A drive by wealthy companies to plant forests in the Scottish Highlands to offset their carbon emissions risks creating even greater inequalities in rural areas, a major report has warned.
Hill ground with natural capital potential can sell for £1,200 to £1,600 an acre, double its value several years ago. By December 2021, 638 new Scottish forests and woods had been registered with the Woodland Carbon Code, an official scheme that allows their owners to sell carbon credits, where the CO2 captured by new trees is sold to companies to offset their carbon emissions.
The analysis says a surge of Highland estate sales to major corporations and cash-rich investors, such as Aviva, Standard Life and BrewDog, has driven up land prices sharply and increased the elitism and exclusivity of land ownership, while they aim to limit climate heating. Known as natural capital or green finance investments, corporations have come under intense pressure to absorb or offset their carbon emissions to hit the Paris climate accord goal of limiting global heating to 1.5C by 2050.
The Scottish and UK governments have targets to plant 30,000 hectares (75,000 acres) of new woods and forests across Britain a year. Scottish Forestry, a government agency, is midway through a three-year programme worth £217m to plant 46,500 hectares (115,000 acres) of new woodland by April 2025, roughly equivalent to 93m trees.
John Hollingdale, a community ownership expert, in a report for Community Land Scotland, a land reform body, said those investments were further subsidised by exemptions from inheritance tax, business property tax relief, and income and corporation tax on profits for commercial woodland, as well as non-domestic rates exemptions. Increased funding for forestry and its tax advantages means existing owners can increase the value of their land and businesses by moving into woodland creation. While that has environmental benefits, it can make owners less likely to sell, pushing up land values by increasing scarcity.
To the alarm of land reform campaigners and the National Farmers’ Union, that has led to land prices more than doubling in some areas of Scotland, as the competition for upland estates and farmland intensifies.
Hollingdale’s report warns this trend also prices out local communities hoping to buy their land to increase local employment, tourism, ecological management and micro-businesses.
In 2020, the Scottish Land Fund, which funds community buyouts, stopped taking applications after five months because its £10m budget was oversubscribed. That has since been doubled to £20m, but surging land prices may soon swallow up that increased funding.
Hamish Trench, the chief executive of the Scottish Land Commission, an official body focused on reforming highly concentrated patterns of land ownership, believes there is a “real risk” green finance investments will further concentrate the ownership of land and its benefits.
In 2019, the commission said, just 87 owners – made up of private owners, charities and state-run bodies – controlled 1.7m hectares of rural Scotland.
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