Let’s COP to it: What happened at COP28 for the built environment?
COP28 was held against a backdrop of what will almost certainly be the hottest year on record. While there has been a lot of chatter surrounding the hosting location and intent, COP remains a key lever in global cooperation and has seen some progress to date. We look at some of the key takeaways for the built environment.
10 minutes to read
Some COPs have been more notable than others – the Paris Agreement springs to mind. Even though COPs don’t gain this level of notoriety each year, they remain an important global gathering for government, corporate, academic and sustainability leaders, to maintain momentum on climate change. This year marks a moment for a global stocktake as agreed under the Paris Agreement signed in 2015, to understand where we are and where we need to be - there will be one every five years hereafter. Although there some questions remain surrounding how accountable governments are to the commitments made?
In the lead up to COP we saw many stark warnings of being wide of the mark. The Climate CEO Alliance stated global emissions need to fall 7% each year to 2030, although this was shortly followed by a UN Environment Programme (Unep) claiming the figure is 8.7% per year - either way they are currently rising by 1.5% a year. More has to be done and the built environment will have a pivotal role.
With less than 48 hours to go before COP ended, President Al Jaber called a majlis, which is an Arabian-style conference, where participants sit in a circle and are encouraged to speak freely. The results? There was a final agreement, even if it took a little longer than anticipated.
Importantly, this is the first-time oil and gas had been included in a COP agreement and with all the other elements, Bloomberg Green stated “Dubai may well be the most significant COP since the Paris Agreement in 2015”.
Broadly speaking, this year’s conference centred around a few key pillars, with a common thread of finance:
1. Fossil fuels phase out or phase down?
2. Tripling renewable energy
3. Operationalising the Loss and Damage fund agreed at COP27
4. The built environment – is a big piece of the puzzle.
5. Food and agriculture are on the table for the first time as key areas
Point 1: Fossil fuels phase out or phase down?
A key point of negotiation was the future of fossil fuels, even more poignant given the location in Dubai and the president Sultan Al Jaber, who is also the CEO of the United Arab Emirates' national oil company ADNOC. This agreement marked the first time oil and gas had been included which in itself is a huge stride.
The IEA published their World Energy Outlook in October in which they said: "A legacy of the global energy crisis may be to usher in the beginning of the end of the fossil fuel era: the momentum behind clean energy transitions is now sufficient for global demand of coal, oil and natural gas to all reach a high point before 2030 in the STEPS (Stated Transition Emissions Pathways)."
This point was a critical part of the debate and wording was key. Draft terminology included “an orderly and just phase out of fossil fuels" or "phase out unabated fossil fuels" or “consider reducing fossil fuel use”. The final text stated that nations, “in a nationally determined manner” should transition away from fossil fuels in energy systems “in a just, orderly and equitable manner, accelerating action in this critical decade, so as to achieve net zero by 2050 in keeping with the science”. In addition, there was text surrounding “substantially” reducing non-CO2 emissions, notably methane, from energy systems as a priority for this decade.
A softer wording than some may have hoped but progress nonetheless and calling for urgency. For property owners and operators, it is critical to think about power of buildings and how to ensure they are ready and aligned with the shift in energy source.
Point 2: Trebling renewable capacity
Global momentum in clean energy is soaring, with a 40% increase in investment since 2020, according to the IEA. Electric car sales have skyrocketed from one in 25 in 2020 to one in five in 2023. A whopping 500 GW of renewables capacity is expected to be added in 2023, breaking records. With over US$1 billion daily invested in solar deployment, the clean energy revolution is building pace. COP28 President Sultan Al Jaber was pushing, prior to COP starting, for countries to commit to a tripling of renewable power generation this decade.
The final text “called on” nations to “accelerate zero- and low-emission technologies, including, inter alia, renewables, nuclear, abatement and removal technologies such as carbon capture and utilisation and storage, particularly in hard-to-abate sectors, and low-carbon hydrogen production.” As well as that trebling of renewables target.
The property sector in all aspects will have a critical role to delivering and building renewable generation. We recently released a report looking at how in the UK we need to leverage grey not just green space, car parks and rooftops, to build renewable capacity. Not only are there opportunities for property owners to lower or provide stability to energy costs, but also benefit from potential new income streams and lower emissions and overall environmental impact. Recent announcements regarding the UK grid connection process should help to bring projects forward.
Point 3. Loss and Damage Fund
At COP27 there was agreement of a Loss and Damage Fund, which was designed to provide financial assistance to nations most vulnerable and impacted by the effects of climate change. After a year of almost deadlock, this year’s COP opened with a flurry of pledges. Starting with COP host, the UAE, pledging US$100 million to the fund, alongside an identical offering from Germany, US$50 million from the UK and US$10 million from Japan. The US also said it would provide US$17.5 million to the fund. So far, more than US$726 million of funding has been announced.
Prior to the conference we were treated to a rare bit of good news, that 'rich nations hit a climate goal' in providing US$100 billion of climate finance to poor countries, as promised in in the Paris Agreement, albeit they were two years late and the amount required will continue to grow.
