Lorna Slater has agreed a £2billion carbon offsetting scheme which could allow tax avoiders to cash in on Scotland’s woodlands.
The under-fire Greens minister was pictured signing off on the private finance deal which has been branded “greenwashing” by critics.
It will see the Scottish Government partner with two private banks with links to offshore havens.
Investors in the private finance initiative deal will be able to fund tree planting and bog restoration projects which naturally capture and store CO2.
Polluting companies like airlines can then claim net zero credentials by buying “carbon credits” from landowners on the back of the forests and wetlands.
But we can reveal an offsetting scheme run by Australia’s government has been branded an environmental “scam” and taxpayer rip-off by a whistleblower who helped set it up.
Campaigners have called offsetting the “next big thing in greenwashing” and Slater’s own former Green Party colleague Andy Wightman – a leading land reform expert – has demanded she explain the policy.
He said: “Lorna Slater needs to be questioned about this, she needs to explain why she is doing it.
“Scottish ministers are sleepwalking into a future of global capital and carbon markets despite the entire concept being highly questionable.
“The problem is that every ton of carbon sequestered bywoodlands and offset against emissions by cement factories or fashion companies is a ton of carbon that is contributing nothing in the long-term to net zero since it has been sold as an offset to a polluter enabling them to continue polluting.
“Polluters can claim to be doing the right thing rather than investing in polluting less themselves.
“The Scottish Government is becoming a central player in this market since it provides the means of validating carbon credits through its Woodland Carbon Code and provided guidelines for investors.
"An alternative policy could be simply to place landowners under legal obligations to restore forestry and bogs – the damage to which has been caused in large part through their land management activities.
“They could also reform land and property taxes to deliver woodland, water and peatland restoration.
“Much of this will be at no cost to the public and will not involve global financial corporations becoming partners in any such activity.”
Taxpayer-funded agency NatureScot claims the finance deal could capture 28million tons of greenhouse gases over three decades.
The money could be in the form of loans to private landlords, NGOs and public bodies, as well as equity investments. The first pilot scheme will focus on areas in the Borders and on the west coast.
Partners in the scheme, Edinburgh-based Hampden&Co, has major investors based in the tax haven of Bermuda while Lombard Odier Asset Management is based in the tax haven of Switzerland.
Private banks help wealthy clients – many of whom will use offshore trusts and other tax-reducing structures – to manage their cash.
The third partner in the “memorandum of understanding” brokered by NatureScot and biodiversity minister Slater is “global impact firm” Palladium.
Labour MSP Colin Smyth said: “It’s ironic the Greens are now signing multi-billion-pound private finance initiatives to try to bail their own Government out after failing to hit their net-zero targets.
“There are genuine concerns that offsetting schemes can be little more than greenwashing, which allows big businesses to trade their carbon rather than reduce it and drives up land prices, allowing firms to cash in.
“The lack of transparency over how this scheme will work means we don’t know what big businesses are getting in return and there should be a Holyrood probe.
“The Government share of the money poured into this deal will come right out of the public pockets and taxpayers deserve to know their share will help the environment.”
Scottish Conservatives Liam Kerr said: “In typical SNP-Green style, this arrangement looks to be shrouded in secrecy.
“Despite being openly opposed to economic growth, Lorna Slater seems to have developed a sudden fondness for private finance initiatives.” Slater – a member of the Scottish Government thanks to Nicola Sturgeon’s deal with her party – is already facing criticism over her floundering deposit return scheme.
Scottish Lib Dem climate emergency spokesperson Liam McArthur said: “We need to be sure carbon offsetting schemes drive down emissions and are not used by companies as a means of greenwashing environmental damage they’re causing.”
Think tank Common Weal added: “Will the Scottish Government never learn? Less than two years after the cackhanded privatisation of Scotland’s offshore wind, they’re going to privatise Scotland’s trees.
“Scotland is becoming a playground for the rich where the Government creates more and more schemes to help them use their wealth to make even more money off the back of Scotland’s national assets.”
A Scottish Government spokeswoman insisted the scheme represents value for money and would help the environment.
She said: “Restoring our natural environment to address biodiversity loss and climate change requires significant investment and the public purse cannot meet this alone.
“This pilot is testing a model for responsible private investment that it is estimated could generate up to £2billion of investment, creating up to 185,000 hectares of native woodland and sequestering up to 28million tons of carbon over the next 30 years.”
Hampden&Co said: “We are a bank for clients based in the UK and this initiative is aimed at supporting those who may be considering developing their land for the purposes of nature restoration.”
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