Climate Horizon 2040 – Report

Event date: 4 February 2025

DOI: http://dx.doi.org/10.7488/era/5747

Summary of all sessions from the conference by graphic recorder Eddy Phillips. For a high-resolution version click here.

Aims and highlights

With the next Scottish Government Climate Change Plan due to cover the period to 2040, Scotland is at a critical point for climate action to reach net zero and build climate resilience. The aim of the Climate Horizon 2040 Conference was to generate ideas and insights on emerging research and developments to inform realistic and achievable climate policy in the 2030s and 2040s.

Nearly 170 delegates signed up for the event. They included a mix of experts from academia, business, the third sector and the public sector. The conference was an opportunity for them to connect with each other and take inspiration from the sessions for their work. As a delegate said after the conference: “Networking was really good – and the interactivity of the sessions made it feel more engaging and rewarding”.

The event was very popular – ClimateXChange received a total of 36 proposals and had to whittle them down to 7 sessions. Sessions discussed public perceptions of climate change and action, mitigation and adaptation, the potential role of AI, carbon pricing policies, financing place-based home retrofit, land use scenarios and designing cities.

For the final session, delegates sat in groups aiming to answer questions about strategies that could help mobilise climate action in relation to market mechanisms, industry, behaviours, finance and investment, and regulation.

The conference highlighted the urgency of embedding adaptation into Scotland’s net zero strategy, integrating technological and financial innovations while ensuring a just transition. The roundtable discussions produced key recommendations including:

• Strengthening policy alignment of mitigation and adaptation measures
• Scaling up finance mechanisms for public and private climate action
• Investing in resilience
• Enhancing public engagement to drive behavioural change
• Leveraging innovation
• Collaborating across sectors and organisations
• Learning from EU countries

This report summarises the key issues raised and discussed at the conference, the major challenges expected and big things on the horizon. The ClimateXChange podcast features a summary of the conference.

Main issues discussed

1. Future-proofing climate action: Integrating mitigation and adaptation

Led by Sustainable Scotland Network adaptation sub-committee

The synergies between mitigation and adaptation are discussed frequently, yet, mitigation and adaptation efforts are often still considered separately. This is problematic not only because both are necessary to address climate change, but also because mitigation measures can limit adaptation options or even create new challenges for adaptation, and vice versa.

For example, if a low-carbon, sustainable new build is located on a flood-plain or is not adequately insulated and ventilated to deal with increased heat events, then costly modifications or maintenance will need to be completed. This can lead to unnecessary, additional greenhouse gas emissions and costs throughout the building’s lifetime.

This panel discussion with researchers and practitioners in the public sector discussed how they have successfully integrated mitigation and adaptation and the challenges they faced in doing so.

Conversations highlighted that despite efforts to reduce emissions, continued adaptation is essential due to climate change.

In particular, the panel discussed the value of adapting strategies to prevent worsening of public health and ensure benefits from land use. While there is some political resistance and planning uncertainties, panellists gave successful local examples that demonstrated practical integration of adaptation measures.

They also highlighted that transformative changes and improved communication would help align public understanding and actions with increasingly urgent climate realities.

Key points from the discussion:

• Why do we need to future proof climate action? Even if we meet net zero goals, the globe will continue to warm so we need to continue to adapt. Climate change adaptation must be embedded in mitigation strategies to build resilience.
• Uncertainty remains a key challenge in integrating adaptation into policy.
• Land use is responsible for 40% of Scotland’s net emissions. Land must be managed for multiple benefits and guard against multiple risks such as biodiversity, flood prevention, carbon sequestration – this is very different from the historical status quo.
• Some local governments show political resistance to adaptation, yet they are already implementing practical measures eg adaptation measures in net zero social housing.
• The concept of “climate-resilient net zero” must be central to planning, avoiding the carbon costs of rebuilding after climate disasters.
• “Climate is a health emergency as well as a planetary emergency”. It is important to plan our mitigation measures with climate impacts in mind so as not to exacerbate health impacts. For example, active and public transport is a win-win-win for mitigation, adaptation and health.
• Regardless of taking the approaches of incremental or transformative adaptation, we need to be in control of the change rather than wait for impacts.

2. AI for energy justice

Led by Professor Aristides Kiprakis, University of Edinburgh

Artificial Intelligence (AI) has the potential to create a system that is not only more resilient, efficient and sustainable, but also more equitable and inclusive. However, there are challenges associated with AI. Making AI accessible to all citizens, including those in fuel poverty, requires careful consideration, so that no one is left behind.

