Have we put too many eggs in one basket with our net-zero goal?

A couple of weeks ago, Arcadis submitted our contribution to the Skidmore review. Even after Liz Truss resigned as prime minister last month, we took the view that the review’s agenda was too important and too urgent to be dropped and the review’s alignment of decarbonisation with the growth agenda made good sense.

With a reluctant Rishi Sunak having taken his growth-aligned message to COP27 it not only looks like we were right to continue, but also that the growth agenda should help to get the UK’s net zero investments over the line.

However, I am getting very nervous. That is in no small part because of the UN environment agency’s latest damning progress report which  highlights data showing that the world is on track for temperature rises of between 2.4C and 2.6C by the end of the century.

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On day one of COP27, UN secretary-general Antonio Guterres told delegates that the world was “on a highway to climate hell, with our foot still on the accelerator”. The best-case scenario is a 1.8C rise, but as yet there is no policy pathway for the world to reach this much less ambitious target.

Despite this grim outlook, I do not think that we have an option other than to rely on governments and world bodies such as the UN to find ways and means of addressing the climate crisis. Climate change activists are entitled to their different viewpoint, but the issues are so complex and so multi-lateral that isolated actions, no matter how radical, are unlikely to break the logjam.

However, I am nervous for other, more practical reasons. In the world of capital projects, we know that progress towards net-zero targets is incredibly hard. It will get even harder as the easy wins are delivered. Our response to the Skidmore review highlighted blockers in existing policy frameworks and unintended consequences of implementation that might further knock UK efforts of course. What will happen if the UK misses its net-zero target? Or if other countries miss theirs? Our plan A needs a plan B… just in case.

The UK needs Sizewell C, but we also need the project to be future-proofed

I am thinking of course about resilience. Resilience to climate change, extreme weather impacts, rising sea levels and even mass migration. The Intergovernmental Panel on Climate Change looked at these issues in 2021 with their physical science basis report. It highlighted how solid the knowledge base for the impacts of climate change is and just how likely extreme events are going to become. 

Resilience is big business and a long-term proposition. 2022 marks the 10th anniversary of Superstorm Sandy, which brought New York to a halt, shutting down the Stock Exchange and paralysing large parts of the subway network. Arcadis has been working with the city of New York administration over many years to develop mitigation plans. 

Part of the current plan, the Big U, proposes to extend Lower Manhattan’s shoreline by two blocks and to elevate some land by 20ft above sea level. If New York needs this level of protection, what measures are we planning for the UK and other counties for new risks associated with unmitigated or even partially mitigated climate change?

Yet resilience has yet to find its place at the centre of the climate change agenda. Consent for Sizewell C was granted in June against the planning inspectors’ recommendations even though there are significant uncertainties in connection with the site’s permanent freshwater supply. After EDF restricted production at many of its river-based nuclear plants in France this summer, I am sure that the availability of water will be going up the risk agenda. The UK needs the project, but we also need the project to be future-proofed.

At a different scale, I was also surprised that the UK’s 2021 heat and buildings strategy mentioned overheating only five times in 240 pages. As we know, the strategy advocates the progressive net-zero retrofit of the UK’s 19 million homes, but that investment should include making buildings resilient to all known climate change risks, including overheating. There is no point retrofitting twice and resilience should be at the heart of the strategy.

An honest conversation about what is achievable, and how the gap between ambition and deliverability can be closed, is well overdue

In retrospect, perhaps the scope of Chris Skidmore’s review is too narrow. It should also be looking at linking both net zero investments and resilience investments to the growth agenda. Places and infrastructure that have been considered with resilience in mind will be at less risk of becoming “stranded assets”. Work to make our built environment better prepared for what the future brings will create jobs at home and new exportable skills for the global economy. There is still time to make that change.

Ironically, the resilience imperative could also help to diversify construction’s own climate change agenda and reduce its exposure to high-risk net-zero projects. With BritishVolt looking for a buyer and Siemens Gamesa laying off 2,900 of its global workforce, net-zero mega projects are starting to look less of a sure bet than they did before covid-19. Setting ambitious targets to build gigafactories and giant windfarms when every other major country is doing the same does not guarantee that they will get built. 

An honest conversation about what is achievable, and how the gap between ambition and deliverability can be closed, is well overdue. Such a conversation will help all businesses in our sector to better plan their diversification and future contribution to the world’s sustainable future.

I am not giving up on plan A, and I will be looking out for concrete signs of progress in the wake of COP27. However, I am going to guard against the magical thinking that a plan A based on decarbonisation is the only plan worth having. Even as we accelerate to a net-zero future, we also need to invest in a resilient present… just in case.

Simon Rawlinson is a partner at Arcadis and a member of the Construction Leadership Council