This paper has been prepared by FIDIC President Tony Barry on the basis of personal research and thinking. While he has 45 years of experience in infrastructure design and construction, he is not an expert on climate science or environmental engineering.
Special acknowledgement and appreciation is extended to those who have reviewed drafts of the paper including Professor Peter Guthrie, Vice-President, Royal Academy of Engineering UK and Director of Research in Sustainable Development at Cambridge University, Mr Graham Pontin, FIDIC Director of Policy, External Affairs & Communications and Ms Tracey Ryan, Chair and Vice Chair Robert Spencer of the FIDIC Sustainability Committee and the Sustainability Committee itself whose members have contributed to the commentary.
The world’s population is expected to grow from the estimated 8 billion in 2022 to 9.7 billion in 2050. Half of the world’s population growth is expected to occur in Africa with the population of sub-Saharan Africa expected to double by 2050. These trends are occurring with a decrease in fertility rates globally from 2.5 children per woman in 2019 to 2.2 in 2050 and an increase in life expectancy from 72.6 years in 2019 to 77.1 years in 2050.
In 2022, the UN suggested we might expect slowing growth in population in Europe North America and other developed economies, an absolute reduction in China and population increases in developing economies in Sub-Saharan Africa and Asia. Sub-Saharan Africa is expected to account for most of the growth in coming decades.
In its “A Net Zero carbon futures for cities” report the World Economic Forum suggests that “by 2050, 68% of humanity will live in cities, resulting in higher energy consumption, greater infrastructure needs, and increased carbon emissions.”
The pressure of population growth and urbanisation on demand for infrastructure will only increase. The re-distribution of population through net migration (80.5 million 2000 - 2020) is not expected to materially impact demand for infrastructure. The demand, however, will rightly be exacerbated by the ambition of those in developing economies who are ambitious for a better future.
We can also look at this issue with an understanding that global greenhouse gas emissions attributable to infrastructure are estimated in the 2021, UNOP, UNEP and Oxford University report “Infrastructure for Climate Action” to be 79% of global emissions. Further, the costs associated with adaptation of infrastructure are estimated to be 88% of all global adaptation costs.
To complicate the issues involved, there is evidence that infrastructure contributes significantly to the achievement of the UN Sustainable Development Goals.
The Netherland Environmental Agency estimated that in 2019 global greenhouse gas emissions reached 51.7 gigatonnes in CO2 equivalents, plus an (very uncertain) estimated 7 gigatonnes from land use changes.
On the basis of the figures quoted above, the suggestion may be made that the infrastructure sector may be responsible for approximately 41 gigatonnes of that total in 2019.
The term ‘net zero’ refers to the relationship between the amount of greenhouse gas generated and the amount removed from the earth’s atmosphere.
Net Zero carbon dioxide (CO2) emissions are achieved when anthropogenic CO2 emissions are balanced globally by anthropogenic CO2 removals over a specified period. Net Zero CO2 emissions are also referred to as carbon neutrality. That means we will reach net zero when the amount we generate is equivalent to the amount we remove from the atmosphere. Our strategy will involve reduction, compensation and removal.
So for infrastructure to have reached net zero, say in 2019, we would need to have removed or reduced 41 gigatonnes of CO2 equivalents in that year.
We also have seen various estimates of the need for infrastructure and the increasing gap between demand and supply. That gap is supposedly caused by a number of factors including population growth, economic growth, chronic under-investment by governments and funding, policy and regulatory constraints.
If we assume that infrastructure development will continue at current levels, we need to find ways of removing or reducing over 40 gigatonnes of CO2 equivalent GHG emissions from infrastructure.
Breaking it down, for the purposes of this discussion, it has been assumed that 50% of emissions arise from infrastructure development and 50% from operations.
In looking at the challenge, the principles of the circular economy provide some guidance as to strategic direction:
• eliminate waste and pollution
• do no significant harm
• circulate products and materials
• regenerate nature and enhance biodiversity.
