What Green industrial strategy?

Rory Hamilton

Last week, the Scottish Government published the first part of its Green Industrial Strategy for Scotland. The long and short is that there’s not much in it. This might be to be expected from a ‘foundational’ paper that “identifies areas of strength and opportunity for Scotland to grow globally competitive industries in the transition to net zero”. Before getting into the meat of the paper, I might make two observations: 1) for an ‘industrial’ strategy, unions are only mentioned once - for a piece of work which should have a direct impact on workers, workers who will be key to a just transition, you’d think consulting with them might have made sense; and 2) for a piece of work targeted at addressing Scotland’s response to the climate crisis, something we’ve known about for years, this is far too late in coming. Common Weal published its Green New Deal for Scotland, fully-costed in late 2019-early 2020, and only five years later are the Scottish government putting forward a strategy for tackling the same issues.

The strategy highlights five ‘opportunity areas’ for Scotland: 1) maximising Scotland’s wind economy; 2) developing a self-sustaining carbon, capture, utilisation and storage sector; 3) supporting green economy professional and financial services, with global reach; 4) growing our hydrogen sector; and 5) establishing Scotland as a competitive centre for the clean Energy Intensive Industries of the future. Let’s go through them one by one and see what lies beneath the rhetoric.

1. Maximising Scotland’s wind economy

It’s a bold move to open with a goal to maximise Scotland’s wind economy, when none of it is in the hands of the Scottish public. As Common Weal has extensively covered, not only was it wrong to sell off Scotland’s offshore wind capacity to the private sector in the first place (instead of placing this in the hands of a National Energy Company, whether through Municipal ownership or through a mutual company), but the capping of bids for licences severely limited the potential for ScotWind to ‘maximise’ the offshore wind potential in the same way as, say New York did. The Scottish Government should now consider buying equity stakes in the projects to return revenue to the Scottish public, and move from having no involvement in the development of Scotland’s natural resources to being a silent partner, with a longer term option to become the active or sole partner.

2. Developing a self-sustaining carbon, capture, utilisation and storage sector

CCUS is another scheme which we have debunked time and time again. Not only has it been proven to not work, but in some cases the emissions are more harmful. I wont go over all the arguments again, instead watch this short video or read Robin’s article from THREE years ago. What I will say is this, Carbon Capture and Storage is a con led by the oil and gas industry as a way to delay the transition to renewable energy and keep their profit base alive for a few years longer. They are pushing it hard - last year there were 30 meetings held between the Scottish Government and oil and gas executives which were initially kept hidden from the public record. The money invested in developing the CCUS sector as part of this strategy would be much more effective in supporting training schemes for current oil and gas workers which will help them move into renewables-based jobs.

3. Supporting green economy professional and financial services, with global reach

So the argument goes that financial and professional services (FPS) is one of Scotland’s core strengths, being the largest financial centre outside of London, employing around 144,00 people. But it should be no surprise to hear that the interests represented by this sector are not those of the broader public. Whether it is one of the big four accountancy firms, hedge funds and investment banking, fintech, or asset management companies, the goal is maximising financial returns on investments largely by speculating on values. In this case the speculating is focused on Scotland’s “natural capital” (for natural capital read, Scotland’s resources: wind, land, solar, tidal, etc.), meaning that supporting Scotland’s green FPS sector with global reach is code for attracting more foreign direct investment (again code for profit extraction), as we’/ve already seen successfully leveraged in the offshore wind industry and in the selling off of Scotland’s trees. Besides - who ever thought of accountants and bankers when ‘industry’ was mentioned, Sod’s Law for all the engineers, welders, timber workers, transporters, farmers, joiners, plumbers, electricians, and anyone else whose skills will be crucial to the just transition that I haven’t mentioned. When the closure of one of Scotland’s last remaining industrial sites at Grangemouth is estimated to see around 400 immediate job losses and impact a further 2,200, it is fairly on the nose that it might well be white collar workers (many of whom will already come from and live in fairly comfortable living and working conditions) who will see the greatest support from what should be an enormous engineering and investment programme like the Green New Deal.

4. Growing our hydrogen sector & 5. Establishing Scotland as a competitive centre for the clean Energy Intensive Industries of the future

Now there isn’t so much to comment on these final two ‘opportunity areas’, hence I am taking them together here. Common Weal supports the investment in hydrogen technologies, indeed the future of public and sustainable transports is not in electric cars, but moving to alternative fuels such as hydrogen. A word of warning though, is not to read all hydrogen as good hydrogen. Some hydrogens are can be derived from fossil fuels such as gas, and the use of carbon capture for example is one means of turning this into ‘clean energy’, it has been shown that blue hydrogen can be worse for the environment than the pure gas itself. So while we must support growing the hydrogen sector, emphasis should be placed on sourcing green hydrogen and not giving credence to hydrogen fuels which masquerade as clean energy but are actually just fossil fuels in disguise. And similarly the establishing to Scotland as a competitive centre for clean energy industries is surely the goal of this whole strategy which, objectively, and especially considering Scotland’s natural resources, is hardly disagreeable. 

So in short, this so-called ‘industrial strategy’ is caked in the language of capital, and without casting too many aspersions, the fingerprints of the Scottish Government’s favourite accountancy firms-come public sector consultants are all over it. So much for the ‘active state’ Kate Forbes and Gillian Martin call for in their ministerial forward, the only state activity in this strategy is opening market doors for the private sector, and closing them again on the way out after all the profit is gone. 

“But the public sector is only part of the economy” they say in the same forward. Is it? You wouldn’t know it was ANY part of the economy from reading this paper. They highlight Denmark and Ireland as examples to emulate, but the choices made by previous SNP governments (of which many members of this cabinet signed off on) have foreclosed the possibility of doing so, whether that’s not creating a National Energy Company (of any kind), and the Energy Development Agency (which we modelled off the Danish example) we proposed, or allowing the Scottish National Investment Bank to fall in tow to the interests of capital, and ignoring the potential of it to be that active state by leading investment into key sectors such as this.

It is quite apt that one of the governments which is failing the workers of Grangemouth, one of Scotland’s last sights of industrial activity, released this lacklustre paper on the same day it was announced that Grangemouth would indeed close next year. Indeed, with the resources we have Scotland should be a green industrial powerhouse leading the world in a radical response to the climate crisis, and lord knows the public needs the investment a Green New Deal would generate, but this paper belies the chokehold that the private sector has on policy making in Scotland.