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19 October 09

An outline of the Climate Change (Scotland) Act, what it means for business, and what further action we can expect from Government

by Gordon McCreath

The Climate Change (Scotland) Act 2009 received Royal Assent on 4 August. Scotland contributes only 0.2% of global greenhouse gases (GHGs), yet according to ministers, Scotland now leads the world with the “most ambitious and comprehensive piece of climate change legislation anywhere in the world”. What are the key points that your clients should be aware of in these difficult times?

The Act is largely an enabling one, setting out the framework for more detailed law that will follow, all of which will be made with the aim of achieving the targets in the Act. Note that many of the powers to make subordinate legislation are not discretionary, but oblige Scottish Ministers to make regulations, and report to the Parliament on progress.

Those targets and obligations are many. Holyrood, like Westminster, has committed itself to reduce GHGs by 80% by 2050, but it has also committed now (pending the global talks at Copenhagen in December) to achieving a world-leading interim target of 42% by 2020. Where Westminster uses five-year carbon budgets (allowing good and bad years within that period, as long as the five year target is met), Holyrood has committed to annual targets, reducing emissions on a year-on-year basis.

These targets will underpin the policy and actions of the Scottish Government and all Scottish public bodies. So you can expect all policy or regulatory decisions to include consideration of climate change issues. The recent Scottish budget, for instance, contained an assessment of the carbon impact of all of its proposed measures.

Onus on Government

In terms of specific policies, the Government must set out its policies for ensuring that land use contributes to the achievement of the targets in a Land Use Strategy in 2011. Detail is scarce on how this will interact with development planning. Scottish Ministers must also prepare plans for promoting energy efficiency and renewable heat within a year of the Act being brought into force.

On property, the Government must produce new law requiring assessment and improvement of the energy efficiency of buildings, further expanding the still new regime to require assessment and improvement by owners of the energy efficiency of their buildings. Ministers have confirmed that they will wait to see what effect voluntary measures have before using this provision – but note that they are obliged under the Act to make some kind of regulations, and they must report to Parliament on their intentions within a year.

Planning and building regulations and policy (including development plans) must be updated to ensure that all new buildings source a certain proportion of their energy from low and zero-carbon generation. Any new development will need to consider these matters in detail. Provision is also made for amendments to the Title Conditions (Scotland) Act 2003 for public bodies to create burdens when selling property, requiring specified climate change mitigation and adaptation standards in the development to follow.

The Act contains a variety of provisions on waste. Ministers can require persons yet to be specified (which may include businesses) to produce waste prevention and management plans, provide waste deposit and recycling facilities, and ensure all things procured or constructed by them contain a specified proportion of recycled material. They are given the power to set targets for reduction of packaging and establish deposit and return schemes.

Benefits to be won

The Act is not, however, all stick and no carrot. Provision is made to introduce lower categories of council tax and business rates for energy efficient business premises. Ministers must grant permitted development rights for air-source heat pumps and micro-wind turbines in domestic buildings, and micro-generation in non-domestic buildings. The Government would also point out that many of the measures required aim at greater efficiency in business practice and can actually improve the bottom line in the short or medium term. Of course, this ignores the complicated question of who actually receives these benefits. Careful consideration of how they should be allocated in contract will be required.

The stage, then, is set but the script still needs some work. There is still a lot of lawmaking to be done; indeed almost the entire Act still requires to be brought into force. Unsurprisingly, many are lobbying for the new measures to be introduced in a manner and at a time that best fosters economic recovery, but also allows the most to be made of the various business opportunities that the Act offers. It is this potential that leads the Scottish Government to talk of a green economic revival. When the new law is made, clients will need specialist advice to negotiate new onerous obligations but also make the most of the major opportunities to be part of Scotland’s new green economy.

 

 

Gordon McCreath is a partner in the Planning & Environment group of Pinsent Masons LLP
 
e: gordon.mccreath@pinsentmasons.com

 

 

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