By Dr. Jessica Turner ,
ACII, Managing Director, Head of International Catastrophe Advisory, Guy Carpenter
Despite the disruption and widespread economic contraction of 2020 causing annual global greenhouse gas emissions to decrease by 7%1, the year was tied with 2016 for the warmest on record2. Climate change continues to be one of the most important issues of our day and making the necessary transformations to meet the challenge will transform every individual and every sector of the economy.
The construction industry will be impacted in two fundamental ways. The first is through the critical need to reduce its own carbon footprint, which is generally understood to consist of embedded carbon (the carbon used to produce materials), and operational carbon (the carbon used in operating the built asset). Combining these two types of emissions, the sector accounts for almost 40% of energy-related carbon emissions3. A 2020 report by the International Energy Agency (IEA)4 found that emissions from buildings were not on track to meet climate goals. Governments around the world are reacting to the need to transition their economies; for example, in July 2021, the European Commission adopted a package of proposals to reduce the EU’s greenhouse gas emissions by 55% in the next decade.
A variety of activities and innovations are needed to correct the current trajectory of construction sector emissions. It is critical that energy efficiency improves in design and construction, as well as the operations of buildings. This requires stricter energy efficiency codes on new builds to avoid locking in future emissions and the renovation of existing stock. Heating, especially in developed nations, must move away from fossil-fuel sources. Urban planning should consider carbon intensity, including district integrated smart grids to manage supply and demand. Incorporating clean energy, such a solar thermal or micro wind, into buildings is also important. Significant changes are also needed in the materials sector. Decarbonising steel and concrete production currently represent a significant challenge. The alternative is to substitute such materials, where possible, for lower-carbon intensity products, and increase recycling. To increase the ability to reuse and/or recycle materials, details of the materials included in built assets must be documented.
The second fundamental impact is through the increased physical risk to construction, property, and infrastructure from severe weather events, with attribution studies showing the role of climate change in increasing the likelihood of extreme events. Severe weather spans a variety of phenomena and the impacts of climate change on the frequency and severity of severe weather depends on the peril and the region.
Global temperatures are rising, and an increased risk of heat waves is one of the clearest consequences. At a certain level, extreme temperature can stop work on construction projects for health and safety reasons while also potentially compromising the structural soundness of materials, causing improper operation of machinery, and increasing fire risk on the site.
Heavy precipitation and flooding is another peril that is predicted to increase due to climate change. Severe circumstances can cause significant damage to project sites with excavations collapsing, exposed materials becoming waterlogged, and surfaces becoming slippery.
Although gales and high winds are also known to be a risk to construction, it is less certain how wind will be impacted compared to temperature and precipitation. Tropical cyclones are likely becoming more intense but mid-latitude windstorms have not yet shown to be influenced by climate change5.
Increasing frequency and severity of some natural hazards is not just relevant for construction projects themselves but also an important consideration during the design phase. The built environment is expected to be put under greater pressure from extreme events in the future, which will necessitate greater building resilience and require improved design, materials, and maintenance. Infrastructure in place now may not be fit for purpose under changed climatic conditions and may need to be retrofitted or replaced.
While the transformation to a Net Zero emissions construction industry will be difficult, it should and must be embraced. Enormous opportunities exist for those companies that develop new technologies, designs, and processes. Those that fall behind risk being made obsolete. If as a society we succeed in meeting the ambitions of the Paris Agreement, the construction sector will look fundamentally different in the next decades, but will be cleaner, more efficient, and more resilient.