Two years on from the historic COP21 deal on climate change, global carbon emissions are higher than ever. What is going to force civil engineers into action?
Days of frank, and at times bitter, talks at the United Nations (UN) COP21 Climate Conference in Paris in December 2015 ended with 195 countries signing a breakthrough commitment to keep global temperature rise to below 2°C this century and further aspire to limit it to 1.5°C above pre-industrial levels.
The deal was described as a “monumental triumph for people and our planet” by then UN secretary general Ban Ki-moon and a wake-up call to our industry by then ICE vice president and long-term climate campaigner Keith Clarke. “Now we need a revolution in the structure of engineering,” he said.
Why? Because the science tells us that it is the level of green-house-gasses in the atmosphere that is unquestionably the cause of climate change, and that is driven by our carbon-dependent society. And decarbonisation is fundamentally an engineering problem – a civil engineering problem at that.
The infrastructure sector is in a unique position of influence. As highlighted in the government’s 2013 Infrastructure Carbon Review, the infrastructure sector has full control of 16% of total UK carbon-based emissions and influence over a further 37%.
As power generation is increasingly “greened” over the coming years, and energy-hungry sectors such as transport embrace renewable energy, carbon emissions from the construction and maintenance of infrastructure will become increasingly significant, and decarbonising infrastructure an increasingly high priority.
Real effort and innovation are called for to drive emissions down – and then to compensate for those emissions that cannot be avoided.
So two years on from the Paris Accord, where are we?
Carbon (flattened) crop
It is not good news. In January the UN indicated that 2017 and 2016 were the second and third hottest years on record.
Worse, global carbon emissions rose again in 2017 after three years of little to no growth, according to researchers at the University of East Anglia and the Global Carbon Project.
The three stable years, 2014-16, had raised hopes that emissions had peaked.
Lead researcher Corinne Le Quéré, director of the Tyndall Centre for Climate Change Research at the University of East Anglia, describes the rise as “very disappointing.”
“Time is running out to keep warming well below 2°C let alone 1.5°C, she warns.
Time is running out to keep warming well below 2°C let alone 1.5°C
“Last year we saw more evidence of the likely consequences of climate change, with more intense rainfall, higher sea levels and warmer ocean conditions favouring more powerful storms, amplifying the impacts of hurricanes and cyclones. This is a window into the future. We need to reach a peak in global emissions in the next few years and drive emissions down rapidly afterwards to address climate change and limit its impacts.”
Latest figures put the annual bill for repairs and recovery following climate related events at US$300bn (£222bn) in the United States alone. Globally the figure is significantly higher.
Growing climate impact
And with new infrastructure being added to the global asset base at an ever-increasing rate, losses will escalate rapidly not only because of increasingly severe climate impacts, but because there is ever more infrastructure at risk.
So what is being done?
A lead looks to be coming from outside the industry. Institutional investors are acting to understand and address the risks to their investments posed by the impacts of climate change.
As Mott MacDonald head of climate resilience Ian Allison explains: “We’re seeing companies with trillions of dollars of assets in their portfolio asking those they’ve invested in: ‘tell us about your climate risks; tell us about your response to ensuring climate resilience’. They’re asking the question: ‘is our money safe with you in the face of climate change?’”
Companies that fail to advise on the risks to clients will be exposed to the risk of litigation
The scrutiny follows an initial warning delivered by Bank of England governor Mark Carney in his capacity as chair of the Financial Stability Board (FSB) in 2015.
“Mark Carney’s warning, delivered at Lloyds of London, was high profile and spelled out the potential scale and severity of climate-related risks to global financial markets,” Allison explains.
Carney’s intervention preceded the launch by the FSB of the Task Force on Climate-related Financial Disclosures (TCFD) which produced its final report last year. It aims to develop voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to investors, lenders, insurers and other stakeholders.
Climate risk protection gap
It’s easy to see why: a climate risk protection gap of £1.2 trillion caused by extreme weather has opened up over the past decade, according to academics at the University of Cambridge.
Although Hurricane Harvey and other Category 5 storms that hit the southern states of the US in August and September last year cannot definitively be linked with climate change, there is universal agreement that Harvey-like storms will occur more frequently as a consequence of global warming.
“Our industry has been shaken by climate perils impacting urban centres, and 2017 is on track to become one of the most expensive years on record,” says Maurice Tulloch, chairman of Global General Insurance at Aviva and chair of ClimateWise, an insurer-focused climate risk network convened by the University of Cambridge Institute for Sustainability Leadership (CISL).
Our industry has been shaken by climate perils impacting urban centres, and 2017 is on track to become one of the most expensive years on record
ClimateWise is a major advocate of the TCFD and says its members are already on the front foot regarding the implementation of the recommendations. “They have been voluntarily considering and disclosing their strategic response to climate change for a decade,” says Mary Schapiro, special advisory to the chair of TCFD and former chair of the US Securities & Exchange Commission.
“The next step for them will be to begin the process of identifying and quantifying the financial impacts of climate change, exploring how resilient their strategies are to different climate scenarios, and encouraging others to do the same.”
Disclosing climate risk
“Many of the biggest investors in infrastructure worldwide are signed up to the TCFD guidelines, requiring disclosure of the climate risks to their investments,” explains Allison.
“The consequence is that we will see investment diverted away from businesses or industries that are not making a positive contribution to the Paris Agreement,” Allison says.
The pace at which the financial sector is acting to understand its exposure to climate risk is fast and is beginning to make a real impact on infrastructure clients and their supply chains, says Mott MacDonald principal climate advisor Madeleine Rawlins.
