Scots land values ‘could rise sevenfold’ as investors chase lucrative green schemes
The value of Scotland’s countryside could increase up to seven times over the next three decades amid a surge of wealthy investors buying up land for increasingly lucrative carbon reduction schemes.
The estimated price rise comes amid growing concerns that spiralling land values are leaving local communities frozen out of opportunities and financial rewards on offer for cutting emissions as Scotland heads towards its ‘net zero’ commitment, which is to be achieved by 2045.
A report for Community Land Scotland (CLS) estimates land values could rise from around £5,000 per hectare in 2022 to more than £35,000 per hectare by 2050 given the maximum forecast increase in the worth of carbon credits, which are generated through carbon reducing activities such as tree planting and peatland restoration.
A series of recommendations have been made in the report in efforts to close the gap between those able to benefit from the green schemes. Those recommendations include a public interest test for all large landholdings in Scotland, which could put wealthy owners – so-called Green Lairds – at risk of losing their assets under compulsory purchase orders if they fail to benefit local communities.
Several measures to increase community land ownership, which stands at around 3 per cent in Scotland, and boost sales of public land for carbon offsetting have also been proposed by the CLS report to give fairer access to financial benefits linked to the net zero transition.
Dr Calum Macleod, policy director of CLS, said the important research showed how community land ownership had a crucial role in growing and retaining wealth for local people.
He said: "It’s vital that the Scottish Government and Parliament ensure that the forthcoming Land Reform Bill includes measures enabling communities to increase their scope for doing much more of that localised wealth building in support of a fairer and greener Scotland.” Landowners can generate income through carbon reduction schemes in a number of ways, from selling carbon credits to companies who want to offset their polluting activities or public subsidies for tree planting.
Last year, Standard Life Investments Property Income Trust’s (SLI) acquired 1,447 hectares of land in the Cairngorms National Park for £7.5m to drive down its carbon emissions from its £350m real estate portfolio.
The company is expected to plant around 1.5 million natural broadleaf trees – with the costs expected to be met through public money.
The CLS report, which is being released to coincide with its annual conference in Edinburgh today, estimates the company could be eligible to receive more than £3.5m of grants under the Forestry Grant Scheme to support its tree planting objectives.
The report also recommends the creation of a mandatory system of certification for carbon credits to allow greater scrutiny of sellers and buyers.
Estimates for the value of carbon credits vary widely from £3 per tonne of carbon dioxide equivalent removed from the atmosphere (tco2e) to £30 in 2021.
A recent report by UCL and Trove Research found carbon credit prices could rise to £40 per tco2e by 2030 and up to £75 by 2050, depending on how successful governments are in reducing emissions through domestic policies.
Estate agents Strutt & Parker said “the climate crisis and the international commitment to attain net zero greenhouse gas emissions” drove record estate sales in 2021, with £247m investment in such land made through the agency.
The average price of estates increased by 87 per cent from £4.7m to £8.8m
Nearly two-thirds of the estates were sold privately, without ever coming to the open market.
Scottish Labour land reform spokesperson Rhoda Grant said: “Scotland has some of the most inequitable land ownership in Europe, which has
long damaged communities and leaves our environmental future in the hands of a small number of land owners. “Theemergenceof‘greenlairds’, where land is now changing hands without ever being put on the market, calls for urgent government action.”
But Sarah-jane Laing, chief executive of Scottish Land & Estates, which represents Scottishlandowners,questionedthe proposal for a public interest test for large landholdings. She said: "It is in the public interest for all landowners to play their part in addressing the climate and nature emergencies, so we would question why Community Land Scotland seems to be seekingtointroducebarriersto this.”
A spokeswoman for the Scottish Government said a public interest test for new land transactions of a “particularly large
scale” would be included in the coming Land Reform Bill. She said: “We are taking a number of actions to ensure that the increasing levels of natural capital investment in Scotland deliver benefits for local communities and wider society.
“This includes the introduction of an ambitious new Land Reform Bill, which will include measures to further address Scotland’s historically iniquitous patterns of land ownership, including by tackling problematic scale and concentration of ownership.
“The Bill will aim to ensure that the public interest is considered on transfers of particularly large-scale land holdings, and we will aim to introduce a pre-emption in favour of communitybuy-outwherethepublic interest test applies.”