Community Wealth Building & a Just Transition to Net Zero

The Scottish Government has set out bold ambitions to deliver a just transition to net zero emissions of all greenhouse gases by 2045, scale up Community Wealth Building, create a wellbeing economy, and deliver inclusive growth across Scotland. How Scotland’s land is owned, used and managed will play a key role in determining whether this vision is achieved.

Community Land Scotland is delighted to share the report Community Wealth Building and a Just Transition to Net Zero by Laurie Macfarlane and Miriam Brett. A short excerpt from the report is below.

In this paper we explore how the ownership and governance of land in Scotland needs to evolve if the Scottish Government is to deliver on its stated policy objectives. We begin by examining how the shift towards net zero is transforming Scotland’s rural land market, and find that the emerging value associated with carbon and natural capital is contributing to soaring demand for rural land in Scotland. This rising demand, together with high timber prices and subdued levels of supply, is putting significant upwards pressure on prices for all types of rural land. We also examine how future developments in carbon and other natural capital markets could impact Scotland’s land market. Although there remains a considerable degree of uncertainty surrounding prices in the voluntary carbon market, we find that as it stands there is a broad consensus that prices will increase over the coming decades. As well as generating potentially large financial rewards for landowners from the generation of carbon credits, it is likely that, in the absence of policy intervention, this will also put further upwards pressure on land values. This could be further fuelled by the emergence of new natural capital markets, which could create additional revenue streams for landowners in Scotland and therefore put further upwards pressure on land prices.

Given the expected growth of carbon offsetting and other natural capital markets in Scotland, a key question relates to how the value generated from these activities will be captured and distributed. Under Scotland’s existing legal framework, ownership of land confers the right to generate carbon credits and exploit natural capital opportunities – and to reap the associated financial rewards. As a result, the question of who owns land in Scotland will play a vital role in determining how the value associated with Scotland’s natural capital potential will be captured and distributed.

Over the past year there has been much debate over the rise of so-called ‘Green Lairds’ in Scotland. The term ‘Green Laird’ has no formal definition, however it is typically used to describe individual and corporate investors that have purchased land in Scotland with the stated intention of delivering some kind of environmental benefit, often alongside other goals. In practice however, there are a wide range of actors in Scotland’s land market that aim to deliver some kind of environmental benefit, operating with many different motivations and business models. In order to move beyond the high-level debate surrounding ‘Green Lairds’, we develop a framework for examining the range of different business models being deployed by environmentally-oriented landowners in Scotland, and explore their primary motivations and activities with reference to a number of case studies.

We then consider the extent to which different landowner business models align with the principles and objectives of Community Wealth Building. We find that community ownership delivers the strongest alignment with Community Wealth Building due to the fact that it is rooted in place; encourages local, broad-based ownership; has the potential to generate large local multipliers and minimise economic leakage; embeds collaborative approaches to decision making; and delivers inclusive, well paid jobs. Community ownership therefore provides an effective means of ensuring that wealth that is created in Scotland is retained and redirected back into local communities. In contrast, we find that absentee corporate and individual ownership delivers the weakest alignment with Community Wealth Building.

We argue that scaling up a Community Wealth Building approach to land reform can help deliver on a number of the Scottish Government’s policy objectives, including delivering a just transition to net zero, promoting a wellbeing economy, and tackling the cost of living crisis. In order to achieve this however, we argue that fundamental reforms to the ownership and governance of land in Scotland are required. Our key policy recommendations are summarised here.