Diolch, Llywydd. I want to start by thanking Chris Jofeh and his independent group of stakeholders for delivering their hard-hitting but potentially transformational report, ‘Better Homes, Better Wales, Better World’.  The report, published on 18 July, contains few surprises about the action we need to take, the urgency, the scale and the costs , but it makes for very sobering reading.

When we asked Chris to lead this group in early 2018 the challenge was how, in the context of the future generations legislation, we could reduce the carbon consumed in 1.4 million homes by 80 per cent in 30 years through an all-tenure retrofit programme. Following our acceptance of the UK Committee on Climate Change’s advice in June, that target was in effect revised to require at least a 95 per cent reduction, with an ambition to achieve net zero carbon. The report from the independent group reflects this new target.

It sets out the vital interrelated components of the housing decarbonisation programme we now need to build, working with others. This is not a solo endeavour. Seven requirements have been identified: strategic commitment, challenging targets, a system to ensure quality outcomes, financial and other support, data collection, trialling and testing solutions, and working with people and communities to ensure change happens. All of these requirements resonate strongly with me and, I am sure, with others in the Chamber. But what I think the report also makes clear is that this is not a list of recommendations from which we can pick and mix. If we are truly to respond to the challenge of climate change, we need to appreciate the breadth both of the challenge we face and of the integrated response we must now construct. 

We must recognise that the Welsh Government has responsibilities in most of the key policy areas covered by the report. This and successive Governments must do its utmost to make the change needed over the next 30 years, but let’s not pretend it is going to be easy or cheap. There are so many areas of uncertainty, and three in particular. We still have a long way to go in developing comprehensive technical solutions to decarbonising our current housing stock in order to meet the targets in the report. We need much better data on existing homes, and that will be an early action. We need to build a much better understanding of the total costs of retrofitting. We are not yet in a position to be able to commit the funds that will be required, but we do know it will require commitment and investment from all parts of society, including householders. Our programme will need to reflect that. And thirdly, we do not know how fast the national gas and electricity grids are going to decarbonise. Despite the importance of delivering that change, we must also ensure that it will be achieved without passing on those costs to families least able to afford them.

We cannot wait until we have all the answers or until we have the resources. I’m not sure anyone has all the answers to climate change at the moment. What we do know is that inaction carries much bigger risks. So, despite all the risks and uncertainties, I have decided to accept all the recommendations in the report in principle. This is not because I disagree with the recommendations, but reflects a continuing uncertainty about the best way to achieve or implement them and the further work required inside and outside Government in order that we can be as clear as possible about costs.

I would just like to comment briefly about some of the key recommendations. Recommendation 1 includes the need for a commitment from other political parties to support a 30-year programme. I'm looking forward to hearing your response to that. Recommendation 2 asks for social homes and those in fuel poverty to achieve EPC band A in 10 years. I entirely understand this aim and support the need to do it, but I quickly need to know what this actually means for homes, the associated costs, the influence of grid decarbonisation, the people who own the homes and, very importantly, the residents.

My officials are already working with social landlords to start the modelling work for social homes. I would expect that to alter the focus of the Welsh housing guality standard after December 2020. I anticipate other benefits too, including considering the effectiveness of current approaches in programmes such as Warm Homes, appropriate support mechanisms for able-to-pay home owners, and the targeting of key policies such as the new fuel poverty strategy.

It is important to stress that the report and its supporting evidence are clear—not all homes can currently get to EPC band A. Doing so by 2030 may introduce costs in the 2020s that may be reduced or transferred in the longer term by adopting a less arbitrary target. Some homes may never achieve EPC band A, but I am purposely saying ‘currently’. In the light of the modelling and based on the evidence behind the report, I suspect we will need to pursue optimised retrofit solutions. This means doing the best we can to reduce energy demand and emissions on as many homes as we can, using existing solutions, on a low-regrets basis. The aim is to futureproof homes so that they are zero-carbon capable, ready to adopt future solutions and approaches when viable and safe to do so. The testing and trialling referred to in the report will be vital.

Many of these decisions will fall to the next term of Government and several terms after that. For good reason, we are not allowed to tie the hands of our successors and I am not proposing it, but I am sure most people in the Chamber today will understand the need and urgency for action despite the level of uncertainty. So, we need to quickly start developing a new programme ready for the next Assembly term. We need to build the case for investment now even if the actual decisions on investment will fall to the next Government. I am, therefore, very pleased to say that Chris Jofeh has again agreed to lead the development work with stakeholders, supported by Welsh Government officials. I will be establishing a green finance group, as recommended in the report, to look for innovative finance solutions. We are making connections with the fuel poverty work under way in Lesley Griffiths’s portfolio. My department is working with colleagues in Kirsty Williams’s department to address skills needs, and we must build a skilled and trained workforce so our SMEs and communities can take advantage of the huge opportunities that will come out of 30 years' worth of work. This is in line with our work on foundational and circular economies.

Energy retrofitting our homes is not just a major opportunity to significantly reduce our carbon emissions and meet our targets, but also to tackle fuel poverty, improve comfort and quality in homes, create jobs and promote training, supply chains and industries in Welsh communities. It is about making Wales prosperous, green and equal. Diolch.