In looking at the circular economy in 2019, OECD researchers Elkins et al identified 114 definitions, starting with the Ellen MacArthur Foundation 2013 definition: “A circular economy is an industrial system that is restorative or regenerative by intention and design. It replaces the ‘end-of-life’ concept with restoration, shifts towards the use of renewable energy, eliminates the use of toxic chemicals, which impair reuse, and aims for the elimination of waste through the superior design of materials, products, systems, and, within this, business models.”
The European Parliament describes “The circular economy is a model of production and consumption, which involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products as long as possible. In this way, the life cycle of products is extended.”
From an infrastructure perspective, there are many elements which go beyond the obvious components of these definitions, including situational and cultural change, managing demand to reduce it and avoid peaks, planning to optimise scope, minimise impact and enhance the natural environment and biodiversity, design to minimise the use of resources and maximise nature based solutions, select materials to reduce embodied energy and minimise harm, construction to minimise consumption and waste and operations to maximise efficiency and minimise energy consumption and cost. There are many more.
While the focus on the ERC sequence (eliminate, reduce and compensate) provide an important contribution to any strategy, we must be concerned that the fundamentals of population growth, urbanisation, economic ambition and well-being are more likely to drive infrastructure development and carbon emissions at a considerable rate and present a considerable risk unless significant changes are made.
At the same time, with increasing severity and frequency of climate related events, infrastructure projects need to be planned, design and constructed to be more resilient such that their purpose and function can be maintained and/or restored quickly after adverse climatic events.
Even in sophisticated jurisdictions, there is little objective assessment and recognition that:
• existing mature high performing carbon sinks are being destroyed or damaged by new development
• existing carbon generating land use is being replaced by infrastructure
• new infrastructure may incorporate nature-based solutions / elements which contribute to carbon absorption.
We can assume that infrastructure development will continue to generate GHG’s over the coming years, albeit many innovative firms and individuals are focussed on achieving net zero.
As an industry, using carbon credits may appear to be an attractive option. However, this does not really address the issue and there is little evidence that there would be adequate carbon credits to cover the GHG emissions generated through infrastructure development and operation.
It is expected that carbon taxes will play an important part in guiding a focus of reducing carbon emissions in jurisdictions where these are adopted. Globally, however, it is unclear how taxation will influence change in many economies.
If the assumptions described in this paper are correct, how do we move to net zero?
This is a complex question and requires significant research and analysis.
While many systemic initiatives may contribute to GHG reduction, we are yet to quantify the contribution each may make. There are many rating systems around the world and over recent years very significant advances have been made developing carbon calculators to estimate carbon emissions.
By way of example, in a report “Net Zero Future Delivered Through our Infrastructure Pipeline” associations in the industry in Australia suggest that infrastructure contributes about 70% of national emissions and that from a materials viewpoint on transport projects Asphalt contributes 16%, Construction steel 10%, Reinforcing steel 5%, Concrete and cement products 25%, Construction operations 24%, Material transport 8% leaving 12% undefined. To date, it is suggested that projects are able to deliver an 11% reduction in CO2 emissions and a 68% reduction in energy use.
What is evident that each infrastructure project is bespoke by virtue of purpose, demand, location and situation. Therefore, each project team will need to focus on a unique solution or combination of many methods to move towards or to achieve ‘net zero’.
From a policy viewpoint, it is important to develop a ‘net zero’ portfolio strategy and plan. In simple terms, we are trying to achieve a 100% reduction in GHG emissions. Policy makers will need to determine whether we try to achieve this at a sector level, a system level, a portfolio level or on every project.
In a political and policy context, there is a significant contribution to GHG emission reduction by avoiding construction of new assets through repurposing of existing assets and influencing demand through more holistic planning and implementation.
In 2023, as an industry, we do not know whether we can achieve net zero in infrastructure development and operation but it is incumbent on the industry to develop an approach which will give the world the best chance of doing so, while delivering the significant economic and social benefits we know are so needed in our world.
It would appear that focussing on achieving net zero on a project by project basis will be the most instructive and achievable in the short term. It will enable the industry to build understanding, skills, methods and experience which is estimated, measured, monitored and reported.