“Investors are planning their first disclosure of risks within the next couple of years and widespread adoption is expected within the next five. When this happens, consistent and comparable disclosures will inform decision making and lead to the pricing of climate risks.
“Which in turn will lead to more allocation of capital towards low carbon and climate-resilient investments.
“Expect to see capital being withheld or withdrawn from companies whose investments are not consistent with a 2°C pathway, both in terms of emissions and resilience,” she adds.
More than 230 organisations have expressed their support for the TCFD code. In addition to investors such as pension funds, insurers and banks, it includes big infrastructure emitters such as LafargeHolcim and the Virgin Group. It also features advisors such as Accenture and EY Group, but just two engineering consultancies – Mott MacDonald and Arup – and one contractor – Ferrovial.
Finance sector targetted first
In fairness to civils firms, TCFD is, initially at least, aimed at the finance sector, encouraging investors to act responsibly in the move to a low-carbon economy. But the expectation is that it will not be long before engineering consultancies are sucked in.
Allison says the task of protecting infrastructure, and its owners, operators and financiers against climate change is already gathering pace.
“The major investment decisions made today will be with us for tens of years to come. Infrastructure advisors have a twofold responsibility: first, to minimise carbon so that whole life emissions are as low as they can possibly be; and second, to make the infrastructure more resilient, to protect against – or at least enable adaptation to cope with – the chronic and acute climate change impacts of temperature rise, flooding, storms or drought over the decades ahead.
“Companies that fail to advise on the risks to clients will be exposed to the risk of litigation. With investors and insurers forcing the pace of change, the time to put climate related risks squarely on the professional radar is now.”
New Civil Engineer has seen in advance a letter that Legal & General, a major investor in infrastructure, is preparing to send to all professional engineering institutions.
It demands to know what measures are in place to ensure that the professionals offering them advice are up to speed on climate risk. L&G manages financial assets worth £1trillion.
Pressure on professions
In the letter, L&G chairman Sir John Kingham writes: “As climate change mitigation and adaptation has moved from ad hoc reporting within the corporate responsibility area to a fundamental design parameter for the built environment, we would like to understand what your professional body has done to embed [climate change], not as an ad hoc voluntary area of learning but as an integral part of the professional qualification and practice of all your members.”
He continues: “Given the UK’s phenomenal reputation in the built environment for skills both in engineering, design and project management, leadership by your professional body to embed this revolutionary change into how we design and implement and create our built environment within the next 10-20 years is fundamental.”
The ICE is at the forefront of the institutions Kingman has written to.
His letter has been described as trigger by a number of senior engineers who have spoken to New Civil Engineer.
“The L&G letter ratchets the disclosure on climate-related risks considerably up the infrastructure industry’s agenda,” comments Rawlins.
“L&G’s stake in UK infrastructure is significant and it is certainly not alone in pushing this agenda. The infrastructure industry needs to recognise this and wake up to the possible implications.”
Strong signal to engineers
“Sending this out to professional bodies in the infrastructure sector also sends a very strong signal that engineers need to develop new competencies to respond to the risks of climate change,” she says, “and that those competencies should be core to their status as chartered professionals.”
There is unquestionably good work being done by civils firms striving to show low carbon leadership (see page 36). And much more is being done to adapt to climate change, particularly in the UK, with 100,000 properties now better protected thanks to the 350 new flood schemes that have been completed since April 2015.
The Environment Agency is midway through a £2.6bn investment programme that will see that 100,000 figure triple in under four years.
Major new schemes are underway in places like Ipswich in Suffolk and Boston in Lincolnshire (see p40). But adaptation without mitigation is akin to King Canute trying to hold back the tides.
Global Carbon project key findings
- For 2017, CO2 emissions from fossil fuels and industry are projected to grow by 2% to 37gigatonnes – a record high. This follows three years of nearly no growth (2014 to 2016).
- Global CO2 emissions from all human activities are set to have reached 41gigatonnes by the end of 2017.
- China’s CO2 emissions are projected to grow by 3.5%, driven by a rise in coal consumption.
- India’s CO2 emissions are projected to grow by just 2% – down from over 6% per year during the last decade.
- United States CO2 emissions are projected to decline by 0.4%, with coal consumption projected to rise slightly.
- European Union emissions are tentatively projected to decline 0.2%, a smaller decline than the previous decade.
- CO2 emissions decreased despite growing economic activity in 22 countries representing 20% of global emissions.
- Renewable energy has increased rapidly at 14% per year over the last five years – albeit from a very low base.
- Atmospheric CO2 concentration reached 403 parts per million in 2016, and is expected to increase by 2.5 parts per million in 2017.
Legal & General Letter to Institutions
As you know, L&G are leading investors in the UK’s built environment.
I have recently written to the Chairs of all the companies we invest in asking their Boards what they have done to protect our investment in regard to the changes engendered by climate change. Your professional body is one of the many that provide the expertise and training and professionalism to effect the necessary changes to mitigate and decarbonise our economy in the very short term. As climate change mitigation and adaptation has moved from ad hoc reporting within the corporate responsibility area to a fundamental design parameter for the built environment, we would like to understand what your professional body has done to embed, not as an ad hoc voluntary area of learning but as an integral part of the professional qualification and practice of all your members.
Given the UK’s phenomenal reputation in the built environment for skills both in engineering, design and project management, leadership by your professional body to embed this revolutionary change into how we design and implement and create our built environment within the next 10-20 years is fundamental.
We look forward to hearing from you in due course.
Sir John Kingman, chairman