Natural capital - it’s changing the way that landowners, and the rest of us, will look at nature.
In Scotland we’re so rich in ‘natural capital’. It’s on the radar for governments, businesses and even farmers but what does it mean?
According to the Scottish Government definition, natural capital is the ‘renewable and non-renewable stocks of natural assets, including geology, soil, air, water, and plants and animals that combine to yield a flow of benefits to people’. In other words, it’s nature.
Clearly, Scotland’s natural capital isn’t new. What is new – or at least, higher on the political agenda – is the realisation that enhancing natural capital has a critical role in managing the climate change and biodiversity crisis.
As an example, woodlands and peat restoration can help to reduce carbon emissions, but traditional models and markets incentivised landowners to cut down forests or rear carbon-emitting livestock on their land. Hence the new interest in incentivising them to enhance their natural assets or biodiversity by putting a value on ‘ecosystem benefits’ (such as carbon sequestration) via natural capital accounting, markets and subsidies.
Change is on the horizon
As a result of the natural capital boom, landowners’ revenue options are changing, and so too is the countryside.
For example:
- The Scottish Government has a target of planting 36 million trees by 2030 and ambitious goals on peatland restoration. Grants, along with voluntary standards like the Woodland Carbon Code, aim to promote this.
- Whereas traditional forestry incentives focused on timber, new incentives will involve different types of tree and woodlands staying in place for decades, so the appearance of some parts of the country may change.
- Investors and policymakers may incentivise different approaches to wildlife management and biodiversity, not just with high-profile species like deer and hares, but with lesser-known birds and insects.
- Businesses’ growing interest in using Scottish land for ‘greening’ schemes has fuelled land price rises, and may continue to do so.
Navigate with care
All this offers a fresh outlook for landowners, farmers and rural communities. There are opportunities in terms of subsidies and investment, but the attached conditions (financial or otherwise) could affect the management of the land for decades to come.
Therefore, just as with any journey into Scotland’s peatlands, farms, hills or more difficult terrain, tread carefully.
Leanne Gordon, Director, Rural Services
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