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Introduction to Beale & Co’s Beyond Net Zero Series

August 2021

In November 2021, Glasgow will host the 26^th meeting of the United Nations Climate Change Conference of Parties, better known as “COP26”.

Following the publication of the first part of the Intergovernmental Panel on Climate Change (IPCC)’s Sixth Assessment Report on the 9th August 2021 in what is undoubtedly the biggest challenge facing our generation, the goal of COP 26 will be to seek binding agreements for international cooperation and commitments to further limit global carbon emissions and also to reach agreement for measures to mitigate for the increasing and quickening impact of climate change.

In the run up to COP26, and as part of our ‘Beyond Net Zero’ series, we will be looking at why climate change is such an important topic for the built environment sector, the regulatory developments or changes which are likely to be coming for the built environment sector, sector wide innovation to combat climate change and some of the legal and other challenges that will undoubtedly arise as part of this challenge.

In this introductory article we will set the scene as to how we got here, what is on the horizon for COP26 in November and why it is of critical importance for the built environment sector.  We also provide details at the end for you to register your interest in attending our virtual COP26 event in November 2021.

The Road to COP26

There can be little doubt that the activities of mankind have had, and continue to have, a profound impact on the planet.

The scientific consensus is that the earth’s air temperature has increased by approximately 1 degree Celsius since 1900, the end of the pre-industrial period, with the majority of that increase occurring from the 1970’s onwards.

While this doesn’t seem like a large change, to put it into some context, air temperatures have remained largely consistent for thousands of years.   In the last ice age, it is thought that the air temperature was approximately 6 degrees lower than the average air temperature in the 20^th century.

A change of 1 degree Celsius, over the course of only the last 120 years, therefore, is a significant change and one with profound potential impact.   With predictions indicating that if nothing is done to limit emissions of greenhouse gases, temperatures could rise over the next 100 years by as much as 5 degrees Celsuis having a devastating impact on the planet and the way we live.

Whether it is rising sea levels, more frequent flood events or changing weather patterns climate change is having a tangible effect now.

The Paris Agreement

The Paris Agreement, a legally binding international treaty on climate change, was adopted by 196 parties, including the United Kingdom and Ireland, at COP21 in Paris on 12 December 2015.  The Paris Agreement came into force on 4 November 2016 with a number of goals, the main one of which being the goal of limiting long term global warming to well below 2 degrees Celsius, and preferably to 1.5 degrees Celsius, compared to pre-industrial levels.

In order to do so, so called greenhouse gas emissions must be reduced. The main gases responsible for the greenhouse effect, or global warming, include carbon dioxide, methane, nitrous oxide, water vapour (which all occur naturally) and synthetic fluorinated gases.  The major one of these is thought to be carbon dioxide, which is released by nearly every human activity and which gives rise to the phrase ‘carbon footprint’, the amount of carbon dioxide released into the atmosphere.

The UK’s position

The UK government passed the Climate Change Act (“the Act”) in November 2008.  The Act sets out emission reduction targets that the UK must comply with legally and represented the first global legally binding climate change mitigation target set by a country.

The Act committed the UK to reducing its greenhouse gas emissions by 80 per cent by 2050, compared to 1990 levels.  In 2019, the UK Parliament declared an environment and climate emergency.  Whilst this did not legally compel the government to act, it was then followed by a more ambitious government target, amending the Act, with the aim of making the UK ‘net zero’ by 2050.

Whilst there have been some announcements, such as the Future Buildings Standard and Future Homes Standards consultations; aimed at making non-residential and residential buildings more energy efficient, and a commitment to ‘build back better’ and support a support green jobs in a policy paper, ‘The ten point plan for a green industrial revolution’, the UK government have not yet published detailed proposals as to how the UK is to achieve ‘net zero’.

However, the UK government have committed to publish their bold proposals, including a ‘Net Zero Strategy’, prior to COP26 in November this year.

‘Net zero’

So what is ‘net zero’?  Net zero refers to achieving a balance between the amount of greenhouse gas emissions produced and the amount removed from the atmosphere. There are two different routes to achieving net zero, which essentially work in tandem: firstly measuring and reducing existing carbon emissions and, secondly, actively removing greenhouse gases.

While it is not practical to target gross-zero, a net-zero target recognises that there will be some emissions but that these will need to be balanced, by schemes to offset an equivalent amount of greenhouse gases from the atmosphere, such as planting trees or using new technology like carbon capture and storage.