However, when considered across a broad portfolio or national infrastructure asset base, we will need many projects to deliver net carbon absorption to compensate for those essential projects that do not. Such an approach may involve components such as:
• Understand, analyse and re-frame demand
• Build social capital and values focussed on de-carbonisation and biodiversity enhancement
• Consider both build and no-build and alternative technology solutions
• Plan holistically to ensure system compatibility, multi-system integration and longevity
• Develop a baseline to define existing land use and environment
• Value environmental assets
• Map pre-development GHG emissions
• Clearly define project purpose and what success looks like
• Assess consequential impacts and opportunities
• Develop a GHG emission elimination or reduction strategy
• Develop environmental strategy to eliminate pollution or damage to and improve and enhance habitat and environmental value
• Develop a strategic approach to achieving resilience
• Optimise route selection to minimise footprint and the extent of construction required
• Re-use and re-purpose existing assets
• Employ nature-based solutions
• Design for innovation and value engineering
• Minimise scale and construction in design
• Select low embodied energy materials
• Reduce / remove non-functional elements
• Estimate, measure and monitor net GHG emissions through the life of the infrastructure
• Preference low carbon technologies and materials
• Preference offsite controlled manufacture and site erection ahead of in-situ construction
• Optimise material transport and handling
• Use renewable energy for all construction and operations
• Minimise waste through effective procurement and re-use
• Manage operations and maintain the asset to ensure environmental performance, GHG minimisation and resilience are achieved
• Re-purpose non-functioning infrastructure assets effectively
• By concentrating on individual projects, methods can be piloted and experience documented and shared so as to be more widely applicable over time.
Given that absorption of carbon at scale can occur using natural systems connected with soil, planting and afforestation, the development of infrastructure projects should balance GHG emissions by including natural systems and other technologies which facilitate GHG absorption. Such an approach would necessitate widening the scope and remit to assign responsibility for project performance to include carbon as well as service.
Kadefors et al explore the need for policy and practice development in procurement, contractor selection and contracting to give effect to GHG emission reduction. It is clear that while some jurisdictions and some countries are implementing GHG emission reduction strategies in infrastructure, the industry is a long way from a globally standardised approach and adoption.
Underpinning the achievement of ‘net zero’ in infrastructure is GHG emission estimation, modelling and measurement. Then tracking GHG emissions from an existing site, through planning, design and construction is vital to evidence achievement, to manage effectiveness and feed learnings back into the industry so further improvement can be achieved. Planners, designers and constructors have the drive and motivation to be innovative and achieve net zero but they need the training, tools and the data to support them.
While looking at GHG emissions holistically is complex, beginning our journey by looking at carbon emissions appears to be beneficial. Taking a whole-of-life approach to carbon emissions in infrastructure of a project can be facilitated by considering emissions from each stage of a project, including:
• Existing site land use
• Site investigations
• Planning and design
• Extractive resources
• Manufactured materials
• Off-site construction activities
• On-site construction activities
• Operational activities
• Natural project elements
• End of useful life
• Re-purposing assets
Further development of existing GIS mapping, BIM, and digital twinning technologies are expected to be significant enablers of carbon emission and sequestration estimation and measurement. Digital twinning facilitates visualisation, operational scenario testing, construction sequencing and enables workflow process design and management.
In line with the development of these technologies, it would appear feasible to build carbon emission and sequestration over the life of a project from inception to end of life and hence build carbon balance sheets for land use options, for do nothing and build options which can be estimated in planning and monitored and reported throughout all phases of project development and operation.
Carbon balance sheet 2030
This approach is likely to be developed in a similar timeframe as the valuation of environmental assets. A project developed over recent years to value the environmental assets of the Burnett-Mary Region, Queensland Australia has established an environmental account which may be used to assess the impact of projects of habitat and natural environmental resources.
Valuing project options has historically been done on an economic and financial basis, with social and environmental considerations being made on a comparable basis. Moving forward, we will be able to include much more in the valuation of infrastructure assets such as the following five perspectives: economic, social, biodiversity, emissions and resilience, using a balance sheet approach. In doing so, we can improve the quality of our planning, design, construction and operations and improve the value of infrastructure assets for owners and investors.
