Contact
Improving the market benefits for lower-carbon industrial production in Scotland
This report investigates the potential for demand-side policy interventions to incentivise the decarbonisation of Scotland’s energy-intensive industries (EIIs). EIIs are a significant contributor to both Scotland’s economy and its environmental footprint, accounting for approximately 4% of economic output and 15% of greenhouse gas (GHG) emissions. Reducing emissions from these sectors will be a necessary condition for Scotland to meet its decarbonisation objectives.
The report provides an overview of the evidence relating to the design of demand-side policies to influence EII emissions – measures that influence the purchasing decisions of public sector organisations, private businesses and consumers to reduce their demand for emissions-intensive products. It includes two in-depth case studies of emissions measurement and benchmarking – the cement and whisky sectors.
The research aims to:
- identify and categorise the products currently manufactured by Scottish EIIs;
- understand the size and nature of these markets;
- summarise the main influences governing buyer decision-making in these markets; and
- identify relevant and impactful demand-side policy interventions for Scotland.
In doing so, it addresses four broad policy questions:
- What demand-side policies do other jurisdictions use to decarbonise EIIs?
- Which of these types of policies could be implemented in Scotland?
- How effectively could these policies influence purchasing decisions?
- Which EII sectors and products should demand-side policies prioritise?
It finds that:
- Two constraints affect the ability of the Scottish Government to implement such demand-side policy interventions: reserved matters which the UK Government has not devolved to the Scottish Government and international trade law.
- The drivers of purchasing decisions vary by buyer type.
- Demand-side policies are more likely to be effective if they target those EII sectors with the largest emissions-reduction potential and the largest share of domestic consumption as these policies primarily target domestic buyers.
- Policymakers should account for a range of considerations when determining which policies to prioritise in the Scottish context.
- Evidencing lower-carbon production is important regardless of the demand-side policy.