Scotland's Natural Capital Asset Index - 2022 Summary

Key Messages

• For 2020, natural capital is classed as being ‘maintained’ with results showing a mixture of increases, decreases and ‘no change’ amongst the habitats and ecosystem service categories.
• For 2020, the potential to contribute to well-being of grasslands, woodlands, and agriculture and cultivated habitats have all improved slightly.
• With ten years since the first publication of the Index and the ten year commitment to attain a wellbeing economy laid out in Scotland’s National Strategy for Economic Transformation, NatureScot will be refreshing the Natural Capital Asset Index to ensure it remains a robust and relevant economic indicator for natural capital and well-being in Scotland

What is the Natural Capital Asset Index?

Natural capital is the environmental resources (e.g. plants, animals, air, water, soils) that combine to yield a flow of benefits to people. Natural capital has historically been eroded by human activity, partly because it has not been properly valued when compared with other types of capital.

The Natural Capital Asset Index (NCAI) helps us assess Scotland’s prosperity: it tracks the capacity of Scotland’s terrestrial ecosystems to provide the benefits that underpin our quality of life and that of future generations. Scotland’s Economic Strategy recognises that investment in natural capital is “fundamental to a healthy and resilient economy.”

The NCAI is a composite index which tracks changes in the capacity of Scotland’s terrestrial ecosystems to provide benefits to people. The Index does not include the marine environment. It is not a monetary value but is composed in a way which reflects the relative contribution of habitats to the wellbeing, or quality of life, of those who live in Scotland.

The capacity of ecosystems to provide benefits fluctuates over time due to changes in habitat quantity and quality. Habitat quantity is tracked using what we know about land cover change in Scotland. Habitat quality is tracked using 38 separate indicators which rely on datasets gathered by a range of public organisations and citizen science schemes.

Gaps still remain in our understanding; for example, our knowledge of upland habitats outside of protected areas is limited. The NCAI is a work in progress and efforts will continue to refine its methodology and data. We often rely on indicators that are compiled by other organisations.

Whilst the NCAI is an indicator of terrestrial habitats’ contribution to wellbeing, it does not account for Scotland’s considerable marine habitats, although a feasibility study for a marine version of the index was conducted in 2019.

The NCAI does not demonstrate changes in biodiversity nor a habitat’s resilience to outside pressures although it does acknowledge the importance of biodiversity for healthy and resilient ecosystems and the future delivery of benefits. Some of these shortcomings can be assessed using the ecosystem health indicators.

Methodology

The NCAI uses ecosystem services to assess how nature contributes to the wellbeing of Scottish citizens.

Ecosystem services are the range of benefits people can derive from the natural environment. These services are often grouped into three distinct categories:

• provisioning, for example of water and food;
• regulating, for example of climate or disease; and
• cultural contributions which include aesthetics and recreation.

The following Scottish habitats are included in the NCAI:

• Woodland
• Inland surface waters
• Coastal
• Grasslands
• Mires, fens and bogs
• Heathland
• Agriculture and cultivated

Each habitat delivers a unique and varied blend of benefits, as demonstrated below.

The index is set against a baseline year 2000 which is given the value 100.

The NCAI is a work in progress and efforts will continue to refine its methodology and data. For the 2020 update, the COVID-19 pandemic impacted the ability to conduct fieldwork for some of the bird surveys typically conducted in the spring.

Results

The potential of Scotland’s habitats to deliver ecosystem services has improved over the past 20 years and is now at its highest level since 2000, recovering from a recent low in 2012. Despite consistent modest improvements, the NCAI is officially classed as ‘maintaining’ by the National Performance Framework where it is an economic indicator of sustainable development. This follows a deterioration in Scotland’s natural capital between the 1950s and 1990s with many habitats declining during this period, including bogs and grassland.

During the life of the NCAI so far, nature’s potential to contribute to people’s well-being in Scotland has fluctuated between improvement and deterioration. From 2000 to 2006 the overall trend of the index was increasing and in 2007 decreased until 2010 when a decline of more than 2% had occurred for at least 3 years and the Index was at its lowest point, below the 2000 baseline. But, from 2011 until 2017 the overall trend of the NCAI increased, achieving an ‘improving’ status from 2015 to 2017. Since 2018, the NCAI has seen a small decrease to plateau until 2020 with an absolute value increase of 0.2%, nearly returning to the Index’s highest level in 2017.

