Chapter 10.2.1 Strategic approaches

Set up a Carbon Emissions Land Tax

A well-designed Carbon Emissions Land Tax would accelerate progress towards maximising carbon sequestration on large landholdings.

UK Govt
Scottish Govt
Local Authorities
Emissions reduction
Behaviour change

Scotland’s land could be sequestering millions of tonnes of carbon a year more than it does at present. Despite incentives such as woodland and peatland restoration grants, our land is failing to deliver its immense potential to become a major carbon sink. By attaching a payment (a tax) to estimated net carbon emissions from the land, a Carbon Emissions Land Tax would compel large landowners, with holdings over 1,000 hectares, to take more seriously their responsibilities to support national and international climate targets.

Provided it is administered and collected by local councils, a Carbon Emissions Land Tax would be legally compatible with existing devolved powers. As a first step, it would require enabling legislation by the Scottish Parliament to give councils discretionary powers to introduce the tax at a local level.

Expected short-to-medium term revenues from the tax could assist the Just Transition by generating many millions of pounds for hard-pressed rural councils, which in turn could be used to help fund climate-related projects such as extensions of concessionary public transport; home insulation for social housing; community renewable start-ups; community woodland projects; and organic local food production and distribution.

Co-benefits include the creation of a range of technical, professional and manual jobs, particularly in Scotland’s most sparsely populated areas. It would also contribute to nature protection by shifting land use away from damaging practices such as muirburn and overgrazing, which in turn would allow nature and biodiversity to flourish alongside restored peatlands and expanded woodlands.

The impact of the tax would take time to translate into carbon savings, but academic studies and Scottish Government research suggests that the areas of land that would be targeted by this tax have the potential to sequester, at a conservative estimate, upwards of 6 million tonnes of CO2e annually by 2040, and around 600 million tonnes of CO2e over the next 100 years.

A Carbon Emissions Land Tax could be included in the forthcoming Land Reform Bill (scheduled to be introduced by the end of 2023).

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Version 1.0: September 2023

The contents of this document will be updated on a regular basis.