COP27 started and ended with politics. Now we need industry to take the lead and solve the climate crisis, writes FIDIC CEO Dr Nelson Ogunshakin OBE.
The opening of COP27 couldn’t have been clearer. The secretary general of the UN, the hosting president of Egypt, and the president of the African Union all demanded that rich nations finally deliver on their commitments and help developing nations build up their resilience to the damage that climate change is already doing.
So the news that, as COP27 came to a close, wealthy nations had agreed to create and finance a loss and damage fund was a ground-breaking step in the right direction. There may be more to do in terms of agreeing commitments to reduce carbon emissions but it is now down to industry to help guide and deliver the use of climate funding.
The scale of climate damage
Climate damage is significant. Swiss Re estimates that by 2050, the global economy will be more than 10% smaller as a result of climate change, and the White House reports that in both the past two years the USA has experienced 20 billion-dollar natural disasters for the first and second time in its history.
The impact of such climate change on poverty alleviation is severe. It is the poorer parts of the world that are least able to adapt and cope with extreme weather events caused by climate change, and there is an inherent injustice in that fact.
Climate justice must motivate us
Africa and South America make up only ten percent of all global emissions in the present day and between them, they make up a far lower percent than that of the historic emissions that have already warmed the planet towards the dangerous 1.5C level.
At the same time, these continents – and especially Africa – have the greatest financial challenge in adapting to climate change. According to the African Development Bank, Africa alone needs up to $145.5bn per year in climate action finance but receives an average of just $73bn. This is despite Africa’s remarkable capacity that could meet not only its own energy needs through renewable power, but also help Europe meet its needs with reliable energy exports if capacity is invested in now.
More importantly than the financial imperative, the consequences for hundreds of millions of Africans are profound. Africa has almost all of the most vulnerable countries to climate impact. The continent is uniquely dependent on rainfall-watered crops. Parts of the continent are already being destabilised by severe drought while other parts of it have suffered extreme flooding. The human cost is huge and the COP27 leaders are right that wealthy nations have a responsibility to help.
The industry response to these demands
While developed nations must live up to their responsibilities and support climate investment in Africa and the wider developing world, industry recognises that investment needs reassurance about the risks, focused on net-zero buildings and infrastructure, and must generate the greatest impact possible for the money being allocated.
The reality is that without the right investment in the right infrastructure, climate change will get worse and the poorest people will continue to suffer. We must therefore focus on retrofitting and building new infrastructure for greater climate resilience and lower carbon outcomes.
That process is already underway. Beyond the main stage at COP27, industry has held a series of discussions that brought together experts spanning water, transport, energy, finance and all aspects of infrastructure delivery. That huge collective knowledge is a vital resource but the challenges ahead or profound. A study by Arup suggests that the structures it creates generate 360 times more carbon over their lifetime than the companies that design them, and the industry is in desperate need of good, reliable and universal data on which to make good carbon decisions at every stage of infrastructure delivery and management.
Finding solutions to that and other barriers to climate success is now down to industry, and industry must help governments, public bodies and the world as a whole to understand how it can be done.
Strategic global infrastructure approach
If we are to overcome the highly varied blockers and barriers that hold back climate success, we need to recognise that no one company or any one part of the infrastructure sector can do it alone. The investment shortfall, for example, cannot be resolved by the investment sector if the design and contractor sectors don’t deliver efficiently and effectively, and if the insurance and legal sectors cannot reduce project risks to levels that make a project deliverable.
For that reason, in the Spring of 2023, FIDIC will bring together the global industry leaders from across all of the parts of the infrastructure sector for the first ever Global Leadership Forum Summit in Geneva. This summit will see infrastructure industry leaders examine how we set a collective path and agreeing a white paper that spans the whole of the industry.
In doing so, we can set a strategy with leadership from the very top that will help to establish practical solutions to the challenges that industry can solve by itself. At the same time, we will provide an expert roadmap and resource for governments and public bodies around the world to consult on how to procure, invest and deliver the rapid decarbonisation that the world needs.