In this session, experts and stakeholders on AI, social science, energy systems and energy policy shared their views on how to tackle those challenges.

Discussions centred on AI’s potential to tackle fuel poverty and enhance energy distribution efficacy. Panellists highlighted that using data from AI’s capabilities in grid monitoring and behaviour analysis could help optimise energy use and address fuel poverty.

However, they also discussed ethical concerns related to integrating AI, such as privacy in healthcare and biases in algorithms. Discussions acknowledged the potential of AI to improve energy efficiency through smarter infrastructure and demand-side management, yet scepticism remains about AI’s role in overcoming fundamental societal inequalities in energy access.

Highlights from the session included:

• The first step is to use AI to use existing infrastructure more flexibly and smartly. For instance, AI could help monitor household energy needs, as Scotland faces growing fuel poverty (31% of households).
• AI could help save on capital investments in new infrastructure.
• AI could help optimise energy systems, predict grid failures and improve efficiency, but it must be applied equitably. To this end, the role of AI in energy systems should prioritise energy distribution over generation, ensuring equitable access.
• Challenges include high energy use in AI models and concerns about data privacy and embedded bias.
• Innovative solutions, such as using data centres to heat homes, are already being piloted in Edinburgh.

3. Carbon pricing policies

Led by Dr Vera Eory and Professor Klaus Glenk, Scotland’s Rural College

According to research into how farmers in Scotland view carbon schemes and how scheme design preferences affect intentions to uptake, there is considerable interest in carbon schemes if certain conditions are met. However, there is much variation in farmers’ preferences for contractual obligations, suggesting that a careful exploration before implementation could improve participation.

This session considered the wider aspects of carbon pricing policies in Scotland, especially in agriculture and other four sectors not included in the UK Emission Trading Scheme. The discussion included the role of carbon markets currently and in the short- and medium-term.

Highlights from the session included:

• Discussions explored carbon pricing mechanisms, including Emissions Trading Schemes (ETS), taxation and market-based incentives.
• Farmers and land managers expressed concerns about how carbon pricing might impact agriculture.
• There is a need for blended finance approaches that combine public and private investment.

4. Financing place-based home retrofit

Led by Dr Ian Cochran, Changeworks

Place is an important part of the Scottish policy approach. “Place-based” is increasingly widespread in describing how cross-sector decarbonisation can offer opportunities for economies of scale, social and economic benefits as well as combining the multiple interventions needed in targeted zones at once.

The session aimed to provide an understanding of what we need to get right to bring life to place-based to provide important insights for policy. Given fiscal constraints across the public sector, both Scottish and UK government have expressed interest in exploring the financial benefits.

The session discussed what would good place-based action look like in 2040 and how to take action from today for 2040. Highlights from the session included:

• Climate finance must shift from extractive models to regenerative investments that retain wealth locally.
• Community-led energy and retrofit projects require accessible funding mechanisms and streamlined processes.
• Case studies highlighted the need for scalable and replicable funding models to support neighbourhood-level transitions to net zero.
• Long-term investment strategies must prioritise system-wide change rather than isolated pilot projects.

5. Building net zero land use scenarios with Lego

By Anna Sellers, LUNZ Hub

To get delegates energised after lunch, they had a choice of two interactive sessions. In this session, they were asked to play an interactive game using Lego.

Delegates built net-zero land use scenarios and explored trade-offs between competing interests and priorities for land use in coming decades. The following figure summarises scoring across actions and variability across the groups.

The session got delegates considering that the net zero target extends beyond reducing carbon emissions to include biodiversity, water management and flood prevention.

Participants highlighted the complexity of behaviour change and criticised the focus on biomass and mono-culture tree planting. Furthermore, they discussed actions such as reducing livestock numbers both as challenges requiring behaviour change to prevent increased meat imports, and as opportunities to enable broader environmental benefits. Discussions highlighted nature such as peatlands and forests as more than a carbon sink, and the importance of balancing interventions between nature-based and farming practices.

Highlights from the session included:

• Peatland restoration, tree planting and habitat creation emerged as priority land-use strategies.
• Reducing ruminant livestock herds was debated, with concerns over offshoring emissions.
• Participants emphasised the need for evidence-based approaches to increasing soil carbon and the role of agroforestry in helping to achieve Scotland’s net zero goals.

A complete report of the session is on the LUNZ Hub website.

