Scottish Government

2 Methodology

2.1 Data sources

Data has been collected for this work through a review of relevant literature and consultation with key stakeholders. The key literature in this area includes:

• Plans issued by Scottish and UK Government.
• Information on emissions and trends in emissions.
• Foresighting studies carried out for UK Government and internationally.
• International datasets, for example on energy efficiency and renewable policies.
• Studies on energy policy, e.g. relating to the use of biomass and hydrogen fuel cells.
• Specific sectoral studies, for example on housing and waste management, and
• The results of public attitude surveys.

A list of these studies is presented in Appendix 1.

Prominent stakeholders include representatives of the Scottish Government and its Agencies, and other bodies such as the Sustainable Development Commission and the Policy Studies Institute. A listing is provided in Appendix 2.

2.2 Sectors and options considered

The analysis has considered options for each of the following 8 sectors:

• Electricity generation
• Business and Industry
• Public
• Waste management
• Housing
• Land-use change and forestry
• Agriculture
• Transport ⁸

In the interest of reaching an 80% cut in emissions it is necessary to push current abatement policy (evolutionary change) and identify further, more radical measures (revolutionary change). Consideration is also given to cross-cutting policies and those that have an influence on other sectors. For example, switching from fossil fuel for vehicles will reduce the impact of other policies aimed at changing emissions from the transport sector.

Consideration is given to reduction of the three main greenhouse gases with emissions presented in terms of carbon dioxide equivalent (CO ₂ eq). Whilst policies to reduce carbon dioxide (CO ₂) emissions are considered for all sectors, the options for significant non-CO ₂GHG reduction focus on:

• Methane (CH ₄): energy supply, waste management, land-use change, agriculture.
• Nitrous Oxide (N ₂O): electricity generation; business and industry; agriculture, transport.

The other greenhouse gases account for 1.6% of total Scottish GHG emissions in 2005 on a CO ₂ equivalent basis, i.e. taking account of the differences in Global Warming Potential. These emissions are already being dealt with by European legislation e.g. the F Gas regulations. Hence they have not been considered further in this study.

When considering further options it is recognised that different circumstances will cause some policy options, in use elsewhere, to work better or worse in Scotland. For example:

• The location of power stations on the East coast of Scotland, along with the extensive oil and gas reservoirs offshore, creates a potential opportunity to exploit Carbon Capture and Storage.
• Scotland has some of the best resources in wave and tidal energy in Europe and the world ⁹. Hence policies that support their exploitation will be found in the relatively small number of countries with similar resources (e.g. Portugal, Canada, USA, Norway, Australia).
• In many European countries recycling rates are much higher than in Scotland and the residual waste provides heat and/or power. Hence there are opportunities to reduce GHG emissions from the transport and landfilling of waste, although the entire emissions impact of these measures will need to be taken into account, including local air quality impacts.

Direct extrapolation of experience elsewhere is thus not always appropriate. Particular consideration needs to be given to the policy levers that could be used to transform GHG emissions in Scotland - and how these can be used to implement new policy options. In the interests of efficiency it is important that the review of policy options should not preclude ideas that may require joint action by the Scottish and UK Governments.

2.3 Generation and assessment of policy options

The research methodology followed 3 steps;

• Option generation.
• Assessment of Impacts.
• Assessment of feasibility, affordability and public acceptability.

Option Generation

When considering the impacts of policy measures in the time frame up to 2050 there is considerable uncertainty over many of the key variables such as future development of carbon saving technologies and hence the role for policy options that may support these technologies. To cast the net as widely as possible the option generation commenced with a literature search and consultation with a small number of individuals in the Scotland, the UK and in Europe. The aims of the search was to base the generation of options on the widest possible set, with the options being appraised having been identified after considering all realistic alternatives. The search aimed to capture evolutionary options (development of existing measures) and revolutionary options (completely new measures with more profound impacts).

The policy options were identified for each of the eight key sectors in Scotland listed in Section 2.2.

For each possible policy option the rationale, classification of type of policy lever (investment, subsidy etc) was undertaken. The current trend in emissions in each of these sectors was assessed, based on the Scottish Greenhouse Gases Inventory published in May 2007 ¹⁰. The trend and the drivers behind the trend were used to derive a Business as Usual projection of emissions.

A wide range of policy options for all sectors and all GHGs has been generated drawing on the sources listed in Appendix 1 and other sources. For each policy, information is presented either in the summaries in Section 4 or in the Appendices. Initial emphasis has gone to describing:

• Effectiveness at reducing GHG emissions relative to the baseline defined for 2050.
• Costs and cost-effectiveness.
• Associated uncertainties.

To the extent possible, this has been performed drawing on published sources, though the nature of this work, with assessment out to 2050, has made it necessary in some areas to rely on the expert judgement of the project team and those we have consulted.

The study takes a high level approach to the definition of policy measures, i.e. the focus is on measures that will have a material and lasting impact. There will be many more specific policy measures with a finer level of granularity that will also make a contribution to the 2050 target. However, given that this study includes all sectors, the focus is necessarily on the larger opportunities.

Similarly there are many supporting policy measures that will play an important role, including information and advice, procurement and training. While these play an important practical role the focus of the analysis has been on the core policy measures.

Assessment of impacts

For each policy option an assessment of costs and effectiveness was undertaken. Given the uncertainties associated with assessing costs and impacts in 2050, this included expert judgement as well as the results of the literature review. This is particularly true for the revolutionary measures, where less published material is available. Given these constraints the aim was to indicate the 'likely' scale of each option rather than a precise estimate.

The assessment of impacts was undertaken at sector level, including a wide range of policy measures. These were then considered again as part of a cross sector assessment. The cost effectiveness and abatement potential of each policy measure was classified as High, Medium, Low or Very Low. From this the policy measures were grouped to help identify those measures with the best potential and to differentiate them from the progressively less attractive.

Some measures result in a step change in emissions (e.g. new power stations), some measures result in a gradual change in emissions (change to new vehicle technology) while some measures result in very slow changes in emissions (changes to buildings). Hence some policy changes made early in the timeframe may take many years to result in a significant impact on emissions.

The sector profiles in Section 4 consider policies in isolation from each other rather than the cumulative effects of combinations of policies for a particular sector. These options are then brought together in the cross-sectoral analysis section ( Section 5). Here account is taken of the fact that some measures are alternatives to others (e.g. carbon capture and storage or renewables) and some measures influence the impacts of others (e.g. heating efficiency improvements have less of an effect on emissions if buildings have already had their insulation improved).

Assessment of feasibility, affordability and public acceptability

As part of the assessment, the feasibility, affordability and public acceptability of each policy measure in each sector has been assessed. These are taken into account in the cross sector analysis of measures, where these factors are incorporated in the final assessment of abatement potential and cost effectiveness. In other words, if a measure has significant associated issues regarding feasibility and public acceptability, then the cost effectiveness assessment may be adjusted to reflect these wider issues. This assessment includes consideration of the policy levers that would be needed to implement each measure, which may include relevant EU, UK and Scottish powers. Some of the measures proposed will require state aids clearance. As a result the competency for decisions regarding some policy measures may lie between several of the key bodies.