Taking on the challenge of cutting carbon
How can asset managers respond to the challenge of balancing low-carbon development with ever increasing demand?
Recognising the challenge
The 2014 IPCC report on climate change states that while major climate change is now unstoppable, the worst extremes can be averted if fast, decisive action is taken to curb greenhouse gas emissions. To help slow the pace of climate change, many governments across the world – including all of those in the GCC – signed the Paris Accord committing to make efforts to limit emissions. The UAE, for example, has committed to increasing its share of renewable energy to 25% by 2021, while Saudi Arabia seeks to reduce its emissions by 130MtCO2 by 2030.
Nevertheless, such national greenhouse gas reduction targets are set against ambitious economic growth aspirations. Countries in the GCC, for example, all have ambitious targets to grow and diversify their economies in the coming decades. This growth is supported by some hundreds of millions of dollars per year investments by 2030 in critical infrastructure in the power, water, transport, communications and waste sectors. How can asset managers respond to the challenge of balancing low-carbon development with ever increasing demand?
Challenging the status quo
The UK’s Infrastructure Carbon Review asked over 100 companies just this question. The leading companies had worked out ways to cut carbon in their existing and new infrastructure and at the same time cut costs. This is because they looked at efficiency in infrastructure delivery through a new lens – the carbon lens, which is a good proxy for resource and cost efficiency. Carbon reductions can be made at any time, but the best outcomes are achieved when low-carbon thinking begins early on in the project lifecycle. Leading clients and their supply chains in other parts of the world have already achieved reductions in capital carbon of up to 39%, and 34% in operational carbon. These reductions were achieved in association with average reductions in Capex of 22%. Mott MacDonald has helped many of these industry-leading organisations globally, including the UAE, to reduce their carbon emissions and cost by providing design, programme management and carbon management advisory services.
At the planning stages, the root cause of the need should be challenged. Asset owners should ask themselves ‘do I need a new asset to meet the new service outcome?’ and ‘is there another way?’. They should start having another look at their existing asset base to decide whether they can maximise its use such that new demand is covered by building less. Think about how existing assets can be utilised better to get the same or greater outcomes. If new assets are needed, they should be ‘built clever’, using innovative technologies and materials. And finally, the way the assets are built must be as efficient as possible, using modern construction techniques that reduce cost and shorten delivery programmes. This potential is summarised in the carbon reduction hierarchy and asset managers can use this way of thinking to identify low carbon outcomes throughout their asset management programme.
Three key ingredients to a successful low carbon organisational culture emerged: low carbon technical solutions; collaborative business processes; and behavioural change that challenges existing ways of doing things. Low carbon technical solutions are required to change the types of infrastructure assets being developed. There is a need to challenge the way infrastructure assets operate to make them more efficient and new technologies and ways of thinking must be embraced. But low carbon technologies are not sufficient on their own. New business processes, such as delivery processes, governance, roles and responsibilities must be developed and implemented to facilitate innovative thinking and to make sure a project is sufficiently challenged by the right teams in terms of carbon and cost and that the best solutions are implemented on every asset, every time. Finally the people that are trusted to develop these new kinds of assets must be engaged early to be aware of the problems, are given the freedom to question the status quo and use their ingenuity to solve the challenges they face, either through internal or external collaboration mechanisms.
By integrating low carbon thinking into their businesses, asset owners around the world have reported success stories, and identified that lower carbon solutions are often lower cost solutions.
The benefits are tangible. As well as cutting carbon in their businesses, asset owners can save money while doing so, improving the bottom line. Infrastructure asset owners are an engine of change, having enormous influence over the emissions of entire countries. Their efforts to reduce those emissions bring commercial and reputation benefits and make employees and the supply chain feel more engaged.
With its investment pipeline, the GCC countries and the companies building new infrastructure have enormous potential influence on the future GHG emissions of the region.
GCC asset owner organisations have the opportunity to show real leadership to cut carbon and cost. With lots of new low-carbon policies being developed across the GCC, business must now respond to the challenge and embrace new ways of thinking that deliver lasting value. In this way the GCC has a great opportunity to be seen as an exemplar region delivering low carbon and low cost infrastructure.
We showed how a municipal asset manager in the GCC could reduce CO2 by almost one tonne per capita by changing the technologies it needs to expand its network – and save money doing so. It also enhanced the reputation of the asset manager with the regulatory bodies.
In the last five years a UK water utility has halved capital carbon and reduced operational carbon by 10%, while achieving a capital cost saving of 20%, measured against a 2010 baseline. Its focus on carbon has been so commercially beneficial that it is targeting a 70% capital carbon saving by 2030.
To support the asset planning of a GCC power utility, we developed a forecasting tool that predicted the GHG emissions of various combinations of power and desalination developments, helping them to meet their company commitments on sustainability.
In Australia, we helped identify innovative new approaches to construction of a set of highway structures, reducing carbon and cost by over 80%, and cutting construction time too.