Climate Change, Carbon Emissions, And The Construction Industry

King & Spalding

After 25 years of negotiations, 196 parties adopted the “Paris Agreement” at the UN Climate Change Conference in December 2015. Since then, all (but one) signatories have ratified the treaty and committed to work towards the long-term temperature goal of holding “the increase in the global average temperature to well below 2°C above pre-industrial levels”. Central to achieving this goal are carbon emissions, and the Paris Agreement calls for net zero carbon emissions by mid-century. As Europe emerges from the second warmest winter in record, with the month of February 2023 ranking the fourth-warmest February in global climate record, the clock is ticking. Last month, the Intergovernmental Panel on Climate Change (IPCC) issued its final assessment report. The message was clear: Only swift and drastic action on all fronts will avert irrevocable damage.

One sector that is inarguably critical to achieving climate change targets is the construction industry. According to a 2021 report from the World Business Council for Sustainable Development,[1] the construction industry is responsible for 38% (14 gigatons) of all energy-related greenhouse gas emissions each year. Concrete alone is responsible for 50-85% of the embodied carbon in any construction project and 7% of all global carbon emissions. The efforts of the construction industry to address greenhouse gas emissions and offer lower carbon building materials are well underway and will be central to the shift to a lower carbon emission economy.

Laws and incentives to tackle climate change and reach carbon neutrality

Despite being the main global instrument to tackle climate change and reach carbon neutrality, the Paris Agreement merely provides a framework. The manner in which that framework is implemented and enforced is the responsibility of the member states.

In the United States, a signatory of the Paris Agreement, the Inflation Reduction Act of 2022 offers funding, programs, and incentives to accelerate the transition to a clean energy economy, including clean energy tax incentives and loan programs. For its part, the EU has set to achieve climate neutrality by 2050, as enshrined in the “EU Green Deal”. To reach this goal, it relies on different strategies, such as the use of Carbon Capture and Storage (CSS), as well as Carbon Capture and Utilization (CCU).

Many signatories offer governmental incentives to companies adopting and implementing mitigation strategies against climate change. The common trend is a gradual increase in taxes on CO2 emissions to incentivize greener alternatives. For example, taxpayers in the U.S. may benefit from a tax credit of up to $50 per captured or stored metric ton of CO2. In the EU, the “Innovation Fund” will invest €38 billion in innovative low-carbon technologies – such as CSS and CCU, as well as the construction of the necessary facilities – between 2020 and 2030.

The efforts and actions of the construction industry

Today, there are a number of steps that the construction industry can take to reduce carbon emissions and support the fight against climate change, while benefitting from governmental incentives. A number of construction companies have launched pilot projects aimed at reducing CO2 emissions released into the atmosphere. For example, cement-manufacturing company Lafarge Canada has partnered with Inventys and Total to launch “the world’s first full-cycle solution to capture and reuse CO2 from a cement plant.” The three-phase CO2MENT project uses carbon capture technology to trap the CO2 – produced during the cement production – and to then clean and filter it. Some of the captured CO2 will be re-used on site, for example, in water treatment and fire suppression. However, the goal is to be able to re-invest it into building materials.

Technologies to capture carbon dioxide are remarkable – yet, they remain costly and generally untested at scale.

While this technology evolves and becomes more widely available, the construction industry is taking steps to reduce the carbon footprint generated by its activities and in particular the use of concrete, whose demand remains high and is expected to increase in the coming years. The production of concrete’s key component, cement, requires considerable heat and causes a chemical reaction that releases carbon stored in limestone. This multi-step process offers several avenues to reduce carbon emissions. One way is through the use of low-carbon fuels (e.g. renewable gas), waste fuels (e.g. non-recyclable plastics or tires) or even carbon-neutral fuels. Another way is to change the materials to less carbon-intensive alternatives, such as uncalcified limestone, which can reduce CO2 emissions by 10%. It is also possible to substitute a part of the cement in concrete with fly ash, a waste product of coal combustion, that reduces the amount of carbon emissions proportionally to the percentage of fly ash used in cement.

In the wider construction industry, a reduction of carbon emissions can be achieved with other measures, including by using materials with a lower carbon footprint, such as recycled concrete or recycled steel. Sourcing materials locally or within a shorter perimeter from the construction site or opting for means of transportation with a lower carbon footprint can also contribute to reduce the carbon emissions attributable to a project.

Working towards net-zero in the construction industry

The construction industry plays a major role in the economy, and it can contribute substantially to the global effort against global warming. A building’s carbon footprint implies measuring (and aiming at reducing) the operational energy use and carbon associated with it, as well as the embodied carbon associated with its construction, refurbishment, and end of life. Mindful that the future will bring many new technologies and development can be very quick, here are some recommendations to progress towards net-zero:

  1. Carry out a whole life carbon assessments on new and existing projects.
  2. On new projects, assess all lower carbon options for construction material.
  3. Commit to clear global targets including a strong approach to offsetting residual emissions.
  4. Adopt a clear definition of net-zero building (considering the whole life-cycle carbon of a building).

Adopt a collaborative approach including open-source sharing of the data obtained to help the industry progress.

[1] Net-zero buildings: Where do we stand?, World Business Council for Sustainable Development (WBCSD), July 8, 2021, available at: Net-zero buildings: Where do we stand? - World Business Council for Sustainable Development (WBCSD).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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