Good morning. Welcome everyone to the third meeting of the Net Zero Energy and Transport Committee. Before we begin, can I remind everyone that social distancing measures are in place across the campus and in committee rooms? So please observe these social measure distancing measures when entering and leaving the committee room. I welcome Collette Stevenson to the committee. Item 1 of the committee agenda this morning relates to declarations of interest. Collette is here as a committee substitute for Natalie Don, MSP. For agenda item 1, can I ask Collette to indicate whether she has any relevant interests to declare? Thank you, convener. I'm delighted to be part of the committee, albeit on a temporary basis. However, in terms of any relevant interests, the only one that I will declare at the moment is that I'm currently a councillor for South Lanarkshire Council. Today's main business at committee is an evidence session in relation to the Just Transition Commission. Before we hear from our guests, the first item agenda 2 is to agree consideration of agenda items 4 and 5 in private. Agenda item 4 is consideration of the evidence session that we will hear, and item 5 is consideration of our approach to the scrutiny of a legislative consent memorandum on the UK Environment Bill. Are we all agreed? That is agreed, items 4 and 5 will be taken in private. The committee will now take evidence from two former members of the Just Transition Commission. This evidence session is an opportunity to explore the main findings of the commission and seek views on the next steps for the Just Transition agenda and the objectives towards net zero. I'm delighted to welcome Professor John Ski, former chair of the Just Transition Commission and Professor of Sustainable Energy Centre for Environmental Policy, and Dave Moxham, former member of the Just Transition Commission and Deputy General Secretary of the Scottish Trade Union Congress. We are delighted that you could both take time out this morning and join us, thank you very much. Broadcasting will operate your camera and microphone, so there's no need for you to do anything on your end. Professor Ski, I understand that you have a brief opening statement before we move to questions, so I will hand over to you. Thank you very much. I appreciate the chance to meet the committee. Net zero by 2045 is an incredibly ambitious target, and that means that how you get there is also very important. The justice part of the Just Transition concept is really important for a principled reason and a pragmatic reason. The principled reason represents the kind of country that Scotland wants to be, but, pragmatically, we will not get the buy-in for net zero by 2045 unless people are bought into it and are given a chance to lead and give a sense of direction. It was a great privilege to be invited to chair the commission, and I would like to pay tribute to my fellow commissioners, who certainly have strong points of view on particular matters, but, honestly, people worked really well together. They strove for consensus right from the beginning, so every word of the report that came out was bought into by every member of the commission. It was very much a consensus exercise. One other point that I would like to make just to open it up is to say that COP26 is coming up. What Scotland has done with Just Transition has caught a lot of international attention. I have been doing presentations in Brussels, Scandinavia, Switzerland and the US. Scotland has perceived to be quite world-leading. It has caught a lot of attention internationally, which is worth bearing in mind as we go into COP26. That creates questions about expectations management. In some ways, the Just Transition Commission 1.0 was the easy part of the job. The big challenge now is delivery and actually making it happen. Obviously, the fact that Richard Lochhead has been appointed as a minister for Just Transition is a very important first step to pull that together, but how that is made more concrete in the future is going to be very important. I will finish my opening remarks. Thanks very much, Professor Skeith. That is a very useful introduction, and I am sure that you have covered a number of points that members will want to pursue in questions. Let me kick off with the first question. As you said, there has been a significant amount of discussion around the need for the managed transition to achieve net zero climate targets in Scotland. The Just Transition Commission issued a series of general recommendations to the Scottish Government in March of this year, setting out four key messages. We have the programme for government being announced this afternoon. We do not know what is in the programme for government, but what specific actionable policies and plans would you like to see being implemented by the Scottish Government over the next two or three years that will really address and take us towards net zero? In your answer, if you could touch on some of the key sectors, the economic sectors that you think need to be prioritised, that would be fantastic. Perhaps Professor Skeith, I can start with you and then turn over to Dave. Our first set of recommendations were about the importance of a planned transition on the basis that an unplanned transition is likely to be an unjust one. I think that one of the key recommendations was the notion of planning at the sectoral level to make sure that everybody, both employers and employees who are affected by stakeholder groups, understand which direction that you are actually wanting to go. In terms of the sectors that are an absolute priority, I think that it would be hard to ignore the question of oil and gas and the issue around the north-east as a key issue, which Dave may want to come in. That is going to be very, very important. Many members of the commission were also struck by the challenges in the rural economy and the land sector and agriculture, not just the industrial part of it, where there are some very big challenges there. I have had the chance to speak with the cabinet secretary for the rural economy as well in the past few weeks. I think that that is recognised as a very particular challenge. One of the other things that the Scottish Just Transition Commission did, which is not so common in other countries in the world, is to focus on the consumption side of the economy and the consumer end as well. We have to be very aware that some aspects of the transition to net zero need paid for. The way that the costs are going to be distributed is going to be incredibly important as well. That was our fourth area of recommendation lying about who bears the costs and where does the burden fall. Of course, there are many opportunities, but it is not all just burden. There are opportunities as well. Thank you very much for that. Dave, I noticed that you wanted to come in on that as well. I thank the committee for having me. I concur with all the content of Jim's introduction and his answer to your first question. Jim is right that we need a road map or a set of road maps that are cut across every major sector of the economy. In an example would be a plan for energy just rather than a plan for oil and gas. Some of that is mirrored already in action being taken by government. Within those sexual plans, particularly when we come to see some of the peak players, we also need an expectation. Again, that is happening to some extent in industry, but it needs to happen more quickly. We need to see a subsexual level, adjust transition plans from individual companies. At every level, the Transition Commission is very clear about that. There needs to be a seat at the table for workers through their trade unions, but also fundamentally for effective communities, particularly where transition may involve regional inequities. It is hard not to concentrate on the three or four high-emission sectors. There has been some progress, although there is still a particular progress to be made on energy, but we have to recognise that both in buildings and heat and in transport, we really have not got off the mark yet. In both of those two-piece sectors, we will need to see some immediate and swift actions. We saw a good example from the Just Transition Commission's perspective of movement on ADLs under Dennis Buses. We need to roll out quickly some of the retrofitting strategies, we would argue, from the SGC perspective through the public sector, but at the same time not lose our eye off some of the longer-term developmental opportunities, the areas where potentially in sectors we still have first mover advantage and some of the developing technologies, particularly in oil and gas. There is an awful lot to do, but it is very much a question of what we can do quickly and effectively early, whilst not losing our focus on the long-term developmental opportunities in St Keith's. You touched on a number of points that my fellow committee members will pursue. One area that I wanted to follow up on was the massive retraining and skills that will be required to equip the workforce for the future trends in that area. That is one of the four key mysteries, one of the bits of advice that you gave to the Government earlier this year. I also looked at the STUC report published in 2019 that highlighted that the number of jobs predicted in the low-carbon and renewable sector haven't materialised for a number of different reasons and that domestic Scottish-based supply chains haven't materialised either in the way that was expected. I could start with you, Dave. What do you think we need to do differently? What different policies and actions do we need to take to make sure that the future jobs in that area, technology-driven jobs, are created and remain in Scotland? There is potentially quite a lot there. If I look particularly at the low-carbon and renewable sector, what is clear—this goes back further than any current Government—what is clear is that there hasn't been a manufacturing and industrial plan to go alongside decarbonisation. We are, frankly, in last chance saloon when it comes to some of the sub-sectors within, for instance, offshore wind. We still believe that it is possible to retain and promote the manufacturing and construction part of offshore wind expansion, but we really are in absolute last chance saloon. That is one area where roadmaps that we talked about and those sectoral plans are absolutely vital. In our view, it will involve Government intervention and support, similar to but, hopefully, more proactive than the situation at BiFab. It will also require changes at the UK Government level, so we are waiting for the outcome of the contracts for difference consultation, which is taking place at Westminster. We are very hopeful that the outcome of that will be an ability for Government at the end of the day as part of the purse string holder to dig into far more detail about how the delivery of 60 per cent content in offshore supply chains can be delivered on the ground. As part of that, action at a UK level, the introduction of a road map and a sector plan in Scotland, to bring about a realisation and a buy-in from some of the big corporate players about what the expectations will be of them in the decades coming as we develop our offshore capacity further. I realise that I am taking up quite a lot of time, but just to touch on the skills recommendation within the Just Transition Commission report, I mean this skills guarantee, we think, is absolutely vital. It provides at the base level of some level of security for workers who are currently being asked to consider transition. We think that there is significantly more portability of skills than the system currently is affecting. The other side of that is regulation. You will rarely hear a trade unionist talk about less regulation, but there can definitely be some smarter