystems to provide services. However, NC is increasingly at risk from climate change, which is impacting biodiversity and ecosystem functions, jeopardising the supply of ES and reducing the potential for Nature-based Solutions (NBS) for mitigation and adaptation. The differentiated impacts of climate change on the many types of assets that make up Scotland’s Natural Capital is likely to determine how species, ecosystems and landscapes function and provide ES. Of particular concern is that the potential for ecosystems to mitigate climate change is reduced, or worse, change means assets increase greenhouse gas emissions.

To avoid this damaging feedback loop and improve our management and use of NC, we must increase our understanding of what the impacts of climate change are likely to be on NC assets, and how ES are affected. This is needed to improve planning and decision-making to protect and enhance ecosystems and maintain ES to continue supporting societal economic and well-being development. Detailed information is needed to help realise the potential for NC to enable Scotland to achieve net-zero emissions with the help of NBS.

The Scottish Government (SG) wants to increase the use of natural capital (NC) to bring more economic and social benefits. This goal is included in policies like the Land Use Strategy (2021) and Scotland's Forestry Strategy (2019). Climate change and biodiversity crises are leading to changes in economic priorities, with NC at the centre of a green recovery. The Dasgupta Report stated there is a lack of understanding of the value of nature, causing overuse of natural resources. The report suggests using NC accounting to create a more accurate measure of economic progress, one that takes into account the benefits of investing in natural assets.

Scotland is also putting a lot of focus on conservation finance, including the goal to invest £1 billion in nature-based solutions. This is part of the plan to reduce carbon emissions, improve resilience to climate change, and bring economic and social benefits to people and businesses. SG's policies aim to build strong communities, fight social exclusion, and promote healthy lifestyles, and NC valuation can help make decisions about resource use and management.

NC accounting provides valuable information for decision making and policy appraisal. It can estimate the contribution of ecosystem services (ES) to income and well-being, provide evidence of the benefits of ES, and guide decisions about payments for ES. Valuation can also help resolve conflicts between different interests and guide decisions to prevent damages that harm society.

Scotland has a variety of NC measurement tools and programs, including Scottish NC Accounts and the Asset Index, which provide a high-level view of the value and state of NC. The NC Pilot Program is a series of projects to test NC accounting methods and approaches to inform SG's policies. The Regional Land Use Partnerships, which involve government, communities, landowners, and other stakeholders, aim to facilitate NC-led collaborations at the regional level. However, NC approaches can face challenges from conflicting values among different groups of stakeholders. Currently, NC is seen as the value of the expected future flows of ES, considering the history of NC use or extraction, which can sometimes lead to conflicts between policies targeting different ES.

Natural capital (NC) refers to a concept or framing, with a focus on the stocks and flows of services that nature provides to society, and specific datasets. This concept has seen growing attention over the last decade and improving the data, as it is hoped, may assist in greening decision-making, in various sectors and venues, ranging from policy through financial investors, to farm level.

Scotland is a pioneer in adopting natural capital: a Scottish Government Natural Capital Policy team is working to embed Natural Capital into policy processes, framed around the Four Capitals approach; whilst multiple initiatives within NatureScot’s Natural Capital Pilot Programme (NCAPP) explore how to work with it with different groups and levels. Other notable initiatives directly relevant to natural capital include SEPA’s One Planet Choices initiative, which uses integrated capital assessments. The general goal of all such initiatives – and that this project seeks to both learn from and inform – is to routinely embed consideration of natural capital across sectors, policies and levels.

Natural capital is not a single, simple or easy-actionable piece of information. It has multiple and contingent versions and interpretations; will not be the only form of knowledge used in interpretation; furthermore, interacts with interests and institutional structures when influencing decision-making processes. These interacting factors often tend to inhibit change. Achieving transformation in support of sustainability is thus an urgent challenge but also notoriously difficult. Identifying levers of change is vital to ensure future research and practice efforts are most appropriately and effectively focused. There is a need to critically appraise how and when natural capital can support change for sustainability.

Poor air quality continues to harm public health and the natural environment in Scotland. Progress in improving air quality is both uncertain (due to an inadequate evidence base) and slow (due partly to uncertainty about the efficacy, cost, and consequences of improvement measures). Studies suggest that biomass burning makes a very significant contribution to concentrations of particular matter (PM) in the air, which can lead to serious health problems. Particulates are classified according to size. The UK is currently focused on measuring the fractions of PM where particles are less than 10 micrometres in diameter (PM₁₀) and less than 2.5 micrometres in diameter (PM_2.5) based on the latest evidence on the effects of PM on health. Even in a smoke-controlled area like London, 10% of the winter PM₁₀ has been attributed to wood smoke.

