Industry, Climate Change and Six New Europes

Keith Clarke, CBE, FREng, FICE, RIBA, Chairman, speaking on the topic, “Forum for the Future,” at the Bentley Year In Infrastructure 2019 thought leadership conference in Singapore in October, pointed out that recycling bins throughout the convention center have a sign above them stating, “the greatest threat to the planet is that we think somebody else will save it.”

“It’s no longer just about saving a bit more time, having more predictability, safety, equality in workforce, making projects acceptable to the taxpayer (you must do that anyway), or advancing technology – my phone gets quicker every time I buy a new one,” said Clarke. “Industry has to do that.”

Clarke cites these basic business models –

• Design consultants – cash lock 60 days plus margin 6-10% headcount and utilization
• Contractors – cash positive, margin 1%, risky, turnover driven
• Sub-contractors
• Cash negative, margin 10-20%, plant, expertise, turnover
• Manufacturers – Capital employed, IP trend to sell and maintain

Four market characteristics that overlap:

Housing, buildings, big projects, stuff in the streets

“Subcontractors have more expertise and may be investing in systems,” said Clarke. “Manufacturers are capital employees invested in factories and own intellectual properties, patents, cladding for buildings are about selling you systems, there is real gain in performance.” Technologies start to change this model.

“We are moving from a transitional to transformational business model, not because you’ve decided it but because circumstances force you to do it,” said Clarke. “Two things will change it – technology coming into our area, and climate change. Smart cities is about systems, and is actually transformational for city services. But they are systems and we are thinking of them as projects.”

We make money on big projects such as oil and gas, and “thick clients” such as major transit, that has a huge balanced sheet or government guarantee. They have longevity and have different characteristics of how they behave.

Good news:

• Population growth 9bn-11bn
• Urbanization – 70% urban
• Infrastructure – $30 trillion by 2030
• $30 x 1000,000,000,000
• Six new Europes

The “six new Europes” refers to how much infrastructure will be built in the next decades with about 3 billion people becoming middle class.  By limiting global warming, that population will have a kitchen, water, and sanitation, and other things that many people take for granted. Currently, 700 million people remain poor.

Sustainability

UN Sustainable Development Goals:

• Agreed
• Significant Progress

A Summary for Financial Decision-Makers of the IPCC Special Report on Global Warming of 1.5 º C on the impacts of global warming of 1.5 ºC above pre-industrial levels and related global gas emission pathways. In the context of strengthening the global response to the threat of climate change, develop sustainable development and efforts to eradicate poverty. — New York City, 22 September 2019:

Key messages from the report

• Already 1ºC of global warming
• At current rate, would reach 1.5ºC between 2030 and 2052
• Clear benefits to limiting warming to 1.5ºC
• We can still limit warming to 1.5ºC but this requires unprecedented changes
• Waiting for NDCs means missing 1.5ºC
• Limiting warming to 1.5 ºC would go hand in hand with achieving other societal goals

Global total net C0₂ emissions -45 C0₂ in 2030 – net zero CO₂ in 2050 Carbon dioxide removal

At 2 ºC warming all warm water corals are gone vs 1—30% left at 1.5 º C

At 2 ºC: in 10 years completely ice-free North Pole.

At 1.5 º C: in 100 years

“Adaptation is easy, it’s just bigger answers to usual questions,” said Clarke. “Adaptation without mitigation is immoral; it accelerates inequality. Mitigation = radically reducing CO₂E by 2050, trend to net zero by 2050; 1.5 º C by 2030.

Money

• Norwegian Wealth Fund
• ESG $34,000,000,000,000
• Task Force on Climate-related Financial Disclosure (TCFD)

1. 80% of top 1,100 companies
2. $120,000,000,000,000 funds under management

• Risk not ethics

Industry alone cannot achieve 1.5 º C but lack of urgent action guarantees failure.

The discussion on smart cities and making young people proud of being in industry, is about making cities serve people, and making society dance. This is about socializing, Clarke pointed out.

“Climate change sits above all this, and is a conditioner. Technology comes to your site, but does science come to your boardroom?” asked Clarke. “This report changes everything 2 º C – the diminishing adverse impacts of 2 º C are awful, we are still having droughts and extreme weather.  4 º C will be really awful. This is science and it is now. The difference between Paris and the report last October is timing. The disclosure agreements we signed up to internationally (with the except of Trump) (although some states did sign up) don’t get you to 1.5 ºC. The UK has a Climate Change Act that is a law. 2050 net zero carbon to run the global economy is written for politicians. If they can understand it, you can. There are no pathways to get there without all aspects of economy pitching in. We are building six Europes in this time frame. This also kills the poor. We use a lot of carbon: I fly here business class, dress nicely, and the kids are happy. There are three billion people who haven’t got sanitation, clean water, and don’t use carbon, and are having a tough time. Mass extinctions may result from 4 ºC, and you have killed the poor.”

At a Copenhagen climate meeting, African states took out a four-page advertisement sent up to the government meeting. “Don’t kill us,” the ad said, because that’s what climate change will do.

“In a meeting on 4 ºC a few weeks ago, a scientist from the Bahamas gave a talk,” said Clarke. “He said, ‘everyone keeps talking about future effects of climate change.  My people are dying now because of climate change.’ The exacerbation of extreme weather events now around the world is serious. Difference between 2 º and getting to 1.5 º is a real challenge, we lose corals, have no ice in the North Pole, the effects are huge.”

Adaptation

Perhaps most telling is that Clarke said that industries are good at adaptation. But by making society more resilient, we are compounding the problems of the poor. “If Bangladesh floods, they are going to go somewhere that isn’t flooding,” Clarke noted. “If we keep adapting, you get bigger answers to the same question. It is immoral. It accelerates inequality. Mitigation radically reduces CO₂ by 2050, but we can do it, and this is where we go from transitional to transformational.”

Cities and data are being used now to change function in cities, and should provide a people orientated approach. Technology should give people the opportunity to be themselves, said Clarke, allowing them to be unpredictable, be full of joy, not struggling to survive.

“Mitigation is where we are going.” Clarke summarized. “CO₂E is a prime factor in to design process. It changes the design process, and changes the fundamental business models we’re involved in. The challenge is it’s going to have to be achieved at a rate as in wartime.”

80% of big industries are talking about climate risks and are moving toward net zero building infrastructure. “Our industry will become transformational, or go bankrupt,” said Clarke. “We have the means.”

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Categories: 21st Conference of the Parties to the United Nations Framework Convention on Climate Change (COP21/CMP11, 2D, 3D, AEC training, AECCafe, apps, Bentley Year In Infrastructure 2019, BIM, building information modeling, buildingSMART, civil information modeling, Cloud, collaboration, construction, construction project management, field, field solutions, file sharing, geospatial, GIS, greenhouse gas emissions, IES, IFC, infrastructure, Internet of Things, IoT, mobile, point clouds, project management, simulation, sustainable design, terrain, traffic simulation, virtual reality, visualization, YII 2019

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