regulation in areas such as health and safety certification for offshore oil and gas workers as they move and transition to other energy sectors. Thanks very much, Dave. Please feel free to make your answer as long as you think necessary to address the issue, and you raised a number of really important points there. Professor Skea, I would like to bring you in on this question as well. Thank you. Yeah, I mean, I very much agree with all the points that Dave has made. I think to deliver on this. I mean, there are two sides to the question, and Dave has rightly mentioned at the UK level the contracts for difference mechanism and the way that that has not helped us in the past and the way that it is operated. Just to flag that, even if it is reformed to some degree to help to deliver better on local content, there still will be competitive tensions in that kind of process. It is very important that Scottish yards and Scottish enterprises are in a position to bid successfully into the kind of competitions that come along, which is where all the skills, the retraining, et cetera, are going to be really important and investment in the facilities. One thing just to add on the sector plans—this is building a bit on the experience that I had when I was a member of the UK Committee on Climate Change, you know, developing advice for Scotland—the importance in planning of developing milestones and targets that are ownable by specific people to take it through. If you look at the more procedural kind of recommendations that the committee made, I mean, obviously the first one for a minister for just transition has happened, the second one was that we recommended that there was a continuing need for advice and scrutiny of Government's progress, and that is where benchmarks and measuring progress against benchmarks and providing that kind of scrutiny, I think, can help to move you in the right direction, so that there isn't really an opportunity to take your foot off the accelerator. You need to keep working on these things and have milestones to work against. Thank you very much. Let me bring in Fiona Hyslop, who I believe wants to fill up on some of those issues. I want to focus on industrial transitions. I thank you for the work of the commission and indeed the national mission report and the fact that this is the second meeting of this committee that we wanted to hear from you, I think, as evidence of the importance that we place on just transition. You've talked about the sectoral approaches and we know that the 2045 target is going to be tough. The 2030 is even tougher. You've talked about tensions and we know that, to deliver on some of those targets, focus on one sector, as opposed to another, it may be an imperative. How do you see that sectoral approach bearing in mind that you are calling for just transition plans in each of the sectors and what would your advice be in trying to make sure that we raise the game for all sectors but at the same time try to meet those targets? I think that it's really important to keep reminding ourselves that there is no single answer or no single sort of technique or sector that's going to get us to net zero by 2045. It absolutely needs action right across the field, meaning that no sector can kind of miss out on it. In terms of picking out individual sectors, it's a question of which ones you need to work on urgently because they're facing big challenges now. Oil and gas in the energy sector is the obvious place to start, but unless we do transport and other aspects of it, unless we do buildings that are incredibly important, we are just not going to get there. You just look at the numbers that the UK Committee on Climate Change included. What would net zero in Scotland look like in 2045? We're basically looking at emissions from transport and buildings being eliminated by that time, and that just gives you a sense of the level of ambition that is needed. There are big opportunities there. The building sector shines out as one in which there's a triple win in dealing with fuel poverty and getting emissions down. Also, if you go for deep retrofits of buildings, you are going to need to upskill workers to try to get the measures in. We shouldn't leave them aside, and we don't have time to leave them aside. With the 2030 target, as you rightly pointed out, that is almost more ambitious than the net zero by 2045. Nothing needs to be left off the table. One thing that the commission did debate a bit when it was working up the recommendations was whether there should be an overall economic plan for net zero by 2045, or whether you started building it up from the bottom-up sector by sector. We decided to make the recommendation based on sector by sector plans because we thought it would take too long to get an economy-wide plan together and then have a trickle down to individual sectors. We were very keen on the idea that we got on with things where the obvious actions needed to be taken. The energy sector has been emphasised for that reason. We know what needs to be done there, so let's get on with it. Some of the other sectors are going to be a bit more challenging, but that doesn't mean that we leave them to one side. Can I ask Dave Moxham and then Professor Skill who might want to come in on this? I know that other colleagues want to come on to specific sectors, but I am interested in the how and the delivery. If we are going to do particularly skills and re-skilling as central to this, we have gone through an experience over the last year where we have probably had unprecedented work between unions and employers in dealing with the pandemic. That approach of trying to bring employers and unions together to try and tackle that and to come up with skills transition strikes me as something that could be very positive. In terms of the idea of the mapping of different skills and different sectors, a lot of skills and retraining is very individualised now. There are a lot of private providers that do that on an individual basis and responsibilities for individual workers themselves in different sectors to do that. How do we do that on a collective basis? Particularly looking at some of the, dare I say, that there are interests and understandably historic vested interests and some of that protection of the standards that are required in different sectors to make sure that we have the high standards to work in very quite often very challenging circumstances. What is your advice as to how we can make sure that as part of these individual sector transitions we can try and make sure that skills and skills retraining is developed in a way that is meaningful, bearing in mind that it looks as if there is money there and there is resources there in this commitment, but it is the how and the delivery. If I can ask Dave first and then if he can come to Jim after that. Thanks very much indeed, Gona. Part of my answer is slightly repetitious in the sense that I think that we need company level just transition agreements and skills should be an integral part of that, so we do need employers to step up to the play. I do not personally believe. You are right to point out that there is, to a degree, a bit of individualisation of the skills offer and there is quite a varied geography in terms of the commitment of different employers to delivering on workplace skills, but I do think that with the growing imperative, with the expectation that major employers will have a role in their individual transition plan and also the sexual plan that the architecture is there to do it. I am not sure if this was your interpretation. It certainly wasn't my meaning to suggest that there should be any downgrading of necessary skills or qualifications. I just think that at the moment we are missing opportunities in terms of potentially creating the type of skills training that is suitable for people who already have a significant number of the competences that are required and will require top-up. I also think that this comes a little bit back to your former question about which sectors and when that we need to align our skills delivery to specific government and industry investments in specific areas. Jim spoke quite rightly about deep retrofit. The only issue with deep retrofit is how fast can we go because of the available capital spending opportunities and the revenue situation? There are very few people anywhere who would disagree with the idea that deep retrofit is going to be necessary as quickly as possible and to as much scale as possible. The idea that seems to be there is to make an ambitious, although it would necessarily need to be a realistic commitment to work in that sector, to assess the current skills that are out there, the skills that are needed and to ensure that we have a really well-dovetailed approach to how those skills are delivered with a combination of those being at a workplace or college level. For me, it is about ensuring that the skills plan fit with the sector plans and that we are ambitious but realistic at the same time of what that will look like over the next four or five years. Dave is much better informed on the detail of this type of issue, much more informed than I am, but maybe just one general kind of observation. A knowledge-based net zero economy is going to have a much larger of resource put into training and re-skilling than we have probably seen in the past. You mentioned the issue of vested interests in your initial question. It is incredibly important, as it were, to bang heads together in terms of the bodies that are providing the training and doing the certification and bringing them together, almost the sectoral plan for trainers, so that they have an idea about what the big prize is in terms of a net zero economy and do not focus on trying to protect particular areas of interest. Having that larger scale idea of what we are trying to do in terms of shifting the economy would be helpful in bringing together the people that are providing that training and certification. I spent two years as president of the energy institute that does a lot of that kind of activity. Bodies like that are beginning to grasp the idea that you need to look at skills right across the energy sector, not have oil and gas skills in one place and renewable energy skills someplace else, because so many of the skills are transferable and there are artificial obstacles at the moment that need to be overcome. We can explore that a bit more if you want to follow up. Liam Kerr has a supplemental in this area. Just very briefly on that line of questioning, if I may, because Dave talked about college. You mentioned college in passing. There must be a requirement for specific courses to aid any transition and, furthermore, for lecturers to deliver them. It seems to me that that needs to happen up front, because in order to drive a transition you need those courses to be being delivered and for people to be coming out of them. Is there any evidence that that is happening at the moment that those courses are coming in place and that there are the lecturer skills being put in place to deliver them? Or is it stalled waiting for a plan on what a transition looks like? If so, doesn't there need to be some action taken very quickly indeed? You have tempted me into the answer, which is towards the latter part of your question, which is that we need significant action in the college sector, which includes funding and alignment. We recently published a green jobs report, but I am happy to furnish to the committee whether it has not had the opportunity to see it yet. What makes it absolutely clear is that there is an enormous array of potential choices within most of our high-emission sectors about what we do next. Yes, some of those decisions, both in terms of the scale and direction, are going to need to be taken now. That is, in my