Kate Forbes import substitution plan would boost Scottish economy

This is an excellent step forward in creating a more resilient economy, but this shouldn't be the outlier. Scotland should have an industrial strategy which considers the development of green import substitution as a way to both improve our journey to net zero, and improve the local economy.

Affordable housing is one of our biggest challenges - and yet we have the land and much of the resources to solve the problem. It is one of my number one priorities - to build affordable homes, keep them affordable and support Scotland's construction industry at the same time. pic.twitter.com/mfaRJ8HACG

— Kate Forbes MSP (@_KateForbes) March 7, 2023

Import substitution is a strategy that seeks to replace imported goods with locally produced goods. The goal is to reduce reliance on foreign goods, which can be expensive and have a high carbon footprint due to transportation and other factors. By producing goods locally, countries can create jobs, boost their local economy, and reduce their environmental impact.

Green import substitution takes this strategy one step further by focusing on environmentally sustainable products. This approach seeks to replace imported goods that have a high carbon footprint with locally produced goods that are environmentally friendly. By doing so, countries can reduce their greenhouse gas emissions and promote sustainability.

There are several reasons for Scotland to develop green import substitution both now and in preparation for independence.

READ MORE: UK diplomats will be 'ordered to keep an eye on Scottish ministers overseas trips'

First, Scotland can address trade imbalances and boost local economies. Scotland has a trade deficit, importing more goods and services than it exports. By promoting local production and consumption of green goods and services, Scotland can reduce the amount of money leaving the country, boosting the local economy and creating new jobs. This can lead to a multiplier effect as money spent locally circulates and generates additional economic activity. By developing local productive capacity, Scotland can reduce its reliance on imports and create a more resilient economy.

Second, green import substitution can promote resilience and security. As the Covid-19 pandemic has shown, global supply chains can be disrupted, leading to shortages of critical goods and services. By promoting local production and consumption of green goods and services, Scotland can become more self-sufficient and less reliant on imports. This can help to mitigate the risks associated with global supply chains and ensure that critical goods and services are available when they are needed.

Finally, developing green import substitution can help Scotland achieve its climate targets. Scotland has set ambitious targets to reduce our emissions. Achieving these targets will require a significant reduction in greenhouse gas emissions from all sectors of the economy. By expanding local production of goods in Scotland, we can create a more sustainable economy and reduce the carbon footprint associated with imported goods.

Iceland provides an example of how green import substitution could work for Scotland. Iceland had to import nearly all of its vegetables due to its harsh climate and limited arable land. However, the country recognized the high cost and environmental impact of importing food, and decided to pursue a strategy of import substitution to increase its domestic production. It used what it had available to it, geothermal energy, for greenhouse agriculture. Icelandic farmers are able to produce tomatoes year-round, despite the country's cold climate. This reduces the need for energy-intensive heating systems that rely on fossil fuels.

READ MORE: Shortage of tomatoes widening to more products and likely to last ‘weeks’

To develop green import substitution, Scotland will need to take several steps.

First, Scotland needs to fill the critical gaps in it's inadequate statistics. Under the powers we have now, we can create a Scottish Statistics Agency to accurately collect data on our trade and industry, so that we can develop policy more effectively. For example, Scotland could identify which goods have a high carbon footprint and are currently being imported, then we would develop a plan to replace these goods with locally produced, sustainable alternatives. This could involve providing funding and support for local businesses, creating incentives for consumers to buy local, and investing in research and development to develop new sustainable products.

Second, Scotland needs to invest in infrastructure to support local production. This could involve building new manufacturing facilities, developing renewable energy infrastructure, and creating a skilled workforce to produce sustainable goods. By investing in infrastructure, Scotland can create a sustainable production ecosystem that supports local businesses and reduces its carbon footprint.

Third, Scotland needs to work with international partners to promote sustainable trade. Scotland can collaborate with other countries to develop sustainable supply chains and promote sustainable products. We can't expect Scotland to be all things for all people, but we can take a realistic approach to our existing industry and resources, building on our strengths.

I hope to see our future First Minister – be it Forbes, Regan, or Yousaf – develop an industrial strategy which centers the importance of green import substitution. This isn't just an idea which would be popular with party members, it was a recommendation by Scotland's Climate Assembly. That recommendation has thus far been ignored, all it needs now is a champion to take it forward.