The contribution to PM_2.5 is larger and can exceed that from tailpipe emissions. Air pollution, especially PM_2.5, is highly correlated with various adverse health impacts. Particulates contribute to climate change, for example: a) emission savings due to the replacement of fossil fuels, b) the indirect effect of black carbon emitted from fossil fuels, and c) variable embodied carbon in imported biofuels used in Scotland.

Comparatively little is known for the Scottish context, where solid fuel combustion is used both as a traditional heat source, as well as increasingly as a renewable heat source, encouraged by policies such as the Renewable Heat Incentive, Feed-in Tariffs, and the Merton rule for on-site renewable heating for new builds. The only measurement evidence for the proportion of PM_2.5 from biomass burning in Scotland comes from the UK’s black carbon network, from which a wood-burning proxy can be derived as brown carbon from aethalometer measurements. Winter contributions of wood smoke to total PM₁₀ ranged between 3-6% at background sites (Auchencorth) to 6-8% at urban sites (Edinburgh and Glasgow). The relative contribution to PM_2.5 could not be established using older data but is likely to be significantly larger. No information currently exists for populated regions outside of smoke-controlled areas (for example, rural village settings) where solid fuel use likely lies above the UK average. For example, Scotland, making up 8.2% of the UK population accounts for 30% of the UK’s domestic Renewable Heat Incentive biomass installations.

Biodiversity loss is the result of human activity and the overuse of natural capital. The Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) recognises this as the main driver of the loss of biodiversity and decline in ecosystem service supply. However, the IPBES categorises it as an indirect driver of biodiversity loss as it acts through five direct drivers of loss: land use change, climate change, pollution, invasive species and direct exploitation. These drivers have been shown to have a wide-scale impact on biodiversity.

Agriculture is a significant contributor to the global decline in biodiversity, directly through land use change and environmental impacts but also indirectly through climate change. In the arable sector, neither alternative approaches to conventional agriculture nor legislation has proved effective in mitigating these adverse effects. Much has been written about insect declines, but the evidence is contested and is generally poorly linked to explanatory drivers. Aphids are a widespread and often abundant component of insect communities. Due to their biology and life cycle, they provide an excellent indicator of local environmental conditions.

One of the biggest predicted climatic drivers of change for Scotland is drought. There is a particular urgency in understanding the responses of forest systems given the decadal periods required for the growth of trees to maturity; trees established now will likely experience significant climate changes as they grow to maturity. This is a particularly important research need for a species such as Scots pine, with its wide genetic variability even within its Scottish native populations. 

Salmon populations are also in decline, with climate and land use change identified as potential drivers. However, pollution and in particular exposure to chemical contaminants may be contributing to this decline. Although many of these chemicals may be present in waters at sub-lethal concentrations. Endocrine Disrupting Compounds alter hormone systems and affect reproductive development and function in aquatic animals (such as salmon), with consequent impacts at the population level.

Another key global driver of biodiversity loss is the invasion of non-native species. They can seriously impact individual species and have ecosystem-level consequences. Current risk assessment approaches to invasive non-native species do not allow generic assessments to be developed, nor consider the wider socioeconomic aspects of invasive non-native species. Risk assessments are currently done at the level of an individual plant pest or pathogen.

The agriculture sector is an important source of greenhouse gas (GHG) emissions and has a key role to play in helping to reduce net GHG emissions by sequestering carbon into the soil and vegetation. However, progress in achieving emission reductions in this sector has been slow. The climate change plan 2018-2032 requires the agriculture sector to achieve net zero emissions by 2045 necessitating a fundamental transformation of land use to deliver a low carbon, holistic, sustainable integrated food production systems. This needs widespread adoption of low emission farming practices. The organic carbon content of soils and GHG emissions from the agricultural sector cannot be easily measured, which is a key barrier for implementing programmes to achieve NetZero. There is a need for credible and reliable measurement, monitoring, reporting and verification platforms, both for national reporting, emissions trading and to track progress towards Net Zero.

Rural land use occupies a pivotal position in some of the major debates about Scotland’s future. It shapes our landscape, contributes to greenhouse gas emissions and biodiversity loss, yet offers significant opportunities to address these ‘emergencies’ through new management approaches. Decisions are influenced by and need to balance, a myriad of public and private sector drivers and landowner objectives. As such, the sphere of influence on rural land use crosses over multiple arenas of government activity.

Sustainable land use is vital for underpinning Scotland’s vitally important food and drink and tourism sectors, and as a resource base for economic development. The foundational role of land use means that the small headline economic contributions mask its role in underpinning sustainable and resilient rural economies and communities.

Scotland’s land use sector faces challenges over the next ten to twenty years in contributing to legally binding climate change targets. Scotland’s challenges and opportunities in land use are being addressed through the adoption of more integrated and cross-sectoral approaches to rural land use, including the creation of Rural Land Use Partnerships, and a greater focus on biodiversity and natural capital outcomes. The response and effectiveness of policy and management changes will vary spatially reflecting socio-economic and environmental conditions creating the need to better understand these spatial patterns and configure policy accordingly.