view, the information that the college, the further education sector in particular, but obviously the university sector too, is going to need to have. The easy answer to the question is that both things need to happen at once, but if you are offering me a chicken or an egg, then for me the chicken is some of those strategic sexual decisions about where investment is going to go, where we are going to be putting our R&D and where we are going to be introducing quicker, more what you might call shovel ready projects, which are going to need a swift response from the training sector. It is hard to speak specifically about that, but as part of the Just Transitions Commission's work, we looked in some detail at the offering of various colleges. We were over in Central College, which is where Grangemouth sits. That is not too far away from places like BiFat. We are going to need a clear road map of what the intentions are for a Grangemouth. If the college sector is going to be in a position to respond to the transition skills needs that are going to be presented by such major industrial areas with currently very high emissions. Thank you very much for that. Let me bring in Mark Ruskell to be followed by Monica Lennon. Thank you, convener. Good morning to you both. I was really pleased to see the Just Transition principles embedded in the climate act. I am pleased to see that the commission set up as well, although not on a statutory basis. There is perhaps a concern that, going forward, Just Transition is interpreted in the same way that sustainable development is interpreted. In other words, there are a thousand different flavours of it, whether you are sat on the board of an oil and gas company or whether you are in a community affected by a major development. You will have a very different perspective and a very different point of view. Does it come back to whether you think that Just Transition and the work that you have started can deliver a real systemic change that is required or whether it is still predominantly about mitigating climate impacts? It is about building more efficient kit. It is about putting in carbon capture and storage onto existing plants rather than making a wholesale change. Is it interesting to get your sense of where the discussions are about Just Transition and, perhaps more importantly, who is leading those discussions? If I could come in on that first of all, there is a big risk that the words Just Transition are used as a kind of magic dust that you sprinkle on net zero policies to make it seem socially and economically benign. We really have to move it beyond the generalities. One of the big challenges that we have is that Just Transition does not trip easily off the lips of ordinary people. We had surveys done of oil and gas workers, for example, to ask how many of them had heard of the idea of Just Transition. It was a very small number, which is why we would also want, in terms of communicating the idea of Just Transition, to talk about concepts of fairness and not unburdening people unfairly. The word fair is incredibly important to make it more general. I think that we are at quite a critical point in this, because we need to move it on from the principles and the generalities on to making it practical. We were asked by ministers to come up with realistic practical recommendations. We took that very seriously. There is only so much that we could do in the first phase of the Just Transition commission, but the next phase is absolutely essential to make it concrete and specific. I mentioned the idea of sectoral planning targets for individual sectors to which people could be held accountable. Unless that kind of thing is done, it is not going to move us on. I am spending a lot of time internationally as well, but the concept of Just Transition has got quite well embedded. The IPCC report that I am currently working on has plenty of recommendations of Just Transition, including the occasional reference to the Scottish Just Transition initiatives. It is beginning to catch fire internationally, and there is a committee of the convention on climate change that looks at Just Transition, though not in that kind of language. We are very much in the early phases, but I think that the idea is beginning to catch fire a bit. I hope that the work of the Just Transition commission has helped it on, not only at stating general principles, but at giving it some practical implementation dimension to it. We have had the Grangemouth Future Industries Board. That is one practical example of where there has been a conversation, predominantly led by the industrial cluster there, rather than the community itself. I am wondering what your views are on how we roll out Just Transition plans for individual sectors in individual communities. You will be aware of community concerns in Mossmorran, for example, around the ethylene plant there. Perhaps there is a different context to Grangemouth in that that conversation is being led by the community itself rather than the operators who seem to be reluctant to have a discussion at all. It is a very different starting point, but how would you see a Just Transition plan, for example, working for that particular site, which is the third-biggest carbon polluter in Scotland, as compared to what you have had with the Grangemouth Future Industries Board, which has been very much corporate-led, corporate-driven? Without ducking out of it, I think that Dave may be in a better position to answer that. I am trying to read Dave's expression to see if he is willing to pick that one up. At the core level, and it may seem fairly simple, but as you identify your question, it does not always happen. Three parties need to be at the table, which is that the workers affected, the community affected. One could argue that, if one includes Government, obviously, the company is affected too. That should be the absolute and core criteria. No company, no cluster, who is considering and agreeing a Just Transition plan, should be allowed to do so in any form of Government support that it proceeds to, whether that is direct funding, whether that is planning support or skills support or all the range of different levers that Government has. None should be required to have a plan and none should be able to develop and state that they have an agreed plan unless both those employed and the community affected are significantly part of that discussion. As we all know, the way in which consultation and genuine empowerment is as important as the fact that it appears to have taken place on the outside. We are not talking about quick community surveys or one-off meetings between management and union. We are talking about deliberative processes where all voices have looked to the table and, in my view, where sign-off should be required from all parties. That would be a fairly fundamental change, but I would argue that it is a necessary change. Some of those things need to happen at pace. However, to return to the conditionality point, those should not be considered to be good practice additions. Those should be considered to be absolutely fundamental to the on-going relationship between development agencies, Government, local authorities and the employer. If all the assistance that is provided through the public sector such companies are going to continue to be delivered. Were the community and unions involved in the Grangemouth industry cluster? No. One of the major concerns in our recent report was that that did not take place. It is a fundamental miss. I think that Mossmorran is a really important example here, Mark. The perceived needs of the workforce and the perceived needs of the community may not be the same in their situation. There may be some similarities in position between the company and the workforce. Those are the hurdles of just transition. Those are the meat that we need to get into. Those are the problems that we need to resolve. However, in the case of Grangemouth, the difficulty of the previous industrial relations is avoiding tensions between communities and employers. It may be the easy route, but it is not the just transition route. It does not get us anywhere to ignore those stakeholders. To return to the premise of your original question, otherwise just transition is just a word. If just transition is not hard, friction, giving and difficult at times, then it clearly will not be doing its job. If it was an easy answer, we would have found it already. Thank you very much, Mark. Monica Lennon, please. Thank you, convener. Good morning to Dave and to Jim. Last week, we heard from the Climate Change Committee and we have been looking at their recent carbon budget, which highlights the needs for significant investment in order to reach net zero. While CCC modelling shows savings in surface transport and energy production, there will also be costs in areas such as homes and industry. I am interested to hear your views on how that can be managed and mitigated to spread the costs and benefits fairly. In particular, how we can make sure that everyone can afford to make their home energy efficient. What I have taken from today so far is that a just transition has to be principled, but it also has to be pragmatic and practical. I am interested to hear your views. That really gets to the heart of the matter. It is fair to say that the bulk of the expenditure that has taken place so far on decarbonisation in Scotland and in other parts of the UK has been paid for by electricity consumers effectively. It has come through electricity bills and we have made the case in the Just Transition Commission report that that is regressive. It means that the costs are following on higher on particular groups of people, for example people on lower incomes or people who have to use electricity as their form of heating. My personal view is that it needs a much bigger exploration of how that is paid for, whether general taxation or spreading it more evenly across other forms of energy would be fairer. Of course, we may have an announcement on national insurance this afternoon that has other kind of regressive implications. I think that addressing that, the year that who pays better, and to care thinking carefully about what the mechanism is, is going to be important. I think also worthwhile saying that you need to think about different groups. Scotland has done very well in terms of social housing, for example, in terms of improving energy efficiency, where there is a kind of a clear public sector mechanism for making sure that funds are directed in the right kind of way. There are also mechanisms available in the private rented sector, for example, when tenants switch over using regulatory means to try and get things switched over. Frankly, the most difficult sector is going to be the owner-occupied sector for housing, where you are asking everybody to come up with their own amount of money. We have said that, if people can pay, they should pay for it. There are differences there. How we get the incentives to work fairly is going to be good. My own view is that, for example, grant mechanisms such as grants or very low-interest loans are potentially the way that will encourage owner-occupiers to switch over, where you do not have the kind of regulatory levers that are in place for either social housing or the private rented sector. I do think that that is going to be the toughest one to move it, because you will be expecting to, to some extent, people to reach into their own pockets to finance the transition. There is a bit of an elephant in the room here. Understandably, beyond recommending the marshalling of public and private resources and recognising the need for general increased investment, I guess that the Justice Transition Commission does not go as far as the SGEZ certainly goes. We are not even in the right ballpark