Cynics may joke that if COP26 merely generates a lot of hot air, then that would at least provide a carbon-free alternative for power generation. This is certainly not a time for cynicism or flippancy, but like all of the best jokes, timing is critical to how we collectively address climate change.
In April 2021, the UK government set in law the world’s most ambitious climate change target, cutting emissions by 78% by 2035 compared to 1990 levels. This shortening deadline to become carbon neutral puts huge time pressure on both the technological innovation and the goods, services, systems and equipment needed to turn strategy into reality. It is imperative, therefore, that the outcomes of COP26 are as focused on what we need to do and, importantly, are equipped to do right away as they are on the longer term vision for a carbon zero future.
Investment in public transport will play a key part in this. The principal environmental benefit of HS2, for example, will be to provide the additional capacity for freight to be moved by rail rather than road. Rail schemes like HS2 and Northern Powerhouse Rail, the construction of wind turbines, and nuclear new build (if it is deemed to be an integral part of carbon zero power generation in the UK, with the exception of Scotland), will all require steel.
This is where we encounter the problem of how to tackle seemingly conflicted priorities. Steel is now in short supply, with production and operations at full capacity in the UK; supplies have been limited since 2020, with the situation deteriorating in recent months. The same applies to cement, an equally energy-dependent commodity.
Yet, how will demand for the steel needed for schemes that reduce carbon emission be satisfied when the Climate Change Committee has said in its policy recommendations for the Sixth Carbon Budget that the Government should adopt a target that all iron-ore based steelmaking reach near-zero emissions by 2035?
While there are alternative methods of power generation for steelmaking, such as hydrogen and carbon capture and storage, that produce lower emissions than traditional methods using coking coal, the steel industry is still at a transitional stage. With limited supplies, we are left then with the alternatives of going ahead with mining metallurgical coal in the UK, or facing increased emissions by importing it from producers as far away as Australia and Russia.
The equipment and services needed to deliver the infrastructure we all demand are similarly problematic. There is limited availability of electric and hybrid construction plant and that will only be exacerbated by growing demand from the Government’s plan to ‘build back better’.
And then there are, most importantly, the people and skills we need. Playing a part in creating a net zero infrastructure is an opportunity for the construction sector to appeal to more new entrants than ever before, if that enables it to shake off its ‘wheelbarrows and wellies’ image, but training and recruiting a workforce of sufficient scale will take time against a backdrop of an aging workforce and decades of skills shortages.
Yes, the firms that deliver public infrastructure must adapt and evolve to address climate change, but Government, both national and local, must recognise the realities of the challenges that the construction industry is facing. And that means the way they procure work must adapt and evolve too.
After all, the businesses that construct our vital infrastructure do not build it for sale, they do so in response to meeting public demand for those services that provide our quality of life, and Government policy must take that into account. If we want our infrastructure expectations to be met, we need a thriving industry to deliver it. Achieving that means a more equitable sharing of risk, realistic contract terms and conditions, and a less adversarial relationship between client and contractor.
So, the message to COP26 from an infrastructure perspective, is to listen to the industry and work with it to address the pressures and obstacles it faces, to gain a clear understanding of what can feasibly be achieved now, and how Government and industry can work together better on our journey towards net zero.
Guy Lawson is Principal at Business Critical, a former Director of CECA North West, and a Fellow and Member of the Institute of Economic Development