Real estate will need to be resilient and adapt to climactic changes already experienced – not just focus on being net zero, especially in developing nations. Nasra Nanda - CEO of Kenya Green Building Council and Chair of the Africa Regional Network of World Green Building Council - highlighted this at a UKGBC panel event at COP28. Nanda noted as an industry we are ‘reactive not proactive’ and need to focus on adaption and resilience in buildings. Kenya has recently experienced devasting floods because of El Nino weather patterns.
Point 4. The built environment – is a big piece of the puzzle
With the built environment responsible for 40% of global emissions, it is clear there is an outsized role to play. On built environment day, December 6th, there was the official launch of the Buildings Breakthrough agenda, an initiative for international collaboration between national governments to accelerate climate action on buildings. At the launch it was announced that 27 countries covering a third of the global population and just over half of GDP signed up.
There will be the first ever Buildings and Climate Global Forum held on 7-8 March 2024 in Paris, France, to maintain momentum. The initiative aims to make ‘near-zero and resilient buildings’ the new normal by 2030. In the UK, current progress is falling short with the UKGBC estimating that carbon emissions from the built environment fell by 13% between 2018 and 2022, missing the 19% required to meet the UK’s net zero pathway. This shortfall represents 11 MtCO2e of carbon emissions, equivalent to the annual polluting output of 6.5 million cars.
With the European Performance of Buildings Directive (EPBD) getting a revamp, and mooted regulation around minimum energy efficiency in the UK – this initiative could see greater cooperation and provide impetus for clear and certain moves by government. Clarity is what is required for investors and owners to act. The updated EPBD, whilst a great step with clear goals will depend on individual country adoption. The directive included mandating nationally determined trajectories to reduce primary energy use, renovate the 16% worst-performing buildings by 2030 and the 26% worst-performing buildings by 2033 as well as national Building Renovation Plans to define a strategy to decarbonise the building stock and how to address remaining barriers, such as financing, training, and attracting more skilled workers.
One area which is likely to gather more attention for new and refurbished buildings is embodied carbon, as whole lifecycle approaches become more commonplace. Within the built environment there has been a growing number of examples and emphasis on more sustainable construction materials, such as wood. The UK Government has launched a new timber roadmap to, among other things, improve data on timber and whole life carbon, promote timber as a construction material, increase the supply of sustainable timber products, and address fire safety concerns to safely expand the use of engineered mass timber. This will be welcome as there has been reticence from the financial and insurance industries and a lack of knowledge and skills holding back the wider adoption of timber as a construction material.
Point 5. Food and agriculture are on the table for the first time as key areas
Agriculture, forestry and other land use and fisheries (AFOLU) and food production have oft been skirted in climate negotiations but for the first time they formed a key area with a dedicated Food, Agriculture and Water Day. Some 140 nations signed a declaration during the summit vowing to include food and agriculture in their climate plans, and more than 130 recognised the need to shift to sustainable healthy diets. More than US$7 billion in climate finance has been pledged for food and agriculture since the start of the COP28, according to the organisers.
Food production accounts for a third of greenhouse gas emissions, most notably methane, and is increasing affected by climate change ripples – be that droughts, floods, fires or temperature changes. The last three decades saw US$3.8 trillion of crops and livestock production lost due to disasters including floods and droughts, the United Nations’ Food and Agriculture Organization says. The need for resilience and adaption is critical and how we use land will become a sharper focus.
One area of deployment could be a push towards regenerative farming methods. My colleague, Andrew Shirley, wrote in his weekly update, about the Agribusiness Task Force, under the Sustainable Markets Initiative, publishing a first-of-its-kind framework to mobilise trillions of dollars in support of this push. Collaborating with major players like Mars, McCain Foods, McDonald's, PepsiCo, and Waitrose, the initiative aims to make regenerative farming financially viable and scalable. Focused on key regions such as India, the UK, and the US, the strategy addresses environmental challenges, with the current food system contributing 30% of human-produced greenhouse gas emissions.
The four-lever framework involves innovative funding models, standardised metrics, recommended policy changes, and plans to generate new revenue streams for farmers, including earning carbon credits. The Task Force asserts that regenerative farming is essential for the survival of global food supply chains and is actively implementing projects worldwide.
Looking ahead
A lot to digest and the proof, as they say, will be in the pudding. “An agreement is only as good as its implementation. We are what we do, not what we say,” Al Jaber said. “We must take the steps necessary to turn this agreement into tangible actions.”
We are undoubtedly behind on progress towards goals but global events and attention like COP serve to highlight and hopefully move this forward. For the property industry, clear targets and regulation is needed to help move the sector forward as well as education and understanding of materials and measurement. The Buildings and Climate Global Forum will hopefully look to move these agendas forward. And finally, after much back and forth, Baku in Azerbaijan (another petrostate so cue the debate) has been confirmed as the host for COP29.