at the moment in terms of the levels of public investment that we need. That is an easier thing to say than it is to suddenly magic up the type of investment that we are going to require. We really have to start from the position that we need massively increased public investment. Some of that is possible in Scotland, some of that would become more possible with increased borrowing powers and a lot of that would become more possible if we had a more, if you like, a Biden-style approach to investment at a UK level, but that is going to have to happen. Whether we take that political decision now or in a few years' time or as things get more acute, that is going to have to happen. At the point that public investment increases, which brings with it an increased level of capital debt, we are going to have to work out how we sustain that. The SGEZ argument is fairly clear. We see enormous opportunities for economic growth and that growth would obviously fund an awful lot of that indebtedness. However, when it comes to the specific of your question, who pays for the elements of that transition that are not paid for by general growth, then that has to be a matter for general and progressive taxation. We are at the end of the point, and Jim got pretty close to agreeing with his position. We are at the end of the point where, certainly when it comes to bills and bills that are spread across areas of fuel poor Scotland that they can be sustained by the consumer. Part of the whole message of the Just Transition Commission is that this is a national mission. The national mission has benefits that far outweigh the benefits of an individual householder receiving lower-few bills as a consequence of a retrofit programme. We would like to use retrofit as an example, although it is not the only one. We would like to see standard, municipally delivered retrofit. I am just about old enough to remember in the 1970s when we shifted over a couple of years from non-natural gas to natural gas, which meant millions upon millions of boilers being converted. That was a national mission undertaken by a public company. I have never seen the analysis of how well people think that went, but it certainly worked. That is the level of intervention that we are going to require. When it comes to private householders, I tend to agree with Jim, I think that we need to be as generous as we can be as a society in incentivising, through grant and other mechanisms, people to undertake that. It can be a harder thing to fix where the state is not necessarily going to be paying for the whole of retrofit. To return to my original point, there is a real scale issue here. I can understand why Governments shy away from that, including in Scotland, because not necessarily all the levers exist, but at some stage someone is going to have to stand up and say, this is going to cost a lot of money and it is going to have to be funded by the people who are going to afford to pay and not those who cannot. Sticking with your point, Dave, about this has to be a national mission. We did touch on the role of the private sector and the role of corporations last week, but how important is it for the public sector to show leadership? To give an example from the weekend that was reported in Scotland on Sunday, that some of the venues that will host COP26 have some of the worst performing buildings in terms of energy efficiency. The Armadillo, for example, has got a rating of F. There could be some good reasons why they have not been able to put in place the improvements that they have been asked to do, but if it is really, really hard for big venues like the Hydro and the Armadillo design centre, what chance do low-income households or small businesses have? How can we mobilise public sector expenditure and what would true leadership look like from the public sector, both in terms of decarbonising buildings but also circular procurement? I do not know who wants to go first, I will let you decide. My microphone is turned on, so I go first. It is absolutely important to me that the public sector has an absolute obligation, I think, to lead by example, because it is a national mission. However, as it were, the ringmaster or the ringmistress is a Government, an hero, in trying to pull us all together and take it forward. Unless you are leading from the front on it, it is not going to work well.  Energy efficiency of buildings is a very important one that the public sector can lead by example. The question of procurement, if you are using vehicles, for example, making sure that they are electric or whatever, that kind of thing we would work well. We did recommend a fleet of electric buses, as I recall, for COP26 in our green recovery report, for example, as a way of providing an example. There is also the issue around, for example, pension funds, public sector pension funds and their investment policies, which is another area in which I think that the public sector can be seen to lead by example. If I might, could I just go back to your previous question and just follow up on one thing that Dave said? We are all getting too many grey hairs and remembering when we are moved from town gas to natural gas. The big difference then was that there was one national company that could go in and do it street by street. Now, if you go into a street, you have different energy suppliers supplying every different residence. Frankly, as we have seen with the smart metering campaign, that is not the effective way to go about it. You always need street by street neighbourhood by neighbourhood approaches to make it work. I think that that needs a lot of attention. If you are going to get the speed and the pace of change, we need to think about how that is arranged institutionally as well, whether it is possible to do it street by street, rather than individual offers to individual households, which is pretty much what we are at the moment. I will just jump in briefly. I agree with the direction of your question and Jim's answer. Public sector needs to be an exemplar here. If Jim remembers better than me—probably not, because it was a long time ago—we did take some evidence during our first year from NHS Scotland, for instance, and plans that they were taking in health boards to bring together coherent and just transition plans, particularly emission reduction plans. Nowhere could it be more important than in the health service, where we are still seeing disproportionate health impacts, both of poverty, generally fuel poverty specifically, but also environmental illnesses because of high pollution. I really think that all public sector areas, but particularly health boards, need rigorous and monitored plans to ensure that building emissions are being reduced, because nowhere is it more important in holistic health and just transition terms than in areas just like that, but absolutely we need the public sector to be an exemplar here. I have just got one final brief question, perhaps just for Dave, to answer in the interest of time. Just picking up on climate change and the health and safety issue for workers, I just wanted to cover adaptation with you briefly, Dave. What does a just transition to a net zero economy mean in relation to adaptation to climate change and resilience? I just wondered, from an STUC point of view, if maybe you could touch on what that means in workplaces and how we can make sure that workers really have some influence in terms of the changes that we need to see happening. I think that it's a really important area, and thanks for the question. It's one that doesn't tend to be covered, because I suppose for understandable reasons, we think about the jobs that might be lost or created as a consequence of the transition, rather than the ones in which you use a term that you use might be adapted, but there's a whole area out there in terms of going from workplace resilience in the context of climate change. This can be workplaces that are already feeling the impact of weather change, all the way through to jobs that, while they might not be classically understood as climate jobs, are the sort of jobs that can be made green or simply by their function, they can aid the process of decarbonisation. I'm thinking in terms of local work here, localised childcare. We really shouldn't think of any job as not being, in some way, impacted by climate change and, in some way, able to contribute to climate reduction. What are those workplace measures and how can employers—obviously, we would say unions or groups of workers who are not yet unionised—work together to do that? That can go all the way from union-agreed travel schemes to travel-to-work schemes. We're already reasonably aware of cycle-to-work schemes, which, for instance, we think could be made more accessible to lower-paid workers. There's a whole suite of policies that are about consumption even before you get into the workplace. There's a whole suite of skills that workers can learn but are best adopted and taken up if they're being delivered by unions and employers together, which go towards potential decarbonisation of the workplace itself. I bet every single one of us can think of one example where we could have done something that was more carbon-friendly in the workplace. The Just Transition principle extends to this. Messages tend not to be very well received if they're sent down by dip-tap by the employer. They're far more likely to be accessible and bought into if they're agreed at workplace level. If the skills and support are necessarily the time off to train is part of a workplace agreement, there's an enormous amount to be gained from what you might call the softer side of Just Transition, where a job is not necessarily a job that is disappearing or being created but a job that might be being adapted. The Just Transition principle is absolutely fundamental in that kind of adaptation area. Thank you. We'll hopefully see more unionised workplaces. No further questions from you. Thank you very much, Monica. I believe that Collette Stevenson has a supplementary question in this area. To Jim, you touched upon the pension schemes and the local pension funds. I suppose I should declare an interest as such, because I was previously the chair of Strathclyde pension funds. As a member of that previously, we had a fiduciary duty to ensure that we were maximising the member's pension pots. Arguably, as well, you've got the ethical investment element of that. I know from Strathclyde pension funds that we're probably at the 12th biggest in the UK, but looking at that going forward, how do we balance that? Is that something that you've maybe looked into further and seen how we can actually transition over so that those pension pots are more ethical? That's a great question. I have to say that the commission did not get the chance to go into that kind of issue in depth, so it's a bit of a high-level appeal. One observation from listening to colleagues who work much more in the financial sector is that it's not necessarily the case that an ethical investment will provide you a poorer return than a standard investment at the moment. You might well be better placed to put your money in a renewable energy company or funds that focus on renewables rather than, for example, the oil and gas sector at the moment. I think that it needs a long, hard look to see whether the question that you have to do a trade-off or whether investing in a future low-carbon economy will provide a better return for the people who are paying into the pension fund. I'm a member of a public sector pension fund, and I know that this is a very large item of debate in the university's fund at the moment. I was also on the board of a renewables company that the university's superannuation scheme paid into, and I have to say that they got a pretty good deal out of it at the end of the