Written Statement - Setting our interim emissions reduction targets and first two carbon budgets

The Environment (Wales) Act 2016 sets our long-term ambition to reduce greenhouse gas emissions by at least 80% in 2050 and provides strong foundations to meet our international commitments. Last year I confirmed we will be accounting for all our emissions in Wales. The purpose of this statement is to update the Assembly with regards setting interim emissions reduction targets and our first two carbon budgets.

Setting interim targets and our first two carbon budgets represents a significant milestone in terms of providing clarity and certainty for government, business and stakeholders with regards Wales’ pathway to a low-carbon society. It also demonstrates Wales’ commitment to contributing to UK emissions reduction targets and international agreements.

Our targets and budgets must be set using the most up-to-date and robust evidence, which takes into account all seven well-being goals and the impact on our consumption emissions to avoid unintended consequences. This is especially important in Wales given our economic make up and the communities we live and work in.

Over the last year, we have worked with stakeholders to develop our evidence base. We hosted events with our statutory advisory body, the UK Committee on Climate Change (UKCCC), alongside their Call for Evidence seeking views on the targets and budgets.  I was pleased to see a wide range of stakeholders attended our events, including representatives from industry, business, the public sector, third sector, academia and civil society. The UKCCC used this input to underpin their advice to us on our interim targets and first two carbon budgets. I would like to thank stakeholders for their involvement and for helping us to collectively understand our unique Welsh context.

My officials have also worked extensively across government, supporting decarbonisation working groups in Agriculture and Land Use, Buildings, Electricity, Industry and Business, Public Sector, Transport and Waste to test the assumptions and evidence presented by the UKCCC and compare them with our existing knowledge and evidence base. We have also analysed historic trends in emissions data and assessed options in the context of the Future Trends Report, the State of Natural Resources Report and international agreements on climate change.

Having considered the evidence, including the UKCCC advice, Cabinet has agreed to set interim targets and first two carbon budgets as follows (against the 1990 baseline):

• 2020: 27% reduction

• 2030: 45% reduction

• 2040: 67% reduction

• Carbon budget 1 (2016-20): Average of 23% reduction

• Carbon budget 2 (2021-25): Average of 33% reduction

These levels are consistent with the UKCCC advice. I will ask the Assembly to approve these figures within Regulations to be laid before the Assembly towards the end of this year.

The targets will be reviewed in light of emerging evidence and our well-being objectives. We will be working with the UK Government and the UKCCC to review our long-term targets in light of the Paris Agreement, ensuring they reflect our commitment to being a globally responsible Wales. However, the advice to date from the UKCCC has shown a reduction of 80% in Wales will be more stretching than the equivalent reduction for the UK as a whole and close to the maximum feasible reduction identified in their scenarios.  

Achieving these numbers will be extremely challenging, not least in light of the recently published emissions data for 2016 which showed our emissions have increased compared to 2015. This was largely due to a 22% increase in emissions from power stations. As a result, Wales has reduced its emissions by 14% since 1990.

While I am disappointed with the 2016 data, it is important to acknowledge the different challenges and opportunities we face compared to the rest of the UK. Historic trends show emissions are disproportionately volatile in Wales. Nearly 60% of our emissions come from heavy industry and electricity generation (referred to as the ‘traded sector’ under the EU Emissions Trading Scheme). Despite the impressive growth in renewable energy generation, a large proportion of energy produced in Wales is generated from fossil fuels.

The figures reinforce the importance of setting targets and budgets, and establishing a clear pathway for decarbonisation. We are working across government to identify what actions we need to take in the short, medium and long-term, and I have been encouraged by the response of Cabinet colleagues to this agenda. We will launch a consultation in July focusing on how to achieve our low-carbon pathway to 2030 and maximising benefits on our well-being goals. I look forward to discussing the consultation with Members later in the year.