Well-being by type of ecosystem service largely mirrors the trends of the overall scores of the NCAI. Regulating and maintaining ecosystem services are weighted with the greatest importance for well-being in Scotland.

Woodlands continue to be the habitat with the greatest potential to contribute ecosystem services and benefits to people in Scotland. However, this has largely been driven by the expansion in woodland extent and is likely overshadowing the decline and poor state of woodland site condition as well as the potential climate impacts of planting on carbon-rich soils. Much of the woodland creation in Scotland has been single-species conifers that provide some but not the full range of ecosystem services a more natural woodland could.

Results by individual habitats

Woodlands

• The absolute value of woodlands increased 0.5% from last year, continuing its improvement since 2011.
• However, more than half the amount of protected woodland in Scotland is in unfavourable condition at 51%, a trend that has existed for the duration of the NCAI, while only 35% of woodland can be considered to be in favourable condition.
• Within the Index, the expansion of woodland extent is potentially overriding this decline in woodland site condition and the potential climate impacts of planting on carbon-rich soils. Much woodland creation has been single-species conifers that provide some but not the full range of ecosystem services a more natural woodland can potentially contribute to well-being.
• Apart from a slight decline in 2009 and 2010, woodland habitat has had a positive trajectory, performing better than any other Scottish habitat in its potential to contribute to well-being since 2014 when it overtook the inland surface waters habitat. New tree planting has largely driven this trajectory, the quality of woodland condition.

Inland surface waters

• Slight decrease in absolute value in last three years with the habitat remaining 8.4% above the 2000 baseline.
• Slight decline in site condition (-0.5%) from 2019.
• Wild salmon and grilse rod and line catches from recreational angling in rivers have continued to decrease (-3.9% from 2019).
• Inland surface waters have been slowly but continuously improving from 2000 through 2018. 
• Absence of data held by SEPA has meant that these values are less accurate than usual.

Coastal

• A second consecutive, albeit small, decrease in 2020, potentially indicating the start of a downward trend.
• Site condition has decreased, and there has been a notable decline in wintering waterbirds (-4.3% from 2019)
• Coastal habitats saw improvement from 2000 to 2008 until a brief plateau and decline before continuing to improve from 2013 until 2019. 
• A large amount of data for 2020 is missing due to SEPA’s inability to provide this, so this will affect the ability to track changes this year.

Mires, bogs, fens

• Decrease in absolute value of -0.2%, less of a decline than in 2019
• Site condition has remained steady from the 2019 condition but remains at levels lower than the baseline year in 2000.
• Mires, bogs, and fens had declined in their potential to contribute to well-being until 2011. This habitat has since experienced small fluctuations of increasing and decreasing to ultimately plateau in the last five years.

Heathland

• The absolute value of heathlands decreased 0.34% from last year.
• Site condition of heathlands remained stable while the total number of different bird species counted fell 18.7% and the number of adults making one or more outdoor visits per week increased 41%. These latter two indices were associated with conditions relating to the COVID-19 pandemic. With fewer indicators feeding into scores for heathlands, these indicators used across multiple habitats may be masking some of the broader habitat trends.
• Heathland habitats have decreased since 2000, hitting their lowest point below the baseline in 2010 when heathland potential to contribute to people’s well-being has made a comeback through 2016, at which point the NCAI score has levelled out in the last four years.

Agriculture & cultivated

• The absolute value of agriculture and cultivated habitats increased 0.7% from last year.
• Over the longer term, however, agriculture and cultivated habitats have shown a decreasing trend largely due to a reduction in ecosystem extent and this has consistently been the habitat group with the smallest potential for ecosystem services, staying below its 2000 baseline since 2003. 
• Fertiliser use has continued in a four-year declining trend.
• The area of high-level agri-environment schemes to protect and restore farmland of high environmental or biodiversity potential or value increased 4.7%.

Grasslands

• The absolute value of grasslands increased 0.9% from last year, however site condition decreased by 1.7%.
• The area of high-level agri-environment schemes to protect and restore farmland of high environmental or biodiversity potential or value increased 4.7%.
• Grasslands habitats have had one of the most changeable trends of any habitat in the Index. From 2000 to 2007 grasslands saw a steep increase with a steep decline until almost returning to baseline levels from 2012 to 2014. A sharp increase from 2015 on, has seen grasslands almost returning to their highest point in the NCAI.
• Ecosystem extent for mesic grasslands has had bouts of expansion and reduction, contributing to these swings in grasslands habitats’ potential to provide benefits. 