day. Good morning and thank you, gentlemen, for coming along today. My questions will be based on the roundabout fossil fuels, if you don't mind. I probably won't be a big surprise to say probably more about the oil and gas industry. Professor Scaer said that it will be a key issue going forward, and I totally agree with you. I ask you both what role do you think that there is for the oil and gas industry in a just transition, and do you think that there should be further investment in new oil and gas projects? That's the big question that's facing us all, I think. In terms of oil and gas companies, there's a very obvious point that a number of them out there are trying to rebrand themselves at the moment, start oil becoming equinor, all that kind of thing. For me, the point to emphasise is what are the skills and competences inside the oil and gas sector at the moment that can be redeployed towards assisting you towards a low-carbon economy? The skills of the oil and gas sector are very good at getting corrosive liquids and gases through pipes. They're good at managing the geology under the surface, and they're good at managing big, complicated, risky technical projects. Those are things that are going to be needed as part of a low-carbon economy. If you're thinking about things like moving towards hydrogen clusters, that's an area in which the oil and gas sector has competences that can be applied. If you are going to capture carbon and store it geologically, the only companies at the moment that have the skill to do that and have the ability to monitor it, as, for example, the former start oil did with its field in the Norwegian sector in the North Sea, they're the only companies that can do that. I think that they have that kind of role to play. To emphasise the rebranding of the oil and gas technology centre in Aberdein, for example, which has moved much more to energy, it's a signal that that sector understands where it wants to go. I was very struck by something that came out just yesterday. It was a joint article by Fatih Barol who leads the International Energy Agency and the Iraq Government, actually coming together with the Iraq Government acknowledging that the age of oil and gas will eventually be over and thinking about how OPEC countries may need to move over. On the second part of your question, the future of oil and gas, and those are very much personal views, but building on my experience with the Intergovernmental Panel on Climate Change, even in scenarios where we limit global warming to one and a half degrees, there is need for some new oil and gas in the system. Quite clearly, for prime light vehicles, electrification pretty much appears to be the way to go, but we still need oil, we'll need it longer for heavy duty vehicles, it will be needed to some extent for aviation, there's petrochemicals, lubricants, et cetera, so there is oil needed in the future even in low emission scenarios. The difficult question, of course, is who will be the lost person standing in supplying that oil as we move out of it. That is the much more difficult and interesting question for me, which, of course, is the current question that we have in Scotland and the UK about the position. Globally, we still need some more oil and gas. For me, the critical question is who's actually going to be supplying it. Can I ask Dave Moxham a question? Dave, you were mentioning earlier about smarter regulation and safety. I took that to mean in the North Sea, was I correct? If so, could you maybe delve a bit deeper about what kind of things we could be doing smarter moving forward in regards to safety? It's more the accreditation of safety courses and what is required for an individual to qualify for a safety regulation within the new industry. The example that we were given during the just transition commission's deliberations was of deep-sea divers within the offshore oil and gas sector, who were being required to individually pay £1,500 to apply their trade in the offshore wind sector. Now, what was being put to us was that, as you can imagine, the qualification levels that are required of somebody who dives at the kind of depth in the pressurised circumstances of somebody who services an offshore oil and gas installation are probably far in excess or certainly aren't exceeded by what is required for a similar but not-so-testing function when it comes to offshore wind. The individuals were still being required to pay £1,500 in order to gain a new accreditation for the specific sector, and their position was that, as I say, in terms of the whole range of health and safety competencies, knowledge, high degree of medical proficiency, because you could have a couple of people hundreds and hundreds of feet under the water together in a pressurised circumstance. Basically, there was a complete mismatch in the requirement to pay £1,500 and get this new certificate where all the competencies already exist. That was a fairly sharp example of what is being put to us as the need to redo a course to gain an accreditation. Very often, at the cost of the individual, which goes a little bit back to the question that Ms Hyslop put about the individual nature of the skills offer, there seems to be a systematic job that can be done to make that portability more efficient in terms of how it is certificated. Moving forward, what do you think that the Scottish Government should do to make sure that opportunities and skills are delivered in time so that the carbon-intensive sectors do not face an economic downturn and are not behind the competition from overseas? I think that that is one of the major issues that I am hearing in my constituency. I think that this might be one more for Dave than for myself. Sorry to pass it over, Dave. The problem is that we are already behind the curve. We are already seeing significant job losses in offshore oil and gas. It is worth mentioning that, although, if one uses whatever trajectory one uses, the oil and gas industry is like 2035 projections or if one sees the decline in offshore oil and gas being steeper than that as a consequence of market developments and Government decisions, even with the significant fall-off in overall numbers, there will still be a significant number of people coming into offshore oil and gas because of the demographic of the workforce. Even though numbers will fall, the oil and gas sector still needs to recruit significant numbers of people. There is some evidence that that is already providing a difficulty because incentivising young people to move into an industry that they do not necessarily see as having a lifetime job guarantee for them is something of an obvious and sensitive. One of the really important things now is to align the skills offer with the development trajectory of what we think is going to happen with offshore oil and gas and where it is going to transition to. A job in offshore oil and gas today does not have a future in the development of CCS carbon technology or hydrogen. How likely is it and in what way to transfer to being an offshore wind job or various other transition destinations? The real job is to align the skills offer, the skills package and project that because, as I said, the oil and gas industry is still going to need new recruits and project that in a way that people can get some understanding that making the commitment now to offshore oil and gas encompasses a longer term trajectory that might see them in a different place, but still able to apply their skills and gain a reasonable income as a consequence. Thank you, convener. Good morning, gentlemen. I would like to continue along the line that my friend Jackie John Barr has been pursuing because I think that it is such an important one. Jim, earlier on you said that the words just transition are used as magic dust and I understand the point that you are making entirely, but you rightly have gone on to talk about or you have flagged issues in the practicalities. This morning, I was reading a BBC report that said that if Campbell goes ahead, there are 1,000 direct jobs associated with it, 2,000 more in the supply chain and 500 elsewhere in the UK. It contrasts that with the Viking project, which it describes as a vast new wind farm in Shetland being put together by SSE renewables. That would have 35 permanent jobs associated with it. Is there an issue here when we talk about a transition? Is there an issue not only with the practicalities of what can be achieved, but also the realities of a transition that we all accept that we need to make? That is a perfectly fair question, and there are some very hard choices that you involve when making that decision. If I can just refer back to the answer that I made to Ms Dunbar, there is a big question. If the world is going to fulfil the Paris agreement targets, then there will be less oil and gas used in the future than there is now. It will unambiguously go down, and the question is who will be supplying oil and gas in the future. Is it going to come from the Middle East, where it is probably some of the cheapest oil and gas around? Is it going to come from getting the last molecules from mature fields like we have in Scotland? Or is it going to come from emerging nations like Ghana in West Africa, which is struggling with its own transition challenge because it has been hoping to use oil and gas revenue to play for basic economic development there? There are really big fundamental and tricky questions. It is almost a kind of moral choice at the moment. It is a very hard, hard question. You cannot really duck it. Is Scotland sure that we could go ahead and do those jobs, but is that coherent with the position that Scotland is portraying as a leader in terms of climate policy for a small nation on the global stage? I think that that is a tough question, and it lies in the political domain. Us looking at the more technical details of it cannot really provide the answer. It is a political decision, I think. Yes, thank you for that. I listened very carefully earlier on when you were talking to Jackie Dunbar about the move that oil and gas workers can make into other areas. Dave, much earlier on, you talked about a move from oil and gas jobs to other energy sectors. I understand the point that has been made, but where is an offshore chef going to find equivalent paying role as a chef onshore? Where is the helicopter pilot going to fly to without an installation to get to? Where is the crew of the platform supply vessel going to work if the vessel does not have a platform to go to? Where is the roast about going to find equivalent paid work onshore? Those are not roles that readily map on to something like offshore wind. The question then becomes, oughtn't the Scottish Government to be addressing those sorts of questions urgently and talking about what they want our oil and gas workers to retrain into and what green jobs might be available if they are to get the buy-in that you rightly said earlier is required? Thank you very much indeed. I think that there is a fundamental truth or at least an important partial truth to what you say. There will never be the intensity of jobs across the offshore wind sector as there is in offshore oil and gas. We can split that into three or four different components. You have a development stage. At the development stage of offshore wind, this can be everything from paying the lawyers, the surveyors. At this area, there are analogous jobs—I wouldn't say that they are exactly the same, but they are analogous. You then have the construction phase, where, at the moment, in Scotland with offshore wind, we are completely missing out on. However, that construction phase does have crossover with offshore oil and gas jobs. Lots of the people who were formerly working at BiFab are currently working offshore. You then have the logistics and maintenance