When the remaining carbon emissions produced are offset by the amount removed, the UK will be a net-zero emitter and therefore the lower the emissions, the easier this becomes, which is why measures to reduce emissions are just as important as those to offset.

COP26 Agenda

The attendees at COP26 will be working on an agenda to seek consensus and binding agreement to reduce global emissions to combat climate change and to mitigate the effects of climate change which are beginning to be experienced and will be experienced around the world in the coming decades.

There are four goals on the agenda for COP26:

1. Secure global net zero by mid-century and keep 1.5 degrees within reach

Countries will be asked to come forward with ambitious 2030 emissions reductions targets that align with reaching net zero by the middle of the century.

To deliver on these stretching targets, countries will need to:

• accelerate the phase-out of coal
• curtail deforestation
• speed up the switch to electric vehicles
• encourage investment in renewable energy.

2. Adapt to protect communities and natural habitats

To combat climate change already happening and that is predicted to happen, countries will be asked to work together to enable and encourage countries affected by climate change to:

 

• protect and restore ecosystems that naturally act as carbon sinks that capture and store carbon
• build defences, warning systems and resilient infrastructure and agriculture to avoid loss of homes, livelihoods and lives.

3. Mobilise finance

In order to deliver on the first two goals, developed countries must make good on their promises to mobilise at least $100 billion in climate finance per year to fund the transition.

4. Work together to deliver

The challenges of the climate crisis can only be overcome by working together and the attendees will be seeking to:

• finalise the Paris Rulebook (the detailed rules that make the Paris Agreement operational)
• accelerate action to tackle the climate crisis through collaboration between governments, businesses and civil society.

The Built Environment

So why is this important to the built environment sector?

The simple fact is that according to the UK Green Building Council and others, the built environment contributes around 40% of the UK’s total carbon footprint.  This mirrors the global contribution of the built environment on carbon emissions.

The built environment (or specifically those involved in it) will also have a fundamental role in building resilience into buildings and infrastructure to mitigate for some of the effects being experienced as a result of a changing climate.

It is for these reasons that the impact of climate change and any effort to reach net zero will have fundamental implications for the built environment sector.

Approximately half of the built environment’s contribution to carbon emissions comes from the materials and process of construction (and maintenance) of buildings and infrastructure which form the built environment. Significant advances will need to be made in the design, method of construction and innovative materials and processes in the coming years and decades to reduce emissions from these activities.

The remaining balance of carbon emissions comes not from construction and maintenance but from energy used in buildings and infrastructure so there will also need to be significant steps to drive efficiency gains in energy use if the government’s net zero targets are to be met.

As we have seen with the recent heatwaves in North America, the devastating floods in Western Europe and China as well as wild fires throughout southern Europe, change is happening now and is no longer a distant risk. If catastrophic climatic events become more frequent, endangering lives and damaging property and infrastructure this will have a dramatic impact on the viability of built environment projects, not only from a resilience point of view but also as to whether projects or buildings themselves will be insurable.

It is already acknowledged that climate change presents near and long-term risks and opportunities to the insurance industry. It will notably impact on underwriting, business strategy and the claims landscape. Whilst it poses a threat to those who do not respond to the need for adaption, there is no doubt that opportunities will arise for those playing a role in the global response to this most pressing of issues. To date, opportunities for investment and underwriting related to climate change mitigation e.g., investment in low-carbon technologies have received a great deal of attention but there is clearly a wider role for the industry to play by leading on adaptation and mitigation on the road to net zero.

The challenges, of course, will not just be due to regulatory changes brought in to reach net zero. We are already seeing clients, employers and investors demanding more sustainable projects.  This will only increase with the rise in importance of Environmental, Social, and Corporate Governance (ESG).

Over the course of this series, we will be exploring some of the steps being taken to reach, or go beyond, net zero as well as some of the challenges to be overcome.

Whilst the challenge cannot be understated, the events of the last 18 months, due to COVID-19, have shown both how adaptable we can be to change but also, taking the example of the vaccines, how quickly we can find potential solutions when required.

Our next article in the series will be posted later this month.

In November 2021 we will be hosting a virtual COP26 event, to discuss some of the points raised in this series of articles and the agreement reached at COP26.  If you would like to register your interest in joining us please email events@beale-law.com.

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