Historic trends of the NCAI

In 2014 we carried out a back casting exercise to understand the longer term trends of natural capital in Scotland. An attempt was made to backdate the Index to 1950.

Unfortunately, this exercise wasn’t able to use the same detail of habitat quality data that has been available since around the year 2000. However, using more coarse datasets we were able to demonstrate the longer term trends of natural capital in Scotland.

The trend suggests that natural capital has been in decline since 1950 and efforts to recover natural capital in Scotland still have some way to go to return to historic levels. This mirrored similar trends seen globally as highlighted by the Dasgupta review

Natural capital, biodiversity, and the climate crisis

Changing climates continue to put pressure on habitats and impact their ability to provide essential services. If climate change is allowed to continue unchecked extreme weather events will continue to increase in impact and frequency.

The Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) global assessment, reported on the continuing deterioration of nature worldwide. In 2019, Scottish Government declared a global climate emergency and committed to a net-zero society by 2045. In 2020 Scotland’s parliament passed a note noting the collapse in biodiversity globally and in Scotland

Scotland’s natural capital is supported by biodiversity: its function, resilience and ability to provide benefits now and into the future are fundamentally reliant on the diversity of life – genes, species and ecosystems. The NCAI does account for biodiversity through various bird and butterfly indicators, but more work is required to integrate biodiversity more fully into the Index.

In 2021 the UK treasury released the Dasgupta Review of the Economics of Biodiversity, the global review highlighted the importance of biodiversity for life and wellbeing on the planet and the need for change in the economic system to protect nature. Investment in natural capital through nature based solutions will reduce the driving force of climate change (through carbon sequestration) but will also increase a wide range of other ecosystem services whilst simultaneously creating opportunities for biodiversity. Failure to invest in natural capital was found to cost twice as much in the long run.

The review advocated for the approach the NCAI takes, as a change indicator for overall stocks of natural capital and as a national wealth indicator demonstrating the contribution of nature to Scotland’s wellbeing.

A refresh of the Natural Capital Asset Index

NatureScot is planning a refresh of the components of the NCAI, in line with Scotland’s National Strategy for Economic Transformation to have transitioned to a wellbeing economy in ten years’ time. This exercise will address some of the gaps in our understanding of the condition of nature in Scotland.

NatureScot worked with remote sensing specialists Space Intelligence to develop a technique for remote sensing of habitats, allowing a repeatable map at 20m² resolution that can be updated on an annual basis. This will plug a gap in the NCAI model that has existed since its first update and will provide a much more accurate understanding of land use changes in Scotland. Maps have already been produced for 2019 and 2020, as well as a map highlighting the change that occurred between those two years. It is hoped that they will be integrated into the index this year.

Additionally, the refresh of the Index plans to examine the quantity and quality of the indicators as well as conducting a public survey to update the weightings on how people value nature in Scotland.

Scotland’s National Natural Capital Accounts

The Scottish Natural Capital Accounts are experimental statistics produced in partnership with the UK Office for National Statistics and Department for Environment, Food and Rural Affairs. The Accounts look at what the natural capital assets in Scotland are, the physical and monetary flows of these assets and the values of the ecosystem services they provide.

The 2022 release of the Scottish Natural Capital Accounts found Scotland’s natural asset value to be £206 billion, 17% of the UK total, in 2018. The total value of annual flows from Scottish natural capital assets in 2018 was £15.6 billion. A summary of the report can be found here.

The Natural Capital Accounts are not a price tag for nature in Scotland but a tool to understand nature’s impact on people and to help incorporate nature into policymaking decisions. The asset values are not an absolute "value" of the price we would accept to sell the entire natural world. The natural world supports all life on earth, and its collapse would precipitate our own, implying infinite value.

The Accounts differ from the NCAI in many ways; a full explainer can be found in the NCAI comparison document.

Final notes and contact details

Full results of this year’s NCAI can be viewed in our NCAI StoryMap.

More information about the NCAI, including trends for all terrestrial habitats and the detailed NCAI model is contained on our website. Further technical information on the NCAI and how it was formed can be found in the journal Ecological Indicators (McKenna et al, 2019).

Links to the NCAI 2020 data can be found separately in the NCAI detailed model spreadsheet

Please get in touch if you would like further information.

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