By way of example, in their article in Nature Climate Change, Harris et al et suggest that “global forests were a net carbon sink of −7.6 ± 49 GtCO2e yr−1, reflecting a balance between gross carbon removals (−15.6 ± 49 GtCO2e yr−1) and gross emissions from deforestation and other disturbances (8.1 ± 2.5 GtCO2e yr−1).”
The paper commences with a statement:
• “Climate change must be addressed by various actors including scientists, policymakers, companies, investors and civil society, all of whom operate under different mandates and capabilities.”
and concludes with words including the following:
• “Our analysis reinforces the need to reduce gross emissions from tropical deforestation as a climate change mitigation strategy, while also highlighting the substantial but often underappreciated contribution of intact primary and older secondary forests to carbon dioxide removals. Quantifying gross emissions and removals separately and consistently across all forest lands—and producing maps in addition to tabular statistics—improves transparency in the accounting of factors and geographies contributing to the global net forest GHG flux. It also provides a framework to integrate new and improved data sources over time.”
In looking at this thinking, one take away is that there is opportunity for engineers to incorporate this approach into infrastructure. As this thinking and techniques are developed, the incorporation of carbon pricing mechanisms and the integration of carbon into asset valuation will also most likely develop and may have a profound impact of infrastructure investment decisions. If this is so and the balance sheet approach is developed further to address environmental assets, it is easy to conceive that valuation of resilience and risk will also develop so as enable investors to target sustainable development more successfully.
This paper was referred to and discussed in both plenary sessions of the GLF and a workshop with a smaller group of GLF members. The latter was facilitated by Robert Spencer (AECOM) and Prof. Peter Guthrie, University of Cambridge.
The GLF recognised the significance of carbon emissions generated by infrastructure and the services it supports and that both need to be considered if we are to be successful in reducing carbon emissions. In other words, in making a decision to proceed with an infrastructure project, we are accepting the associated operational carbon emissions are a component of the project emissions.
It recognised the usefulness of carbon emissions as a proxy for all greenhouse gas emissions in infrastructure, noting that there will be some specific projects where all greenhouse gas emissions should be addressed.
The greatest opportunities to influence CO2 reduction occur at the early planning and design stages of the asset lifecycle.
There is currently no adequate standardised system for accounting for, budgeting and balancing the relative carbon impacts and contributions to global warming of different infrastructure project concepts and designs across sectors over time and between jurisdictions, nor is there a standardised way of aggregating predicted emissions from construction, operation and maintenance of infrastructure projects to facilitate effective carbon budgeting for infrastructure.
It accepted that there is a responsibility and opportunity for consulting firms working in infrastructure and the built environment to contribute to emission reduction, noting that in buildings very considerable work has been done to reduce operational emissions.
The GLF recognised that the estimation of whole of life carbon emissions is feasible and an appropriate and relevant approach to objectively compare project options, to drive innovation to reduce carbon emissions and to monitor and manage operations.
The GLF is of the view that a method and solution for transparently measuring, accounting for and carbon budgeting projects across jurisdictions and developing carbon balance sheet methods for individual projects to align on carbon source and sink outcomes is vital to reducing carbon emissions globally.
The GLF is of the view that such an approach will facilitate a more effective and robust assessment approach for judging the merits of different infrastructure project designs and concepts for the benefit of more informed ESG investment and, additionally, more effective management of carbon emissions over a project’s lifecycle by the owner/operator and their designer / constructor / manager partners.
The GLF proposes that use of carbon balance sheets throughout the whole of life of infrastructure assets is an appropriate method to develop, manage and monitor the scope and performance of the asset and that in doing so can be applied at a project, portfolio, industry or national level to manage against carbon emission budgets.
The GLF is committed to adopt the use of carbon emission budgets and balance sheets in developing the scope, the planning, design, construction and operational solutions. It recognises that carbon balance sheets need to be developed, monitored and managed throughout all stages of infrastructure planning, design, construction, operation and re-purposing.
The GLF will work with FIDIC to develop guidelines for the development of carbon balance sheet and budgets. 03
Firms represented at the GLF are prepared to participate in research and pilot projects to explore methods, technology, standards to enable carbon balance sheets to be used for infrastructure assets.