6. Co-designing Glasgow’s future net zero hospitals

Led by Professor Paul Rodgers, University of Strathclyde

A parallel interactive session explored how NHS Scotland’s hospitals in Glasgow can transition to net zero by 2040. As key public institutions, hospitals can serve as models for broader net zero adoption. Groups were asked to design what Scotland’s net zero health care ecosystem could look like in 2040.

Participants took part in an interactive exercise with maps and Plasticine to explore how the city’s health and social care infrastructure can become sustainable while maintaining high care standards. The focus was on sustainable energy, green spaces, transport and waste management infrastructures.

The session showed how net zero is an opportunity to reimagine the way a city works. One of the examples discussed was that of re-purposed buildings such as disused churches that could be used for drop-in health centres, improving access and connectivity.

Highlights from the session included:

• NHS infrastructure and transport networks can be decarbonised and made climate resilient.
• Waste heat from NHS facilities could be repurposed to heat neighbouring communities.
• Local travel can be smoother and help achieve the health and environmental targets.
• Strategies for integrating sustainability into healthcare infrastructure were explored, including solar panels, heat networks and energy-efficient retrofits.

Reflections

The final session of the event was an opportunity for delegates to reflect on the discussions held throughout the day.

They could share their thoughts on research needs and recommendations for the Scottish Government on market mechanisms, industry, behaviours, finance and investment and regulation, while also discussing what more Scotland can do to reach net zero.

How can market mechanisms and incentives be used to deliver emissions reductions? 

This discussion explored various aspects of carbon market operations, particularly the Emissions Trading System (ETS). Key points included the effectiveness of carbon pricing and the allocation of free allowances, which has proven successful in sectors like energy that received no free allowances.

The debate extended to the potential inclusion of household fuel and agriculture in the ETS, with suggestions for different ETS setups reflecting specific industry needs and minimising significant economic impacts on certain sectors.

Delegates also discussed transport’s integration into ETS by 2029 and shipping by 2026, along with dynamic pricing models like road pricing during peak times.The conversation touched on the broader political and economic contexts, such as subsidies in aviation fuel and the challenges of a just transition, especially relating to older and electric vehicles. Discussions around financing mechanisms like zero-interest loans for second-hand EVs and grants for heat pumps, highlighted the need for financial and carbon literacy to navigate these incentives effectively.

Participants noted that aligning financial instruments with emission reduction targets is complex. They emphasised the necessity of clear, targeted policies to facilitate a transition to low-carbon alternatives.

The discussion also explored market mechanisms for emissions reduction, highlighting their impact on socio-economic disparities, especially for lower-income groups in Scotland and inter-generational justice in Wales.

Which industries and sectors are in a position to lead on the transformation to net zero, and how do we encourage that leadership?

Given their contribution to greenhouse gas emissions, the session identified oil and gas, construction, transport, electricity and textiles as key sectors that could lead the transformation to net zero. Delegates highlighted the potential role of creative industries in making change through creativity, design and innovation.

Building on existing leadership and expertise, particularly in energy and construction, is crucial. Encouraging leadership involves harnessing the skills of individuals in longstanding industries to lead newer, sustainable sectors.

Delegates also highlighted the need for regulatory support, improved training for retrofit assessors and innovative financial products to encourage retrofitting.

They recommended that policymakers create a level playing field through regulation, set consumption-based targets and support crucial network and SME infrastructure developments for a smoother transition to net zero.

What strategies can help shift behaviours and mobilise climate action by major emitters and the wider public/communities?  

The discussion emphasised creating an environment where eco-friendly choices are the most appealing and accessible. Learning from the Covid-19 pandemic, the strategy involves a mix of incentives and penalties. Participants suggested financial incentives for individuals and strict regulations for major emitters. Additionally, participants highlighted the need for a social and wellbeing economy, addressing property ownership issues in Scotland.

Delegates suggested behaviour change tactics such as leveraging consumer power, promoting sustainable travel and localising decision-making. An emphasis on extensive collaboration, both domestically and internationally, is crucial for addressing large-scale emitters. Creative, long-term engagement supported by local authorities, combining technology, legislation and public information, is vital for encouraging widespread adoption of climate-positive behaviours.

The session advocated for both top-down and bottom-up approaches, stressing the importance of co-benefits linking climate actions to other community benefits, like health, to resonate more effectively with the public.

How can we mobilise finance and investment to fund effective climate action in Scotland, including securing public and private sector contributions?

It is crucial to make climate projects investible and de-risking investment. To attract both public and private sector funding, projects need a strong business case that demonstrates both financial returns and climate risk mitigation. There is a need for clearer evidence on risk profiles and investment benefits to increase investor confidence.

