Assembly to debate the Climate Change (Wales) Regulations 2018

On 4 December, the Assembly will debate the Climate Change (Wales) Regulations 2018. The suite of five sets of Regulations gives effect to the Welsh Government’s statutory obligations under the Environment (Wales) Act 2016.

The Environment Wales Act

The Welsh Government’s Climate Change Strategy (2010) committed to a reduction in total greenhouse gas emissions to a level 40% below 1990 levels by 2020. The Strategy also included a target to reduce emissions in areas within devolved competence by 3% each year from 2011, relative to a baseline of average emissions during 2006-2010.

The Environment (Wales) Act 2016 (the Environment Act) placed new duties on the Welsh Government to reduce emissions:

• The Welsh Government must ensure that net emissions for 2050 are at least 80% lower than the baseline (1990 or 1995);
• By the end of 2018, the Welsh Government must set interim emissions targets for 2020, 2030 and 2040;
• For each five year budgetary period the Welsh Government must set a maximum total amount for net Welsh emissions (a carbon budget), with the first two budgets to be set by the end of 2018;
• The Welsh Government may by Regulations establish or designate a body or person to be an advisory body. If no Regulations are in force, the advisory body is the UK Committee on Climate Change (UK CCC); and
• The Welsh Government must take into account international agreements to limit increases in global average temperatures.

The Well-being of Future Generations (Wales) Act 2015 supports carbon reduction at a national and local level. The Act requires public bodies, including the Welsh Government, to work to achieve all seven well-being goals, three of which specifically reference climate change.

The Welsh Government commissioned the UK CCC to provide it with advice, initially, on the design of Welsh carbon budgets and targets (April 2017), and, more recently (December 2017), on the level of emissions targets and carbon budgets required to meet its obligations as set out in the Environment Act.

The key recommendations from the advice were:

• The overall accounting framework should be based on actual emissions in Wales, rather than adjusting for activity in the EU Emissions Trading Scheme (EU ETS);
• The option for the Welsh Government to purchase credible international emissions credits should be retained to provide flexibility for unforeseen circumstances. These credits should be a back-up option rather than their use being planned for, and should require prior advice from the UK CCC;
• Wales’s share of international aviation and international shopping should be included within Welsh emissions targets; and
• All targets under the Environment Act should be expressed relative to 1990 emission levels. For the 5-year carbon budgets this would most simply be represented as the average reduction on 1990 emissions across the budget period.
• Achieving an 80% reduction in emissions by 2050 will be more challenging for Wales than the equivalent reduction for the UK as a whole, mainly due to the prevalence of ‘big emitters’;
• There is scope for Wales to go beyond the legislated minimum reduction of 80%, to a reduction of 85% by 2050;
• Adjustment in case of the Aberthaw coal fired power station closing before 2025. The recommended levels of the 2020 target and the first two carbon budgets allow for continued generation from Aberthaw; and
• Policy recommendations across a number of areas: building standards; retrofit energy efficiency and low-carbon heat; transport, agriculture; forestry; electricity generation; procurement; and planning.

The Climate Change (Wales) Regulations 2018

In November, the Welsh Government laid five sets of Regulations to give effect to the commitments arising from the Environment Act. They are:

• The Climate Change (Interim Emissions Targets) (Wales) Regulations 2018;
• The Climate Change (Carbon Budgets) (Wales) Regulations 2018;
• The Climate Change (International Aviation and International Shipping) (Wales) Regulations 2018;
• The Climate Change (Credit Limit) (Wales) Regulations 2018; and
• The Carbon Accounting (Wales) Regulations 2018.

Accompanying the Regulations is an Explanatory Memorandum and Regulatory Impact Assessment (RIA). For the five sets of Regulations, the Welsh Government has confirmed that the Welsh Ministers obtained and took into account the advice of the UK CCC, in accordance with Section 49(1) of the Act.

