COP27: Better finance, carbon calculation and purpose now needed

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As COP27 negotiations draw to an end, industry is faced with the task of financing, designing and delivering decarbonised infrastructure. So what comes next? 

COP27, perhaps more than any other such meeting, reflected firmly on the poor progress made so far, and industry is clear that this is something that the infrastructure industry must change too.

One of the key points of focus will therefore be to tackle the gap between commitments made and outcomes achieved. Industry has many of the solutions needed to end climate change and Louise Adams, chief operating officer at Australian engineering giant Aurecon, has called on the infrastructure sector to lead by example.

Adams told IG: “While significant and sizeable progress has been made with governments and organisations across the world defining commitments and targets for climate outcomes, there is more work to do to translate this to practical outcomes. We need to lead by example by continuing the call for more action and urgency, and by helping bridge the gap between targets and outcomes.”

This is something that much of the industry can be positive about doing regardless of the politics, explained Adams. “From a profession’s point of view, we are fortunate that engineers are sitting at the action end. We have the ability to influence greatly through our design mindset and impact the world’s most complex challenges by designing for sustainable outcomes. As a profession we mustn’t waste time waiting for government-mandated climate targets to be set at a project level, for example the appropriate levels of carbon emissions when a new road or tunnel is built.”

The finance gap
Jean-Patrick Marquet, a senior expert in international development and finance with the World Economic Forum, told IG: “As reported by the UN ahead of COP27, the world is far from being on track in its decarbonisation drive. The infrastructure sector is unfortunately no exception, with the transportation industry particularly singled out by various studies.”

Marquet stressed this is in large part down to finance. “The decarbonisation shortfall appears to be mostly a function of a large and enduring investment gap, itself the result of confusing policy signals, an adverse economic environment and insufficiently targeted financing sources.”

Can’t measure without counting
So, what are the things that engineers should be doing right now to make change happen? Discussions away from the main stage at COP27 have focused on a number of key issues, but one recurring theme has been the need for reliable and consistent carbon data and standards.

Adams explained: “Having a consistent methodology for calculating embodied carbon is extremely important to successfully win and execute large-scale projects. Understanding carbon markets and accessing experts who can provide insights, advice and strategies, procurement strategies and climate risk assessments also helps to navigate this rapidly evolving area of the economy.”

This was backed up by Robert Spencer, global lead for ESG at Aecom. He told IG that greenwashing was not respected but that some good standards are being recognised.

“Clients and wider stakeholders want to be able to trust the carbon declarations and statements that come out of our industry and with respect to the carbon load of infrastructure development they want to know how carbon is being abated: there is no tolerance of ‘greenwashing’.
“Many clients in the Europe region are adopting the well-respected PAS2080 standard, which is driving consistency and transparency.”

“Going further, we expect that major infrastructure of the future will be required to show a carbon balance sheet across the infrastructure development, showing how, where carbon is expended, it is balanced by carbon sinks – either natural or materials based. Work is in hand to determine guidance on how to approach this across a number of key initiatives.”

What should industry prioritise right now?
Getting carbon calculations right is only a step towards reducing carbon emissions across the world’s infrastructure. So what do industry experts see as the priority action to be taken now?

One ambition must be to bridge the finance gap, which carbon calculation might help with, according to Marquet.

“Transparency in general and trusted carbon calculations in particular are critical enabling factors for the infrastructure industry to be able to access targeted investment sources and fill the funding gap. Meeting climate ambitions in infrastructure requires a combination of clear policy incentives (such as carbon pricing) and well targeted and credible funding sources, for example, an expanded green bond market or reliable sustainable financing criteria.”

At the same time, there is a growing awareness that the industry needs to focus on the lifecycle of infrastructure, not just the design and build of it.
Spencer explained: “The biggest impact we can make on tackling the climate crisis is decarbonising the lifecycle of the infrastructure development process we live by, from early optioneering and feasibility through to detailed design and build out. This is largely about pulling the embodied carbon out of the design and construction specifications that we prepare.”

This is something that is now being attempted on a large scale, he said. “At AECOM, we have committed to pulling out at least 50% of the carbon from our major project designs in the coming years and we have established a company-wide knowledge and technical workflow called ‘ScopeX’ to achieve this. ScopeX encompasses everything from carbon literacy in engineering design through to alternative materials specifications, case studies of what works for what asset type and incorporating nature-based solutions where feasible.”

But with significant progress needed, there must also be a focus on companies, like governments, living up to their commitments – not just making them.

Adams explained, “While it’s difficult to pinpoint the most significant singular action available to industry to achieve climate ambitions, one that cannot be underestimated is leading an organisation with a clear purpose.
“As the gap between organisations’ target emissions and actual outcomes continues to widen, people – particularly younger generations who are extremely passionate about making a difference in the work they do – are at risk of becoming disenfranchised with unfulfilled corporate promises. It will remain critical for organisations to remain authentic and operate with a genuine purpose to ensure an engaged workforce to deliver outcomes that create a better future for the planet.”