Report on "Sustainable Development" Discussion Group
Host: Ross Finnie MSP, Minister for the Environment and Rural Affairs
Facilitator: Shonaig Macpherson CBE, Chairperson, Scottish Council for Development and Industry
Remit
The 'Sustainable Development' discussion session, arguably, underpinned all Business in the Parliament discussion groups. For example, it clearly related to the discussion sessions on skills or Scotland's infrastructure and also links into the discussion on Scottish competitiveness. For the sake of brevity however, the Scottish Executive and Scottish Parliament instructed the break-out group to focus on three key areas of resource efficiency: energy, water and business waste and discuss the challenges in each area.
The Discussion
Sustainable Development
At the top of the discussion was what was understood by the term sustainable development and what challenges lay in the key areas under discussion: waste, energy and water. Broadly speaking, it was suggested that improving resource efficiency; environmental policies in businesses; new markets for green products and technologies, and encouraging businesses' own staff were key challenges within a wider principle, which at its heart was simply about using scarce resources in an economically and environmentally responsible way.
The discussion group agreed that sustainable development contained a social equity/economic dimension as well as environmental one. Indeed, the goal of the sustainable development drive should be to become normal development - not an extra cost. In this context, the enablers of development, such as the planning system, building standards etc were considered to be very important.
In the wider context, the benefits of travelling by rail vs. car were outlined by the group, but the practical difficulties of enjoying these benefits were also highlighted - such as lack of train services in rural parts of Scotland, as well as cost and reliability. This led the discussion group to underline the importance of policies that take advantage of technology to provide innovative national and local transport and communications infrastructure, such as park and ride and video conferencing facilities.
There was also some appetite for more stringent approaches by the Scottish Executive. Comparative approaches in other countries such as Sweden and New Zealand were held up as examples where widespread sustainable development practice could be observed, often incorporating tough legislation and regulation. Given the rising price of oil, many in the group saw a need for more collaboration across government, looking at integrating transport, energy and waste strategies.
However, it was accepted that sustainable development had a challenge to confront the realities of societies that exist on the principles of personal independence, marketing freedom and financial liability - which in many cases do not fit with the more collective spirit of sustainable development. There is a need to develop, within businesses, an appreciation of a triple bottom line - financial, social, and environmental. There was an acknowledgment that the public, government and visitors to Scotland want to see businesses do more. With an equally keen desire, many businesses are currently engaging and many want to do more. The challenge therefore is for the government to create the conditions in which businesses of all shapes and sizes can positively engage in sustainable development practices.
Waste
Some businesses in the group commented that they were trying to lead by example but that the options for recycling were simply not present, or if they were the time and cost made them prohibitive, particularly for smaller businesses. This left many in the unenviable situation of land filling their waste; made even worse in a climate of reducing sites and rising costs. There was some concern that current targets were limited to domestic waste, excluding business waste, which often meant local authorities uplifting domestic waste but not business waste. This left many businesses, particularly small businesses in rural areas, with real problems planning for their own resource efficiency.
The reality is that many people in small businesses want to make a difference but simply do not know how to, or have the time to find out how. It was suggested that government needs to support delivery rather than just advise and that there should be some kind of strategic delivery service for SMEs to help them engage in these activities. There was also a brief discussion around more innovative policies which could encourage greater involvement i.e. through rates reductions to incentivise effort.
Government initiatives, such as Envirowise were very welcome, particularly the time saving benefits of having a resource efficiency audit undertaken and solutions tailor-made for businesses. But there was also a desire to see these activities rolled out on a greater scale. There was also some confusion regarding the number of different government initiatives underway e.g. Carbon Trust, WRAP and Envirowise, and how they operated together. Given the time constraints of those involved in running businesses, many would prefer a one-stop-shop for all their resource efficiency needs.
At the same time, some in the group suggested that this was a business opportunity. It was widely acknowledged that there were many companies involved in recycling business waste, although not all catered for small companies, particularly in rural areas. Those involved in the industry remarked on the fundamental reality which meant that only when there is a market can businesses make a profit from waste.
Energy
Scotland's energy mix
Leading on from the discussion regarding the challenges of reducing and recycling waste, the group turned to similar challenges with energy. At a more strategic level the necessity of maximising Scotland's ample mix of natural resources was discussed, as well as diversifying the energy mix with alternative technologies. Given projections by the DTi and the Scottish Executive in their respective Energy Review and Energy Study, most around the table were aware that left unchecked Scotland will need to import more of its energy needs, particularly gas, by 2015 - moving from being an energy exporter to importer. The implications of this shift were discussed, focussing on the increasing energy costs which have hit Scottish businesses - particularly those in the energy intensive industries.
In addition to rising energy costs, many businesses, particularly those engaged in energy intensive activities, already pay various carbon taxes through the Climate Change Levy and Emissions Trading Scheme. There was a call from those representing their industries for an understanding of the realities facing Scottish manufacturers before a drive to further green regulation and tax was initiated. UK electricity prices are currently the highest in Europe and in the past year UK gas has been the world's most volatile commodity. In one particular case the group heard of a manufacturer where the owners transferred winter production to Scandinavia because energy costs were 40 per cent more expensive in Scotland. The feeling was that the Scottish Executive needs to look at the whole picture when considering the drive towards green regulation and the cost on business.