The Climate Change (Interim Emissions Targets) (Wales) Regulations 2018

The purpose of these Regulations is to set decadal targets that represent a pathway to the 2050 target of emissions reductions of at least 80%. The Welsh Ministers are required to set each interim target at a level that they are satisfied is consistent with meeting the 2050 target. The Welsh Government accepted the recommendations of the UK CCC, and the targets set within the Regulations are:

• A 2020 target for an emissions reduction of 27% on 1990 levels;
• A 2030 target for an emissions reduction of 45% on 1990 levels; and
• A 2040 target for an emissions reduction of 67% on 1990 levels.

The Climate Change, Environment and Rural Affairs (CCERA) Committee established an Expert Reference Group in 2016, to support it in its scrutiny of climate change, action and progress. The Group expressed disappointment at the 2020, 2030 and 2040 targets recommended by the UK CCC. It suggested they demonstrate a lack of ambition and could be interpreted as a reward for the Welsh Government’s lack of progress to date on meeting its targets under the Climate Change Strategy (2010). The Group also believed that the targets do not adequately take into account the commitments made under the Paris Agreement and that they should be more ambitious.

The Climate Change (Carbon Budgets) (Wales) Regulations 2018

A carbon budget sets a maximum limit on the total amount of Welsh emissions permitted over a five year budget period. The first budget period runs from 2016-2020, with subsequent budgets covering five year periods to 2050. The Welsh Ministers are required to set each carbon budget at a level that they are satisfied will meet the 2050 emissions target and the interim target for any interim target year that falls within that budgetary period. They are required to set the levels for the first two carbon budgets by the end of 2018. As with the interim emissions targets, the Welsh Government accepted the advice of the UK CCC, and the budgets set within the Regulations are:

• First carbon budget (2016-2020): an average of 23% below 1990 emissions; and
• Second carbon budget (2021-2025): an average of 33% below 1990 emissions.

The Climate Change (International Aviation and International Shipping) (Wales) Regulations 2018

The purpose of these Regulations is to include the Welsh share of emissions from international aviation and international shipping as part of the Welsh Government’s accounting framework through the Net Welsh Emissions Account (NWEA). The NWEA is calculated by determining the amount of net Welsh emissions of greenhouse gases for the period, subtracting the amount of carbon units credited to the account, and adding the amount of carbon units debited from the account for the period. The intention of including these emissions within the NWEA is to provide a clearer and more transparent approach to accounting for Welsh emissions and to support global efforts to support emissions in this sector.

The Climate Change (Credit Limit) (Wales) Regulations 2018

The Environment Act requires the Welsh Ministers to set a limit on the total amount that the NWEA can be reduced through the use of carbon units. Carbon units are international offset credits generated through Certified Emission Reduction (CER). The Explanatory Memorandum accompanying the Regulations says that they provide a means by which Wales can invest in emission reduction activities overseas and use the emissions reductions achieved to offset domestic emissions within Welsh targets. These Regulations set a limit of 10% on the use of carbon units for the first carbon budget period.

In its 2017 advice to the Welsh Government the UK CCC recommended that any economy-wide use of offset credits to provide flexibility should be small. The advice did not recommend placing a specific limit on the use of emission credits in legislation. However, the Welsh Ministers have a statutory duty under the Environment Act to set a specific limit on the use of offset credits in regulations. The Welsh Government’s Decarbonisation Ministerial Task and Finish Group has committed to seeking the UK CCC’s advice before using offset credits in relation to the first carbon budget or 2020 target.

The Carbon Accounting (Wales) Regulations 2018

The purpose of these Regulations is to define the type of carbon unit which may be counted towards the Welsh Government’s targets and budgets for the purposes of accounting, and how they are to be administered. The Explanatory Memorandum says that the Regulations also aim to make the process of administering and using the carbon units robust and transparent by setting out formal administrative processes in relation to the government’s purchase and use of carbon units, and how units are to be credited to the NWEA.

Article by Chloe Corbyn, National Assembly for Wales Research Service