May 5th 2020

Investing to Protect Future Generations

Investing to Protect Future Generations

The coronavirus pandemic has undoubtedly led to a significant reduction in carbon emissions. However, governments are desperate to restart their economies and we will quickly see carbon emissions return to normal as the global economy starts to recover.

As countries look to invest in their economies, I proposed in my last article that a large portion of that investment should be used to drive decarbonisation. This will have several major benefits:

  • Reduced carbon emissions
  • Reduced energy costs for building owners/tenants
  • Improved air quality resulting in better health of the urban population
  • Creation of primary jobs in the decarbonisation sector
  • Creation of secondary jobs supporting the decarbonisation sector
  • Long term benefits to humanity by avoiding severe climate change issues

This is a major opportunity to restart our economies and avoid a major catastrophe in a few decades time, when climate change becomes even more detrimental to the planet.

Two major encouraging steps were taken recently:

  • The European Union (EU) recently announced their ‘Green Deal’. The purpose of the Green Deal is to provide sufficient investment into the EU economy such that it is carbon neutral by 2050.  
  • Environment ministers from 30 countries met in a two-day online conference at the end of April 2020. This conference was the 11th Petersberg Climate Dialogue (PCD) and the focus of the conference was to promote a "green" economic recovery after the pandemic is over and to get agreement on ambitious carbon cuts.

The EU Green Deal was not a direct response to the coronavirus pandemic. However, it is exactly the approach which is needed to get the EU economy back on its feet and help mitigate a much greater threat to humanity and the global economy. Countries outside the EU should look to follow this example.

Ursula von der Leyen, President of the European Commission, recognises the problem: “The cost of the transition will be big, but the cost of non-action will be much bigger.”

Without action on climate change, the EU predict, in the lifetime of our children, that they will see:

  • 400,000 premature deaths per year due to air pollution
  • 90,000 annual deaths as a result of heatwaves
  • 660,000 additional asylum applications per year in the EU at a 5°C temperature increase
  • 16% of species at risk of extinction at a 4.3°C temperature increase

There will also be many more deaths due to extreme storms, floods, etc.

Scale this up globally and the coronavirus is small in comparison. We may get a vaccine for the virus – but there is no vaccine for climate change.

The EU is also looking at creating the European Climate Law that will transform political promises into a binding legal obligation, sending a strong political leadership signal and providing a trigger for investment. The EU plans to write the climate neutrality target for 2050 into law, and propose the path to get there. It will give European citizens and businesses the framework to achieve this transformation:

  • A focus on the effective transition towards a fair and prosperous society, with a modern, resource efficient and competitive economy.
  • A renewed focus on adapting to the impacts of climate change to strengthen Europe’s resilience, including for its vulnerable communities.
  • An EU-wide legal target for climate neutrality by 2050 that binds the EU Institutions and national governments. 

The EU state that reaching this target will require action by all sectors of the EU economy, including:

  • Investing in environmentally-friendly technologies
  • Supporting industry to innovate
  • Rolling out cleaner, cheaper and healthier forms of private and public transport
  • Decarbonising the energy sector
  • Ensuring buildings are more energy efficient
  • Working with international partners to improve global environmental standards

To find out more about the ‘EU Green Deal’ you can visit the European Commission website.  

The EU will also provide financial support and technical assistance to help people, businesses and regions that are most affected by the move towards the green economy. 

Encouragingly, cities such as Paris and Berlin are part of a growing list of EU capitals asking for the EU Green Deal to be placed at the heart of the EU’s post-pandemic recovery plan.

EU Environment ministers wrote, “The lesson from the COVID-19 crisis is that early action is essential,” and “we call on the Commission to use the European Green Deal as a framework” to shape the EU’s upcoming recovery plan “and thereby to keep momentum by implementing its initiatives.”

“We need to scale up investments, notably in the fields of sustainable mobility, renewable energy, building renovations, research and innovation, the recovery of biodiversity and the circular economy,” the ministers add.

I believe there has been a recent agreement on a €540 billion package to help EU countries withstand the economic shock of the COVID-19 outbreak. EU heads of states and governments are to discuss the next stage of the recovery phase. If part of this package was directed at decarbonisation, it could demonstrate to the world how to address decarbonisation head on.

At the Petersberg Climate Dialogue conference, the UN Secretary General, Antonio Guterres, said that climate change was a deeper problem than the coronavirus. His view was that the only answer to the problem was brave, visionary and collaborative leadership and that the same leadership was needed to address the threat of climate change.

Mr. Guterres confirmed that delayed climate action will cost us vastly more each year in terms of lost lives and livelihoods, crippled businesses and damaged economies. He proposed that we plan our recovery tackling climate change, protect the environment, preserve biodiversity and ensure the long-term health of humanity.

He proposed six actions to accelerate the recovery from the coronavirus:

  1. As we spend trillions to recover from Covid-19, we must deliver new jobs and businesses through a clean, green and just transition. Investments must accelerate the decarbonisation of all aspects of our economy.
  2. Where taxpayers’ money is needed to rescue businesses, it must be creating green jobs and sustainable and inclusive growth. It must not be bailing out outdated, polluting, carbon-intensive industries.
  3. Fiscal firepower must shift economies from grey to green, making societies and people more resilient through a transition that is fair to all and leaves no one behind.
  4. Looking forward, public funds should invest in the future, by flowing to sustainable sectors and projects that help the environment and climate. Fossil fuel subsidies must end, and carbon must have a price and polluters must pay for their pollution.
  5. The global financial system, when it shapes policy and infrastructure, must take risks and opportunities related to climate into account.  Investors cannot continue to ignore the price our planet pays for unsustainable growth.
  6. To resolve both emergencies, we must work together as an international community.

Like the coronavirus, Mr. Guterres pointed out that greenhouse gases respect no boundaries. He also highlighted that, as the G20 countries emitted about 80% of the global carbon emissions, they should all commit to be zero carbon by 2050.

My particular interest is in the Decarbonisation of the Built Environment. The Built Environment represents about 40% of the annual carbon emissions. At this time, the quality of assessing how to decarbonise is generally extremely poor.  

Nevertheless, someone needs to co-ordinate the global effort – from getting agreement at the COP meetings to ensuring that any decarbonisation project actually meets the targets that were set.  In addition, standards, set by an independent organisation, such as UNEP, need to be made across the design, operation and refurbishment stages of any building to avoid classic problems such as oversized equipment, operational inefficiency and the performance gap. 

Accredited analysis tools and technicians are also required if we are to decarbonise both from a financial and a carbon perspective. As well as appropriate, physics based Digital Twins, to predict the decarbonisation of the built environment. These digital twins need to support building performance through the complete lifecycle of the building and the communities they reside.

I would also expect that performance contracting would play a large part of this process. Currently, the ‘ESCO’ tends to have a much better reward than the client. There needs to be a fairer reward for the client. However, if the national government is funding the project there would need to be a fair saving so all parties benefit.

I sincerely hope the EU and the minsters at the Petersberg Climate Dialogue will follow through with their plans to invest in decarbonisation as a way to regrow the global economy.  

Only if our governments invest now do we have a chance of minimising the impact of climate change. We know from the coronavirus pandemic that delay will be much more costly than taking action.

Unfortunately, neither China nor the USA appear to be willing to reduce fossil fuel consumption and take responsibility to decarbonise. Under these circumstances it is probably unsurprising that there is resistance to the EU green deal stimulus.  

Without China, the USA and the EU being leaders and making the necessary commitments the opportunity to reduce the more serious impacts of climate change will not be achieved. 

I implore these governments to be Leaders and show the rest of the world the way forward for their children, and the children of the rest of the world.