phase, where there is absolutely no doubt that offshore oil and gas by significantly more jobs that are significantly different and, in some cases, better pay levels than offshore wind will ever be able to do. The first thing to do is to accept that reality when we are talking about transition to offshore wind. We are talking about some jobs in some sectors, but not at the overall level of intensity, which is why we put so much emphasis on the construction phase, without which that situation worsens. We then need to look at emerging technologies, suitable transitions. Some of the offshore oil and gas skills will undoubtedly be transferrable if we can get first-mover advantage in areas such as CCS and hydrogen. However, the final point of your question remains that there will still be functions from offshore oil and gas that will not be replicated in any of the sectors that I have talked about. That is where the non-industry transition and the regional approach to providing alternative, but not similar employment will have to be a factor too. Thank you. A final question from me, convener, if I may. In your final advice, or in the commission's final advice, you recommended that the Scottish Government should develop detailed roadmaps and that workers in carbon-intensive industries will be supported in accessing the skills that they require to transition. The Scottish Government has not yet done so and the funding schemes that have been announced lack detail. Is it important, in your view, to have those details and the schemes in place before the Scottish Government takes decisions that could lead to serious problems for workers in the oil and gas industry and in the north-east, for example? I think that the processes need to work in parallel with each other, because one needs to feed off the other. The sector plans are going to be really important to follow through on, and they must be executed and developed in parallel with the kind of decisions that need to be made. We wait for the programme for government later this afternoon to see what is in there. On the previous question, to add one other point, it is absolutely unambiguously true that zero carbon energy is more capital intensive than the oil and gas activities that we have seen in the past, which means inevitably that the jobs are concentrated in the construction phase. Obviously, lots of jobs can be created if you are building up a renewable sector, but, as you perhaps get to a steady state, the number of jobs that would be required would be going down, because you would only be looking at replacement activity. That is a fact that needs to be faced up to. In a low-carbon world, there will probably be fewer jobs in the energy sector than we actually have at the moment. That is quite a possible outcome. The question for me is—I have mentioned the activities that I have done with the Energy Institute. Every year, it runs a so-called barometer, a survey of its members to look at issues and some of them are related to skills. It is very striking, but for the people and companies who respond to that from the oil and gas sector, they are still far more worried about skills shortages and people coming through for the sector, rather than the opposite problem that we are worrying about. There are all sorts of issues about the age structure of the workforce, the number of new people that need to come in. That is exactly the kind of thing where some proper analysis and planning is needed to really understand what the impacts would be. We did not have the time of the resource to do that within the Just Transition Commission over the two-year period, but it is very important that those kind of analyses are done as we move forward with the Just Transition concept. Mark Ruskell has a very brief supplemental in this area, and then I will bring in Colette Stevenson. Jim, you co-authored the groundbreaking IPCC report into 1.5 degrees. It has really ignited this whole debate. Where do you see oil and gas development? Where do you see cambo sitting, for example? Is that compliant with our need to keep the world under 1.5 degrees? I think that you need to look at the overall global picture. There will be less oil and gas produced in the future under any 1.5-degree scenario, but there is still need for new oil and gas development to compensate for the depletion of existing fields and the fact that there are still residual markets for oil and gas. So, whether that particular oil field is compatible or not is quite a difficult question to address, and I am not sure that I know the answer to it. I am struck by the fact that the oil and gas policy for the UK is to maximise economic recovery from the North Sea, and it is the big question squaring the circle that is compatible with the climate change objectives. With my more analytical hat on, I would want to hone in on the issue of the economic recovery and ask whether, if you take account of the externalities, the climate change implications of producing oil is that particular field still economic? I do not know the answer to that, and I do not think that anybody has done that proper analysis on it, which I think would be the driving question for me. If you take account, for example, the Treasury's guidance that we should devalue in carbon dioxide at about £70 or £80 a ton by 2030, if you factor that in, does that particular oil field still stack up? I do not know the answer, and I do not know if anybody has done the analysis on that. Thanks very much, Mark. Let me bring in Collette Stevenson, please. Okay. Thanks, convener. I am going to set focus my questions on the forthcoming COP26. I suppose that you touched upon it, Jim Merrly, on just transition, that internationally everyone is looking at Scotland in terms of transition. I am going to set a tap into that and see if you can outline some and go into it in more detail. You talked about the just transition principles and how it is played out in the international climate change negotiations today. Are they properly understood, if they have been accepted internationally? Is there maybe some kind of expectation gap there, just to see if you can come in on that? Internationally, the principle has been accepted, though with some pushback from some country, so there has been the typical kind of complicated language. We do not have a just transition committee, we have the Cata Committee of Experts looking at the implications of the implementation of response measures, as what it is clumsily called, because they could not bear to call it just transition. The Polish presidency, when it had it, pushed just transition and made it the central concept. Just transition is mentioned in the preamble to the Paris agreement, but not in the actual agreement itself. I should say that we now have just transition after a bit of struggle. It is actually scoped into the next IPCC synthesis report, so I can show you that just transition is going to get coverage in IPCC as well as in the formal negotiations. The trade unions are one of the major interest groups that go along to the conference of the parties. The international labour organisation that leads on that will be pushing just transition principles. Richard Lochhead and I had a meeting with the Icelandic Economic Council last Thursday, along with the president of the international labour organisation. It is very high on the agenda at the moment, with some pushback in some quarters, but it is there. I do not know whether Dave Wants to come in on that as well. I am doubly that the concept and understanding of just transition has developed over the last couple of years. I think that the Scottish Government Just Transition Commission, the debate here in Scotland, has assisted with that. The change that we are undertaking is the original understanding of just transition. It has been quite compensatory based, so it is the idea that a coal mine has to be closed down. Relevant regeneration, monies and programmes need to be put in to compensate that community. That is an important part and will continue to be an important part of just transition. We are now moving into the space that we need to be in, where that is understood in a much more holistic sense, so that it is an economic policy, an industrial policy, even if it has subsectors. That is the space that we are moving into. I still think that there are differences internationally between those who see just transition as something that need not affect the social and economic relations of a particular country, but just need to be stuck on top of it. How do we make sure that jobs that we create are properly dispersed and the benefits fell? I think that we are getting to that, but we have not got to yet in Scotland. Understanding that this will challenge some of the various relations within society itself. How community democracy relates to the industry that it sits within and how trade unions engage with employers. Some of those more structural elements of just transition are being developed but have not yet been there. It is certainly from my point of view in terms of what transition really should make. I suppose that we can talk about the principles as well. They are central to the forthcoming negotiations going forward in Glasgow. In terms of the UK ensuring that those principles are basically featured in the agreement and the negotiations going forward, should we, in terms of the UK as well, focus on us because we are leaving the EU as well in that role? The UK are playing in terms of how we are delivering that in a different aspect now that we are out with the EU. Sorry, I am going around about that now. Should it be more a format—I am going to be quite controversial here—of a four nations approach here, rather than New Caled when we come to that platform? Just to say in response to that, it is very interesting that there has been far more interest in the Scottish just transition progress in Brussels than there has been in London so far. I have been at several commission-related meetings where we have talked about what is happening. I am going to completely agree with Dave that, in the past, just transition has featured most strongly in countries or regions that are exiting the coal industry. It has focused very much on the issue of financial compensation. I think that why people have been interested in the Scottish example is that we have broadened the concept of just transition. Financial compensation and financial issues are really important, but how you go about things, the way you consult and the processes are equally important. That has been quite important in terms of attracting attention. The other thing has been to draw attention to the demand side of the economy and the impacts on consumers as well as the impacts on the supply side and workers. That has caught a lot of attention as well. In some discussions that I have had with the NGO group internationally, it is very interesting in advancing the just transition concept following some of those lines. It is not just about the supply side, it is about people, it is about places and it is about the demand side as well. That is why we are attracting attention, because we have broadened the concept. The fact that we were invited to be realistic and practical has caught a lot of attention as well. We talked quite a lot about what constituted a realistic and practical recommendation, as opposed to something that was sprinkling the magic dust on net zero, as it were. Okay, thank you. Sorry, Dave. Do you want to come in on that? Just briefly, the question that you identified as controversial was whether there should be a more foreign nations approach, which I think you meant specifically in relation to the COP itself. The answer to that, generally speaking, is yes. The things that we've run through today in terms of the high-emissions sectors, the majority