At a project level, the GLF recognises that the use of standards such as (PAS 2080) have been developed along with broader sustainability rating tools. It is also noted that materials data sheets are beginning to include emissions data. Nonetheless, there is still limited data available and limited access to relevant data for nationally or locally sourced materials for use in project assessment. It is considered vital that this information becomes available if the industry is to be able to make objective assessments using carbon balance sheet information.
There are a number of universities organisations and consulting firms who have begun to build databases detailing attributes and embodied carbon (emissions generated through the manufacture) in construction materials. Much of this information is not accessible for the broader consulting industry and many firms will not have the resources to build such databases for their own use. 04
A number of firms represented at the GLF committed to make data on embodied carbon available to FIDIC under an appropriate quality management and governance regime for use in research and by project teams and infrastructure professionals.
FIDIC and the GLF will work
to progress this initiative.
The GLF recognises that baseline Carbon emission data for different types of infrastructure is not available at a high level for use in infrastructure planning and regards this as a high priority to guide future infrastructure planning and investment decisions.
The GLF and FIDIC will work together to develop a scope of work which includes the following:
• Interrogate the Nationally Determined Contributions (NDCs) of countries to develop a composite picture of global construction and infrastructure required emissions reductions over a twenty-year time horizon (planetary boundary approach)
• Simultaneously, generate a database of typical infrastructure asset component carbon footprints, which can be used, scaled and replicated across projects (e.g. typical asset components of a 100km section of road, rail and its associated carbon footprint)
• From the above, develop typical baseline carbon budgets for a selection of infrastructure assets under agreed definitions and align these with the NDC to create proxy carbon budgets for infrastructure types by country
• Develop a menu of options for use in carbon balance sheets for carbon sink options for on-site and off-site sequestration (this would need to be biome specific, perhaps, tropical, Mediterranean, temperate and boreal habit types initially) requirements. 06
The GLF will further explore technology support and technology solutions among it members and develop a proprietor agnostic description of how technology may be used to support the use of carbon emission data and carbon balance sheets in infrastructure.
In using carbon balance sheets, the use of carbon cost rather than carbon price is considered to be more relevant to the assessment of infrastructure assets, where the cost of carbon is based on global emissions and the total estimated cost of climate related damage, repair, reconstruction, building in resilience and adaptation globally. 07
The GLF and FIDIC will work to identify appropriate partners and bodies who may assist to establish the global average cost of carbon dioxide emissions, based on appropriate costs of climate related damage, repair, reconstruction, building in resilience and adaptation globally.
The GLF recognises that FIDIC is in a somewhat unique position and that FIDIC was ideally placed to take a lead role in the development, coordination and promotion of the use of carbon balance sheets in managing and reducing infrastructure carbon emissions.
At the same time the GLF recognised that it was unlikely that FIDIC would have the financial resources to take this initiative forward.
The GLF also recognised that there are already a number of bodies working on infrastructure carbon emissions and various aspects of the problem. It noted it would be advantageous to access the work being done by some universities, bodies such as World Business Council for Sustainable Development (WBCSD), World Wildlife Fund for Nature (WWF), private firms such as Schneider Electric, Siemens and Holcim and built environment consulting firms such as AECOM, Arup, Aurecon, Ramboll, Arcadis and Mott MacDonald. 08
FIDIC will work with the GLF to develop a statement of the scope of work required develop the industry’s approach to using carbon balance sheet in infrastructure.
The GLF will work with FIDIC to identify potential partners who may assist to support the cost of research and development to globally implement the use of carbon balance sheets infrastructure. 09
Firms represented at the GLF were prepared to contribute in-kind support and collaborate to enable FIDIC to develop the application of carbon balance sheets in infrastructure.
The GLF sees this initiative as important to the future of the industry and wishes to remain involved to ensure the firms are directly engaged in the development of the carbon balance sheet approach. 10
TRENDS IN GLOBAL CO2 AND TOTAL GREENHOUSE GAS EMISSIONS 2020 Report J.G.J. Olivier and J.A.H.W. Peters Netherlands Environmental Agency December 2020
INFRASTRUCTURE FOR CLIMATE ACTION. Thacker S, Adshead D, Fantini C, Palmer R, Ghosal R, Adeoti T, Morgan G, Stratton-Short S. 2021. UNOPS, Copenhagen, Denmark.