Blended finance approaches such as public-private partnerships can help de-risk projects, making them more attractive to investors.

With regard to policy and incentives to drive climate investment, delegates suggested that the Scottish Government could incentivise net zero outcomes rather than funding specific measures, allowing businesses to innovate in achieving climate goals. Government could explore a mix of policies to better align public and private sector investment. Delegates also highlighted that greater investment is needed in areas without a clear revenue mechanism, such as home insulation, where financial benefits are indirect but significant (eg reducing NHS costs from cold-related illnesses).

It is also important to shift investment and valuation approaches. The discussion highlighted the need to rethink how we value climate action, moving away from purely financial metrics and toward societal and environmental benefits. Pension funds and other institutional investors face challenges balancing financial returns with ethical and fiduciary responsibilities. Delegates suggested taking a whole-systems approach to understand policy interdependencies, such as transport and heating schemes, which can generate broader economic and social benefits.

Which regulatory or non-financial policy measures could have the biggest impact on reducing emissions in Scotland?

Key principles suggest that regulation should heavily target high emitters while facilitating grassroots and community initiatives. Delegates suggested taking an assertive approach, similar to France’s ban on oil-fired heating, for phasing out gas boilers.

Participants also suggested tightening regulations on environmental claims about products and services, akin to measures in France and Belgium. Additionally, regulating the embodied carbon in building constructions, a common practice in Nordic countries and soon to be implemented EU-wide from 2028, could further lower emissions.

Another proposal is to open up the energy market to allow peer-to-peer electricity sharing. Increasing the accountability of large landowners could also drive reductions in emissions.

Big things on the horizon

The conference highlighted aspects related to climate change action that are likely to become key policy priorities such as more resilient infrastructure, innovations, considerations for a just transition and climate finance.

1. The need for climate-resilient infrastructure

• Flooding and extreme weather events will continue to escalate, requiring adaptation in housing, transport and utilities.
• Infrastructure investment must consider long-term resilience rather than short-term cost savings.

2. Policy and regulatory innovations

• Moving towards a wellbeing economy means that carbon pricing and regulation align with climate justice goals.
• It’d be beneficial for new policies to focus on consumption-based emissions rather than just production-based metrics.

3. Just transition and equity considerations

• A just transition to net zero ensures that low-income communities are not disproportionately impacted.
• Energy pricing mechanisms should consider affordability while driving emissions reductions.
• Public engagement strategies can bridge the gap between early adopters of net zero technologies and those unable to afford the transition.

4. Expanding climate finance and investment

• Private investors need clearer risk assessments and investment benefits to scale up climate projects.
• Pension funds and institutional investors must balance financial returns with ethical responsibilities.
• A whole-systems approach can help integrate transport, heating and energy infrastructure into net zero planning.

5. Leveraging AI and digital solutions

• AI has the potential to enhance real-time climate action by optimising grid management and energy efficiency.
• However, digital solutions must be accessible and not exacerbate existing inequalities in energy access.
• Further research is needed to understand the long-term role of AI in achieving Scotland’s climate targets.

Conclusion and recommendations

The Climate Horizon 2040 Conference highlighted the urgency of embedding adaptation into Scotland’s net zero strategy, integrating technological and financial innovations while ensuring a just transition. Key recommendations include:

• Strengthening policy alignment: Ensure adaptation and mitigation policies are integrated to prevent unintended consequences.
• Scaling up finance mechanisms: Streamline funding for community-led climate action and incentivise private sector investment.
• Investing in resilience: Prioritise climate-proofing infrastructure to mitigate long-term risks.
• Enhancing public engagement: Develop clear, accessible communications to drive behavioural change and climate action.
• Leveraging innovation: Ensure AI and digital tools contribute to equitable and effective climate solutions.
• Collaborating across sectors and organisations: For instance, a coordinated plan with combined effort could help achieve a balance of pragmatism (especially with regard to cost) and politics (such as achieving public buy-in). This is at the core of accelerating climate action and achieving climate targets.
• Engaging with EU countries: Learning from other countries about measures that are are already being implemented.

DOI: http://dx.doi.org/10.7488/era/5747

© The University of Edinburgh, March 2025  

Prepared by ClimateXChange, The University of Edinburgh. All rights reserved. 

While every effort is made to ensure the information in this report is accurate, no legal responsibility is accepted for any errors, omissions or misleading statements. The views expressed represent those of the author(s), and do not necessarily represent those of the host institutions or funders.

ClimateXChange 
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