The story of Scotland’s extraordinarily skewed pattern of land ownership is far from new and we can credit Andy Wightman for mapping out a great deal of that narrative.
Yesterday, the forester, land reform campaigner and former MSP filled in another bit of the story in a report, co-authored with Jon Hollingdale and titled Forest Ownership in Scotland 2022 Ten Years Later. In summary, it tells us that things have got worse over a decade – and carbon markets are partly to blame – a fact which will be of little surprise to those watching Scottish land sales.
The report presents a snapshot of change that has happened over a decade. It follows the pattern of a similar report created in 2012, and finds that in that period, private ownership of forest has increased by 11.6% and public ownership has shrunk by 2.2%.
Scotland’s forest ownership, we learn, is “dominated by absentee owners, with a significant increase in absentee owners domiciled in the rest of the UK”. It is more concentrated, with fewer private owners owning more land.
It also gives a chief reason for this shift. “This trend,” it says, “toward more concentrated ownership has been driven primarily by the expansion in financial investment ownership compared to 2012.”
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In other words, the green rush around the voluntary carbon market is, at least in part, responsible. What’s striking is the list of investment companies involved. Since 2012, new names, Gresham House, Julia Hands and the Church of England Commissioners, have started to dominate the league table of owners.
The biggest of these is Gresham House, which describes itself as "a specialist alternative asset manager", and gained media attention when its was backed to a tune of £50 million by the Scottish National Investment Bank. At the time, then Scottish Labour leader Richard Leonard, was inspired to describe it as having a business objective "not to plant trees or save the planet but to aid the super-rich in avoiding paying taxes - income tax, corporation tax, capital gains tax and inheritance tax”.
This latest report is a reminder of the fact that, in spite of Scottish Government policies to enable community acquisition of land, that shift is not happening. Not only that, but the public fund to help enable community buy-outs is shrinking in proportion, as land values rocket.
The Scottish Government is also, when it invests, adding fuel to this land value problem. As the report says, the Government has “added to market pressures by directly funding FLS to acquire land (rather than requiring a revolving door” sales policy) and through the 2021 investment of £50m by the Scottish National Investment Bank in the Gresham House Forest Growth & Sustainability Fund.”
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This shift towards financial investors, should be no surprise given the global growth in the voluntary carbon market. Forecasts are that the big boom is yet to come. A Shell report by Brooklyn Consulting, and another by Barclays, both. with the former saying the market would be at least five times bigger by 2030, and the latter
The language has shifted too. There is talk now not just of carbon markets, but ecosystem markets.
Meanwhile, this issue is a hot topic in the nature and land sectors, with many echoing the report’s concerns.
In a recent webinar hosted by the Scottish Ecological Design Association, Emma Cooper of the Scottish Land Commission observed how “real changes” have happened in the way the land market is operating in recent years. “We’ve seen an increase in land prices, a change in the kind of people who are purchasing land - we're seeing more corporates and more institutions purchasing - and we are also seeing a lot of land-used change, for afforestation and peatland restoration.”
Wightman and Hollingdale have their own suggestions on how to counter the carbon credit problem. They call for tightening of regulation to “ensure additionality and remove rewards for past bad practice” as well as “mandatory third party accreditation of carbon and biodiversity buyers to ensure that only genuinely unavoidable emissions are offset”.
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But they also propose something more radical – which is “for all such transactions to be prohibited or to govern atmospheric carbon as a commons regime”.
It is, of course, hard to see such radical change happening, and meanwhile the carbon train seems almost unstoppable - and to many involved in restoration and so-called ‘nature-solutions’ also attractive. As one speaker at the SEDA talk observed, there is a “wall of money coming down the pipes” from what are now being called "ecosystem markets".
The fear, meanwhile, is that we are just at the start of a new phase of profiteering from our natural resources.
Like the growth in global inequality, the shift in Scotland’s land ownership seems to move inexorably in the wrong direction. Voluntary carbon markets looks set only to put a rocket under this. The problem, in part, is that financial markets and investment firms are now moving fast and governments still seem tortoise-like in their creation of regulation.
The Scottish Government has opportunities, as least, this year in the Land Reform Bill and the Agriculture, but it feels like it is trailing far behind. The hare of the carbon market is now at full gallop; it’s time we caught up.
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