What are the costs of Scotland's climate and renewable policies?

The UK government has established ambitious policies to address climate change and promote renewable energy, and has set targets both for reducing carbon emissions and for deploying renewables. Scotland, a constituent nation of the UK, has also set its own targets for climate change mitigation and renewable electricity. This paper analyses the energy, economic and environmental implications of carbon and renewable electricity targets in Scotland and the UK using a newly developed two-region UK MARKAL energy system model, where Scotland (SCT) and rest of the UK (RUK) are the two regions. The paper shows that meeting Scotland's carbon targets does not require additional decarbonisation effort if the UK meets its own targets at least cost: and that Scotland's renewable energy ambitions do imply additional costs above the least cost path to the meeting the UK's obligations under the EU renewable energy directive. Meeting Scottish renewable electricity targets diverts investment and deployment in renewables from rest of the UK to Scotland. In addition to increased energy system cost, Scottish renewable electricity targets may also require early investment in new electricity transmission capacity between Scotland and rest of the UK. (C) 2012 Elsevier Ltd. All rights reserved.