Scotland’s land crisis: Why green investors are driving up prices and locking out locals

Scotland has a long history of concentrated land ownership, with half of the privately owned land in the hands of less than 0.01% of the population. This has led to social and economic inequalities, as well as environmental degradation, in many rural areas. Now, a new wave of green investors is adding to the pressure on land prices and availability, as they seek to profit from the country’s ambitious climate targets.

The lure of net-zero

Scotland has set some of the most ambitious climate goals in the world, aiming to reach net-zero emissions by 2045. To achieve this, the country needs to transform its energy, transport and land use sectors, and invest in renewable sources such as wind, solar and hydro power.

Scotland has a rich potential for renewable energy, with about a quarter of Europe’s offshore wind and tidal resources. The country also has vast areas of peatland and forest, which can act as carbon sinks and store greenhouse gases. These natural assets have attracted the attention of wealthy individuals and corporations, who see them as lucrative opportunities for green investment.

Some of these investors are billionaires, such as Anders Holch Povlsen, the Danish fashion tycoon who owns more than 220,000 acres of land in Scotland. He has been praised for his conservation efforts, such as restoring native woodland and wildlife habitats, but also criticised for his influence and exclusivity. Others are hedge funds, pension funds and private equity firms, who are looking to cash in on the growing demand for carbon credits and renewable energy subsidies.

The impact on communities

The influx of green investors has driven up land prices and reduced the availability of land for local communities, who often struggle to compete with the financial power and political connections of the outsiders. According to a report by Community Land Scotland, the average price of land sold in Scotland increased by 50% between 2016 and 2019. The report also found that only 16% of the land sold in that period was bought by community groups, while 84% was bought by private buyers.

Why green investors are driving up prices and locking out locals

Many rural communities in Scotland have been campaigning for more control and ownership of their land, as a way to improve their living conditions, create jobs and protect their environment. Since 2001, the Scottish government has supported community buyouts, which allow local residents to purchase their land from absentee landlords, using grants from the Scottish Land Fund. More than 500,000 acres of land are now in community ownership, and more buyouts are in the pipeline.

However, community buyouts are not always easy or feasible, especially when the land is already owned by green investors who are not willing to sell or negotiate. Some communities have faced legal challenges, delays and hostility from the landowners, who claim that they are acting in the best interest of the environment and the economy. Some communities have also faced opposition from environmental groups, who argue that community ownership may not guarantee the best outcomes for biodiversity and climate change.

The need for reform

The Scottish government has recognised the need for reforming the land ownership system, and has introduced several policies and legislation to address the issue. In 2016, it published Scotland’s Land Rights and Responsibilities Statement, which sets out a vision and principles for achieving a fair, inclusive and productive relationship with the land. In 2018, it established the Scottish Land Commission, an independent body that advises and monitors the implementation of land reform measures. In 2021, it published Scotland’s Third Land Use Strategy, which outlines the objectives and actions to achieve sustainable land use in the next five years.

Some of the key actions proposed by the government include:

  • Developing a national land use framework, which will guide decision-making and planning on how land is used and managed across Scotland
  • Supporting community ownership and empowerment, by increasing the funding and support for community buyouts, and expanding the community right to buy to cover more types of land and situations
  • Improving transparency and accountability, by creating a public register of land ownership and control, and introducing a code of conduct for landowners and managers
  • Promoting diversity and innovation, by encouraging more women, young people and ethnic minorities to get involved in land ownership and management, and supporting new models of land tenure and use, such as co-operatives and social enterprises
  • Enhancing public interest and participation, by engaging with stakeholders and citizens on land issues, and ensuring that land use contributes to the well-being and resilience of communities and the environment

The government has also committed to review the tax and fiscal incentives for land ownership and use, and to explore the possibility of introducing a land value tax, which would tax the unimproved value of land rather than the buildings or improvements on it.

The way forward

Scotland’s land reform agenda is ambitious and complex, and faces many challenges and trade-offs. The government has to balance the interests and rights of different groups and sectors, and ensure that land use is aligned with the national and global goals of tackling climate change and biodiversity loss. The government also has to deal with the legacy and reality of the existing land ownership system, which is deeply entrenched and resistant to change.

The role of green investors in Scotland’s land use is controversial and contested, and there is no simple or clear answer to whether they are a force for good or ill. On one hand, they can bring resources, expertise and innovation to the land sector, and help accelerate the transition to a low-carbon economy and society. On the other hand, they can exacerbate the inequalities, conflicts and environmental problems that are already present in the land sector, and undermine the aspirations and rights of local communities.

The challenge for Scotland is to find a way to harness the potential of green investment, while ensuring that it is fair, transparent and accountable, and that it supports and respects the diversity and democracy of land ownership and use. This will require a collaborative and participatory approach, involving all the relevant stakeholders and citizens, and based on a shared vision and values for the land. Only then can Scotland achieve a truly sustainable and inclusive relationship with its land.

By Ishan Crawford

Prior to the position, Ishan was senior vice president, strategy & development for Cumbernauld-media Company since April 2013. He joined the Company in 2004 and has served in several corporate developments, business development and strategic planning roles for three chief executives. During that time, he helped transform the Company from a traditional U.S. media conglomerate into a global digital subscription service, unified by the journalism and brand of Cumbernauld-media.

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