This discussion led to a general agreement that the existing base-load generation in Scotland must continue to form the backbone of Scotland's energy mix - to offer some form of protection against unacceptable levels of energy dependency from abroad. Coal, particularly using clean coal technology, must have a role to play, although any impact on the landscape would have to be mitigated. Many around the table also agreed that existing and perhaps new nuclear generating capacity would need to form part of the mix if security of energy supply was to be maintained in the near term.
Renewables
In terms of renewables, all were in agreement that these technologies offered Scotland a unique chance to develop sustainability energy supplies, now and increasingly in the future. However, for many in the renewables industry how the industry moves forward very much depends on how the debate is conducted. Whilst there was a general welcome for politicians talking up new technologies, there was also concern that the same politicians seemed to be unable to do so without putting the boot into existing technologies. Tinkering with the mechanisms which have supported the growth of the renewables industry, albeit for aims, raised concerns from those involved in the more mature renewable technologies, such as onshore wind. The fear is that too much change undermines investor confidence.
Infrastructure was another issue raise by many in the renewables industry. Planning consents for development and connections to the grid were seen as the real priority areas for action if ministers' ambitions for the amount of electricity generated from this industry are to be realised. At present most of Scotland's renewable energy capacity is tied up in the planning and consents regimes, with some schemes unable to be connection until well into the next decade. This was simply not good enough for many around the table and the concerns applied as much to those involved in the development younger technologies, such as marine, as those involved in the more mature technologies, such as onshore wind. Planning changes were discussed and most were cautiously optimistic that these changes might help enable future development more efficiently. For the developing marine industry, capital and revenue funding were both essential and those representing the industry welcomed the Scottish Executive's commitments on both fronts. Finally, there was an observation that Ofgem currently does not look at the costs of unsustainability i.e. that too much weight goes on discouraging transmission losses.
Energy efficiency
Climate change also linked into the debate on energy as it was seen as an economic issue - particularly in light of the conclusions of the Stern Report and the Tyndall Report, in which a four to ten window was suggested before a 'tipping point' is reached. There was a concern that government, businesses and the public had simply not grasped the concept of energy efficiency and that a sudden drive towards green taxes would affect the disadvantaged the most. It was agreed that the outcomes of successive reports made it clear that there is not a lot of time for technical fixes but that everyone and every business can all get involved in resource efficiency right now. This was effectively described as one big communications challenge, in which the aim should be to make waste in any form socially unacceptable in the same way that as smoking or drink driving.
There was some evidence of the beginnings of the cultural shift needed to address some of the issues. Businesses tend to look at three year payback periods, but there was some evidence that in certain areas businesses were moving to longer periods for environmental projects, e.g. anaerobic digestion in distilleries. It was agreed that undertakings such as the Stern report would change the mind set of many, but there was an appreciation that it is a slow process with many technologies just emerging.
The power of inertia was also discussed. Businesses in Scotland need support to change, including appropriate incentives and proportionate penalties in the policies designed to change behaviour. On government funded advisory bodies, such as the Carbon Trust, there was a general welcome for consultancy advice. However, there was also an observation that in many cases they lack specialist understanding on the technologies, and that free advice isn't always valued as highly. Some around the table talked of a need for qualified specialists who could provide advice. In terms of the insulation problems inherent in Scotland's housing stock, the Energy Performance of Buildings Directive certification was seen as providing key role. With 13000 new social homes being built over the next 10 years, Communities Scotland was also a key player but there was surprise that there was nothing in the grant conditions on building standards for this large development.
Finally, it was agreed that in many respects a small nation such as Scotland, which produces just 0.02 per cent of global carbon emissions can make greatest contribution to tackling climate change by developing and exporting the technology to achieve this, rather than regulating its wealth creating businesses out of the global marketplace. If businesses face unsustainable costs and unnecessary regulatory practices, production will simply be transferred to countries where the social and environmental cost of production is wholly disregarded. In terms of influencing other countries' behaviour, the EU must to offer sticks as well as carrots to developing economies. Tariffs, properly reflecting the full cost of goods from these countries i.e. the environmental and social costs, should be considered.
Water
The advantages of a twin track water system for consumers and industry was discussed. It was agreed that industry does not need high-class potable water, but could use grey water instead. However, it was felt that the creation of a national twin track water system would be impractical. It was pointed out that water is a more local utility than energy and suggested that one way of overcoming these capacity problems would be for the water industry and businesses to develop a more local system of grey water.
The development constraints for housing and industry due to difficulties in connecting them to water and sewage treatment was discussed. It was highlighted that sewerage connections are often the bind for housing developments, and agreed that there is a need for planners and developers working together to fund new capacity.
It was mentioned that there is a social equity dimension to the provision of water. Water services should not be marginalised as an environmental or health issue. There is also a strong economic and social development aspect.
Conclusion
The Minister for the Environment and Rural Affair had the final word. In his summation of the debate he saw a need for the Scottish Executive to do more to disseminate the messages that are in its Sustainable Development Strategy: Choosing our Future. The Minister mentioned the TV campaign that was part of this strategy. The minister also talked of the optimism saw through engagement with the next generation and greatly welcomed the enthusiasm in Scotland for eco-schools. Sustainable Development is about three issues: society, the economy and the environment. In that structure, more partnership between government, business and academia is clearly needed.
Niall Davidson
Policy Analyst
The Scottish Council for Development and Industry