of those emissions that are using the back-up-of-the-pack packet are within devolved competencies. They are within housing, they are within transport or, if not, the emissions may not be within renewables, but part of the answer is within renewables. Given the weight of competencies, it would be very good to see your four nations approach. Jim's comment about more interest at Europe than Westminster, I mean, I haven't seen that, but I guess I do have some concerns that Westminster at the moment is further behind in its understanding of a just transition. I guess I give two quick examples that the disagreement with the Scottish Government and the UK Government over Greenport's three ports would be one example that concerns me, and another would be what we identify as the dilution of fair work statements within the North Sea transition plan, which, at the end of the day, was a UK competency too. I prefer to be optimistic and say that the UK Government has the opportunity to catch up on its concept of what just transition is and how it's implemented, but I certainly don't think that it's as far forward as we have in Scotland at the moment. We have a couple of brief follow-up questions from members if the panel can bear with us. We will try to keep them brief. Fiona Hyslop, to be followed by Liam Kerr and Monica Lennon. Thank you. Maybe just for Jim on this occasion, the idea of offshoring and how we transfer that on a global basis and how the world looks at what is fairness in a global context is a big picture of COP26. Your report mentions references to some kind of idea of global carbon tax potentially for offshoring, but is that something that the commission has done much work on and what your personal views are on that in terms of how we broaden just transition, not even just to be a national issue, but the international dimension of it? Yes, with my IPCC hot-on, I have to say that the internationalisation of just transition is also an issue. One of our recommendations was about exploring, for example, the issue of border carbon adjustments as a way of making sure that we avoid the risk of offshoring industry. I have to say that this is a very delicate issue to put out internationally, because there are some developing countries that review border carbon adjustments as pulling up the ladder in terms of development. It needs to be thought about very carefully to make sure that border carbon adjustments do not become a mechanism for establishing trade barriers that will be perceived as impeding a just transition at the very international level. It needs to be thought through carefully to make sure that it is not fair and that we are not, as it were, pulling up the ladder on developing countries. I think that you mentioned fuel poverty in response to an interesting line of questioning from Monica Lennon earlier on. The Scottish Government announced the intention to set up a publicly-owned energy company to address fuel poverty and achieve net zero. Do you have a view on whether it would have achieved that in terms of the just transition principles that you have worked to? Having looked at that, do you have any insight as to why that ambition for a publicly-owned energy company has yet to be realised? It would be great if we could have started from a different place. Dave raised the example of the switch from town gas to natural gas, which was achievable because we had a public energy company at the time that was doing the supply. It could come and do it in a very organised way. That is not the place that we are starting from at the moment, where a public energy company would be coming in and, as it were competing with the existing set of private suppliers. It would have helped in a niche kind of way, but the bigger challenge is what we do with the overall energy system and the patterns of energy supply and how it is delivered to consumers. I am sure that Dave has got views on that as well. The Scottish Energy Company, which was purely focused on price or the retail side of energy, may have helped a little, although it would have been immersed in what is already a very competitive market. Our ambition for a nationally-owned energy company always went beyond that. Does it continue to be interested in other aspects, including generation, community generation, transmission and construction, too? Although it might have been helpful, I think that it is probably arguable, and I was not on the inside of this, that one of the reasons it moved off the agenda was almost because that very limited kind of retail role would only have done a little bit of good. I think that the main price issue remains that of the use of general taxation rather than direct charging to fund future development. That is the first step that we need to take if we are going to bed down on individual energy costs. Monica Lennon with a final question from Mark Ruskell. My question is to Dave Mock. Some have been talking about skills and jobs this morning. The Green Jobs Workforce Academy went live recently. So far, it appears to be a website where you can find a list of jobs and training courses, everything from winter bind technician to HDB driver. I am looking at the site this morning. What should that academy be doing? It is early days, but what can it do to help to create jobs and to help people to get training? I haven't yet, Monica. To be honest, I don't have the time to look at the website or in detail, but what you seem to describe at the moment seems to be a small green jobs labour exchange, which could potentially reduce a little bit of friction in terms of people being able to get jobs but will not make a fundamental impact. What should it look like? It should be a portal where people who are engaged in the active planning of new initiatives and jobs creation and the people who are able to provide the skills come together to provide a portal that has real content in it. In a sense, it is only ever going to be the outward face of a Government strategy, which, as we have rehearsed for the last hour and a half, needs to be better funded, better co-ordinated and part of a sexual plan. I am not against the idea of just a little bit suspicious of overemphasising the importance of something that may be slightly more effective at looking around the market, seeing what is there and matching people to jobs, but is not changing any of the fundamentals in job creation or the skills offer itself. I guess that it is half a clap for it just now, but I am not sure that it would ever be more than the outward face of what needs to be far more hard-edged, fundamental policy change to deliver on jobs and skills. That is helpful, thank you. Thanks. Should the use of GDP as a measure of progress simply be stocked out right or a more transitional approach taken? My opinion on this is that GDP needs to be supplemented by other measures that provide a different indicator of welfare and people's quality of life. GDP measures economic activity, and we absolutely need to measure economic activity to undertake planning, but I think that that needs to be supplemented by other measures that relate to welfare. Not instead of but as well as would be my message on that. You are still on mute, Dave. I will ask the broadcasters to unmute you. I think that I have managed to unmute myself. I will be brief. I broadly agree with Jim on that. I think that, particularly for the point of economic and industrial planning, GDP is not the measure that we need to be using and the experience of the oil and gas sector and the massive disparities between GDP per capita and actual quality of jobs, community regeneration and other things delivered would bear testimony to that. Particularly across sectors, we talked earlier about an energy transition plan. To use GDP as the low measure for an energy transition plan would be entirely the wrong approach. While it may work, and I even say may, for some of the kind of macro judgments that we make, when it comes to planning the transition in these key sectors, I would not say that GDP is irrelevant, but it can sometimes be less than useful and sometimes a negative measure to use. I think that that is going to become more the case further than the less as we pursue a transition. Thank you very much. That brings us to the end of our questions. Let me just say a big thank you to both Jim and Dave for being with us this morning. Apologies that this session has overrun slightly. Thank you for bearing with us. Thanks for your patience. I think that that indicates just how useful your evidence has been in setting the scene for the committee and addressing a number of the very important issues that we raised with you. Thank you once again and we will no doubt be working with you again in the future. Enjoy the rest of your day.


Welcome back to Knowledge Clip 8 about knowledge in organizations. In the previous clips I talked about knowledge in individuals and how individual learning happens. In this clip I'll take you to the next level. I'll talk about knowledge in organizations. After this clip you'll understand four things. First, I'm going to talk about knowledge-based theory. In order to share knowledge at the group level and to use it, we need to have some understanding what actually happens when knowledge is shared at the group level. Furthermore I'll talk about the transfer of knowledge and what it is and how it happens actually. Finally, I will present in the next clip information about knowledge creation and innovation and about knowledge storage and retrieval. To start with, where does knowledge reside? In the previous clip we've seen that knowledge is something that happens in people's minds. It's in their head, so to speak. However, by sharing knowledge from one person to the next, we can have the same knowledge. So although knowledge is shared in one individual's mind, it can be shared, stored and retrieved because we exchange knowledge. If I have knowledge I can share it with my friends and with my students and they can have the same knowledge. In fact, we use this shared knowledge to make things happen, to do things. And if people interact and integrate their knowledge, they can create new knowledge. So knowledge sharing, storage and retrieval make the people in organizations at all levels can actually share the knowledge and use it. And all this sharing and using the knowledge eventually is very important if you want to improve things in organizations. So this knowledge sharing between individuals in the level of the organization is actually an important source for organizational innovation. One of the key thinkers in the domain of shared knowledge is Grant. In 1996 he developed a knowledge-based theory. This is different from individual knowledge theories. This is really an organizational level theory about what drives production processes in organizations and how this contributes to organization performance. And Grant said that actually everything that happens in organizations is to be dated back to what people have in their minds. So actually an organization is a social structure that enables people to use their knowledge in order to do things. So knowledge comes before behavior and actions. Grant's theory has a number of elements that I would like to share with you. So the first and foremost important thing is that he claims, indeed, that knowledge exists in individuals. So it's impossible to take the knowledge out of somebody's mind and just plug it into a computer and use it there. I know you really have to work with this individual to understand what he or she knows. Organizations can be organized in such a way that it either enables the use of knowledge by individuals or hinders the use of knowledge. And the idea behind that is that people in groups, they form social structures. And within a social structure people can do things that are expected