The Circular Economy: What, Why, How and Where. Background paper for an OECD/EC Workshop on 5 July 2019. Paul Ekins, Teresa Domenech, Paul Drummond, Raimund Bleischwitz, Nick Hughes, Lorenzo Lotti UCL Institute for Sustainable Resources, University College London for the OECD and European Commission
A NET ZERO FUTURE: Delivered Through Our Infrastructure Pipeline. Australian Contractors Association, Consult Australia, Infrastructure Sustainability Council and Autodesk. 2022
EPiC: Environmental Performance in Construction. A database of embodied environmental flow coefficients. Crawford R, Stephen A, Prideaux F. University of Melbourne. 2019
Designing and implementing procurement requirements for carbon reduction in infrastructure construction - international overview and experiences. Kadefors A, Lingegard S, Uppenberg S, Allan-Olson J, Balkan D. 2020
United Nations Department of Economic and Social Affairs, Populations Division (2022) World Population Prospects 2022: Summary of Results. UN DESA/POP/2021/TR/NO. 3
Nature Climate Change, Forests Absorb Twice as Much Carbon As They As They Emit Each Year and their paper Global maps of twenty-first forest carbon fluxes Harris N, Gibbs D, Baccini A, Birdsey RA, De Bruinn S, Farina M, Fatoyinbo L, Hannsen MC, Herold M, Houghton RA, Potapov PV, Suarez,DR, Roman-Cuesta RM, Saatchi SS, Slay CM, Turubanova, Tyukavina A. . World Resources Institute.
FIDIC would like to thank the following for their insights and contribution to the publication of this report.
Anthony Barry, the principal author of the paper
Robert Spencer, AECOM, co-facilitator of the GLF workshop and co-author of the GLF conclusions. Professor Peter Guthrie, Cambridge University, co-facilitator of the GLF Workshop and reviewer.
FIDIC Board for their review and support.
FIDIC Sustainable Development Committee, Chair Tracey Ryan, Vice Chairs Robert Spencer and Natalie Muir and its members, especially Maria Rozpide San Juan.
FIDIC CEO, Dr Nelson Ogunshakin and Policy Director, Graham Pontin for their input, reviews and support
FIDIC GLF Advisory Board, including Sara Lipscombe.
FIDIC Secretariat.
FIDIC Global Leadership Forum Summit 2023 attendees.
FIDIC would like to give a very special thanks to all the delegates from its member associations who attended the inaugural Global Leadership Forum in Geneva on 27−28 April 2023, without whose support and engagement this report wouldn’t be possible.
AECOM
AEO group
Arcadis
Artelia
Asplan Viak
Atkins − member of the SNC − Lavalin Group
Aurecon
Basler & Hofmann AG
Bentley Systems
Buro Happold
CDM Smith, Inc
EBRD
EFCG
Eptisa
Genève Aéroport
GOPA Consulting Group
HDR
IMEG Corp
Intercontinental Consultants & Technocrats Pvt Ltd
JPMorgan Securities LLC
Morrison Hershfield Group Inc.
Mott MacDonald
Pinsent Masons
POWER Engineers Incorporated
Ramboll
Schneider Electric
Solar Impulse Foundation
University of Cambridge
VHB
World Business Council for Sustainable Development
WSP
FIDIC is a product of its member associations without which FIDIC would not exist. Whilst all member associations can be found on the FIDIC website, in this report we have engaged with FIDIC member associations on the detail of our work and we would like to thank the following member associations for their support for our research.
This document was produced by FIDIC and is provided for informative purposes only. The contents of this document are general in nature and therefore should not be applied to the specific circumstances of individuals. Whilst we undertake every effort to ensure that the information within this document is complete and up to date, it should not be relied upon as the basis for investment, commercial, professional or legal decisions.
FIDIC accepts no liability in respect to any direct, implied, statutory, and/or consequential loss arising from the use of this document or its contents. No part of this report may be copied either in whole or in part without the express permission in writing.
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