Award of RRF/006/24 - Consolidating Analyses on Natural Capital in Scotland

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Section 1 – IntroductionThis work seeks to take stock of a range of analytical and academic outputs relating to natural capital and tell a single, coherent story on the state of natural capital in Scotland and implications for the economy and society.The purpose of this work is not to develop new analysis but instead to communicate insights clearly to the public via a short written report, with a specific focus on visuals and infographics.Section 2 – Background & ContextNatural capital refers to the stock of natural resources including air, water, minerals and all living things. These natural resources are crucial to the functioning of our society and economy as they underpin and provide a wide range of social, environmental and economic benefits to the people living and working in Scotland. The National Strategy for Economic Transformation (NSET) refers explicitly to natural capital recognising the role of our natural environment, alongside its intrinsic value, as an asset that provides flows of ecosystem services (e.g. clean water, carbon storage, recreational opportunities) which benefit our society and economy, making human life both possible and worth living. Framing the natural environment in this way emphasises the need to invest in and manage this asset, within safe environmental limits, so that we can continue to enjoy these benefits. The types of benefits that Scotland’s natural capital provides include:- Provisioning services - material outputs such as fish, timber, and fossil fuels.- Regulating services - the regulation of natural processes that help to maintain the quality of the natural environment we rely upon, such as carbon sequestration (the removal of greenhouse gases from the atmosphere), air pollution removal and noise mitigation.- Cultural services - non-material benefits such as recreation and aesthetic.There are several natural capital analyses produced for Scotland regularly or on an ad hoc basis including:1. Natural Capital Accounts – produced for the UK by Office for National Statistics and published each November, with Scotland-specific data available in tables, but not written up; these estimate monetary values for a number of the ecosystem services that our environment brings to society.2. Natural Capital Asset Index – produced by NatureScot. This tracks how well Scotland's key habitats can provide ecosystem services that contribute to our quality of life. This is understood by looking at the extent of different Scottish habitats and their characteristics. The Index includes 38 quality indicators for habitat characteristics.3. Analysis looking at the importance of natural capital to the Scottish economy through the lens of economic sector codes and whether they are underpinned by Natural Capital or not; this was undertaken in 2008 and again in 2024 with a methodology now devised that can be replicated in future years.4. The Strategic Research Programme – funded by the Scottish Government and producing outputs on natural capital in particular, and on specific natural capital assets and ecosystem services within.Natural Capital is a key pillar of the Scottish Governments approach to policy development and economic strategy – investing in nature is a top priority for Scotland’s wellbeing economy. A natural capital approach is not one thing – and work to embed environmental considerations covers a range of approaches such as baseline assessments of natural assets, using nature to identify potential solutions to problems, understanding the science of ecosystem services, rigorous valuation of benefits and developing a range of data and evidence to underpin the whole ROAMEF (rationale, objectives, appraisal, monitoring, evaluation and feedback) cycle.With this, there has been a corresponding emergence of analysis from a range of sources which seek to establish the quantity of our natural capital in Scotland, its quality or condition and the direction of travel.Until now, there has not been a single consolidation which takes this range of information, interprets and presents in simple terms the state and trends of Natural Capital in Scotland.