in a certain way. So some people can be asked to contribute, but social structures can also inhibit people to use their knowledge. For example, if you don't feel that you're valued, then expressing what you know or putting your knowledge to use is hindered. So the use of knowledge, an important thing, if you want to be successful as an organization, want every employee to contribute their knowledge and use it in the best way to help the organization. So the knowledge used means that the products are realized, the services can be delivered, and that organizations basically meet their goals. What organizations can do is to facilitate this process. So facilitate that people are happy about using their knowledge in the organization. Structures, they ensure that there is coordination between individual knowledge. So imagine that you have a team and every individual in the team has specific knowledge. Then for example, installing a manager and having negotiations with the team and having team meetings. These are all structures that can help to unleash the knowledge, share it and learn from each other and then make the best use of it in practice. According to Grant, if you look at knowledge from this perspective, it's an important source of competitive advantage. So remember when we discussed the resource-based view, when we talked about unique capabilities, well, the shared knowledge in organizations and the way that it is shared, this knowledge-based structures, these are actually unique for every organization and they can be an important source for competitive advantage. So what does it mean if we look at human resource management? Well, it basically means that you need to have a critical look at your organization structures. Imagine an organization as is illustrated on the left-hand side of the slide. You see a hierarchical organization where people are nested in teams of two or three employees and reporting to a manager who's reporting to another manager. Imagine that the two people on the left want to share their knowledge with the persons on the right. And imagine that this organization has no connections in between these departments. So that means that they first need to talk to their manager who needs to talk to their manager, who then needs to go back to the manager who has to talk to their employees before that the information is exchanged. So you can imagine that a very hierarchical organizational structure is actually hindering the exchange of knowledge. So Grant's conclusion, for example, is for effective organizations, they should have more flat organization structures so that people are more easily run into one another and can exchange their knowledge. Another important implication for human resource management is to have a close look at the job design of individual workers. So imagine a job where you're just told to be done what your manager says is important. So for example, you're in the production line and your only task is to do the task that you were given that day. So you're not invited to share your knowledge, you're not invited to think along. In such situations, actually, the structure hinders that individuals can contribute their knowledge to improve, for example, this production line. So an important implication of the knowledge-based theory for job design is that you think about how can we make jobs more richer so that employees can actually contribute what they know to the organization and to their peers. So think about, for example, task complexity. Maybe it's possible to add a little bit more to the task so that people actually have to think about how one part of the job connects to another. Think about having authority over what you do. Think about the possibility to make improvements to your job. Think about what kind of decisions are you allowed to take together with whom. Think about what kind of goals can you make. Think about teamwork. So all these things relate to how jobs in organizations are designed and can contribute to effectively exchanging knowledge and putting their knowledge into action and make the organization, therefore, more effective. So let's take a moment to think a bit deeper about how grants theory, about knowledge being so important, can actually contribute to it being a resource for unique capabilities. When we discuss the resource-based view, we discuss that in order to be a unique and contributing resource, it should be difficult for competitors to also buy it or to just copy it. Well, knowledge is a bit weird from that perspective. If you look at knowledge from the explicit view, remember the things that are written down and you can easily retrieve from the internet but also just by going to an organization and spy on their innovations, for example, explicit knowledge can be easily shared. You can just copy it and bring it somewhere else. Tested knowledge, on the other hand, is everything that is implicit that's stored in the minds of individuals and we know already that it's much more difficult to transfer test knowledge than explicit knowledge. So in terms of unique capability, it's more likely that the test knowledge that resides in an organization is the plus-plus-plus when it comes to unique capabilities. This is the firm's specific knowledge. It's the human capital, the unique capability for competitive advantage. Is it impossible to keep explicit knowledge to an organization? To some extent, you can think about systems, for example, for protecting your innovations and making sure that their license is on it, for example. However, these all have limitations over time. If it comes really to unique capability, you need to think in the direction of tested knowledge. Then, a definition in between. Central in the theory of the knowledge-based theory is the idea of knowledge transfer. So knowledge transfer is defined as a process in which knowledge holders, so one person and another person, share their knowledge with others who learn from this knowledge so that they can apply it. This is different from knowledge sharing. Knowledge sharing means, here is my knowledge, good luck. Knowledge transfer really means a process where the knowledge is digested and subsequently used in practice. You can understand why it's important, because if you want to improve anything, basically, if you want to improve a process in an organization, for example, you really need to also apply what you've learned to the organization in order to benefit from it. Well, in practice, there are a lot of hindrances that make the sharing of the transfer of knowledge difficult. For example, there are obstacles in the center. Within organizations, it can be really, really beneficial to have knowledge that others don't. So it's an important source of power. People who are unwilling to share their knowledge, you can think of some times of situations where they have their position because they know things or because they know where to find everyone in an organization. If they would share this knowledge, that would mean that they would lose this power. Another hindrance for the willingness to share knowledge is self-efficacy. Imagine, for example, that you're quite young and you come into an organization and you know things that obviously would be beneficial for the senior people working there. However, speaking up in a group of seniors is to do with status and maybe they don't like you that much afterwards. So self-efficacy, the confidence of speaking up and sharing your knowledge can also be a hindrance or an obstacle in sharing knowledge. Same is true for the other side. The receiver also has obstacles when it comes to the effective transfer of knowledge. It all starts with the willingness to listen and that, again, depends on the status of the sender. If you're somebody really young or somebody who is seen as not a valuable source of information, then the willingness to listen will not be so good. Also, it depends a lot on what kind of relationship you have with the sender. Remember when we talked about social capital, that good quality relationships are really important for organizations to function well. So this relates to that. If you have a good quality relationship with the sender, the likeness that you will listen to what they have to say is larger. And also it has to do with the intelligence of the receiver. So are they able to understand what they are being told? Further, there are some organizational hindrances. Think, for example, about the lack of time, lack of resources. So there are many things that can actually hinder effective knowledge transfer. How bad is it? Or actually to turn the question around, how valuable is it when there is effective knowledge transfer? And luckily we have a lot of research available on that. So the media analysis by Van Dijk and Janssen, they show that when there is a lot of knowledge transfer in strong and trustworthy relationships, then there is a lot of performance in the organization. Knowledge transfer happens when there is trustworthy relationships, both internal in the organization as well as external to the organization. On external, you have to think about relationships with suppliers, with universities, employers associations, with government. So literally every relationship that you can use to invite information into your organization and to be able to use it. For all these relationships, it's important to have a close cooperation. So just saying that you will work together with a university by signing some kind of document that you will do so in the future is not going to lead to a lot of knowledge transfer. Only when researchers go actively to these organizations and for example team up and doing research with organizations, only then there is a close cooperation and learning and the side of the organization will happen. There will be knowledge transfer to the organization that they can actually use. In the context of evidence-based human resource management, this is of course very interesting. So organizations who want to use the insights from university when it comes to managing people in organizations, it's not a bad idea to reach out and actually work with a researcher or a student. All these corporations are important because they eventually also result in test knowledge transfer and you remember test knowledge is important to actually use the explicit knowledge and make it something that you can use in the organization so mix the explicit knowledge with the test knowledge. This brings me to the next part because if you have a structure that facilitates the exchange of knowledge, the transfer of knowledge both within the organization by having good organization structures, having rich job descriptions and you have this nice network with all these relationships with whom you can transfer all this knowledge, then the next step is to use this knowledge to your advantage and create new knowledge. New knowledge is created when people transfer what they know, when they internalize it and when they apply what they've learned. The value of individual group and corporate knowledge grows exponentially when it's shared and increases its value with use. I'm going to take you and show you in the next clip how this creation of knowledge can be conceptualized using the theory of Nonaka and Takuchi. For now, after this clip, you know what the essentials of knowledge base theory until you know that knowledge is eventually what makes organization stick, what makes them work. You have seen how test and explicit knowledge always also exist in the group and organization level and that transferring between all these levels is really important for effective functioning. Knowledge and the individual and the group level are both a resource for unique capabilities and therefore for competitive advantage. In the next clip, like said, knowledge creation, storage and retrieval.