Key policy drivers

Scotland’s Green Recovery, Environment Strategy, Just Transition and NetZero are the headline policy objectives, that fit under Scotland’s commitment to the Wellbeing Economy. Scotland’s Climate Change Plan (CCP) defines the specific policies and proposals for measures to achieve greenhouse gas emissions reductions in the Land Use Land Use Change Forestry sector, whilst the Scottish Climate Change Adaptation Programme considers how to manage existing effects.

Scotland’s Land Use Strategy (LUS) sets out a long-term vision for sustainable land use and the range of policies that affect Scotland land, including the Regional Land Use Partnerships and their Frameworks.  The post-2024 Agricultural Support policies and developments in green finance will inform the pace, scale, and type of land use change. Important policy windows 2022-2027 include proposed Agriculture and Land Reform Bills, the next CCP, a refreshed LUS and the integration of the Biodiversity Strategy and River Basin Management Plans (2021-2027) with Net Zero will be key.

Scotland has ambitious targets to achieve net zero carbon emissions by 2045. As part of this, the Scottish Government is working towards a suite of targets tackling waste generation and disposal by 2025, with a longer-term vision to move towards a circular economy for the benefit of the environment, the economy, and communities.

Circular economy principles involve a transition from a linear ‘take, make and dispose’ model of consumption to a more circular model which emphasises material flows, recovery of resources and components, and valorisation of waste products. In the circular economy, our approach to consumption would need to be characterised by new behaviours (of individuals, households and businesses) focusing on reducing the volumes of resources consumed, by instead reusing items, repairing instead of replacing items, refurbishing or remanufacturing to create new products and recycling what remains.

Moving towards a circular economy requires a broad cultural shift in how consumers and businesses think about and act concerning the consumption and disposal of materials and products. This requires more strategic evidence to support policymakers in promoting behaviour change, the development of new business and lifestyle models, and a further understanding of the wider workforce skills that will be necessary to support the circular economy transition.

Scotland has ambitious targets to achieve net zero carbon emissions by 2045. As part of this, the Scottish Government is working towards a suite of targets tackling waste generation and disposal by 2025, with a longer-term vision to move towards a circular economy benefiting the environment, the economy, and communities.

Circular economy principles involve a transition from a linear ‘take, make and dispose of’ model of consumption to a more circular model which emphasises material flows, recovery of resources and components, and valorisation of waste products. In the circular economy, our approach to consumption will require new behaviours (of individuals households and businesses) focusing on reducing the volumes of resources consumed, reusing items, repairing instead of replacing items, refurbishing, and remanufacturing to create new products, and recycling what remains.

The transition to a more circular economy necessitates a systemic way of thinking and acting that interconnects people and communities, industries and infrastructure, and institutional and policy governance. However, before a transition can take place, a clearer understanding of the willingness and readiness of people and places, infrastructure, and institutions, to advance on the path is required.

Increasing use of outdoor spaces is one way the Scottish Government measures the prosperity and well-being of its citizens. Encouraging, managing, and investing in outdoor recreation has cross-sectoral policy significance relating to health, planning, environment, education, and tourism. There are the ‘Our Natural Health Service’ programme and ‘green and nature prescription’ initiatives which aim to integrate the outdoors as a nature-based solution for public health challenges. Policymakers, practitioners, and scholars are increasingly recognising the need to cultivate conditions for a reciprocal relationship between people and the environment, one that nurtures the human community and integrates care for, and responsible access to, nature by people. Greenspace quality can also perform a civic role by encouraging people outdoors which can bring financial benefits through contributions to business.

Childhood experiences shape participation in outdoor recreation and environmental stewardship behaviour. Nature engagement is a learned behaviour which highlights the influence of role models and a need to understand early life-course (dis)engagement moments and the development of associated capabilities. Our previous work has identified key transition points where nature engagement changes, with place and gender as contributing factors. There is a ‘gender gap’ in the use of the outdoors; parks and recreational areas are used differently (and frequently less often) by girls than boys, and emerging demand among policy and practice is to understand the behaviour toward, and experience of, nature by teenagers.

Research on the benefits of greenspace has identified quality as of more importance than quantity. This identifies a key gap in the robust analysis of the costs and benefits of greenspace investment. Despite ongoing interest in the characterisation of spatial qualities of greenspaces, definitions and indicators of environmental quality are seldom uniform. With increasing emphasis on the multi-functionality of these spaces, there is also a need to further investigate user functionality, contribution to biodiversity conservation, public health, and mitigation of climate change effects. It is also important to bring together different knowledge from across sectors for novel and transformative gain.