State of the Nation 2020 - Infrastructure and the 2050 Net-Zero Target

Today ICE releases its annual State of the Nation report, which this year is looking at infrastructure and the net-zero emissions target. The Chair of the report’s Steering Group, Keith Howells, provides an overview of the key findings and recommendations.

This crisis presents wider opportunities to create a future that meets the needs of the planet
This crisis presents wider opportunities to create a future that meets the needs of the planet
  • Updated: 01 July, 2020
  • Author: Keith Howells, ICE Vice President

As we’ve navigated the murky waters of a global health pandemic in the past months, we’ve been forced to reassess priorities, how we do things, and what we hold important.

From reaffirming the importance of our national health service, and questioning unnecessary commuting, to rethinking how we interact with our communities and open spaces, and recognising the health benefits of a work-life balance.

Covid-19 has given us an opportunity to think about what we want our 'new normal' to look like, and not just on a personal level. This crisis presents wider opportunities for society – to create a future that meets the changing needs of us as people, and for the planet.

A year ago, the UK Government, and by extension business and industry, committed to achieving net-zero greenhouse gas emissions by 2050. This is a huge challenge, one that requires a fundamental rethink of every part of society. And, as we start to come out of the most critical time of the pandemic, we should be thinking about how to use this once-in-a-generation opportunity to recalibrate and reassess the economy and how we do things – not least, how we build, deliver and maintain the infrastructure we will need in the future.

It’s fitting then, that ICE’s annual flagship policy report, State of the Nation, focuses on the relationship between infrastructure and the net-zero target. I have had the privilege of chairing the Steering Group which oversaw the development of the report over the past six months, and believe the recommendations we set out can help build that path to change.

Ending the UK’s contribution to climate change under the net-zero target requires urgent and ambitious action across all sectors of the UK’s economy – none more so than for the UK’s infrastructure systems.

The vital infrastructure systems on which the UK relies currently contribute the majority of the UK’s emissions. Transport and energy alone, account for around 60% of the UK’s CO2 emissions. Given the urgency of the climate emergency and the long lead times and lifecycles of infrastructure, the challenge of transitioning these systems over the next 30 years will be immense. De-carbonising the electricity supply system is a precursor to transitioning transport and domestic use (heating, cooking, etc), which dominate current greenhouse gas contributions.

The State of the Nation report, Infrastructure and the 2050 Net-Zero Target, builds on the work of the Committee on Climate Change and recommends a series of high-level policy solutions to overcome the challenges for achieving net-zero emissions.

As civil engineers, we have the skills – and, the want – to make changes that benefit society now and in the future. We are already thinking about this, and there are digital and technological advances being made regularly that are moving us in that direction. But we need to do more, and do it faster. This report sets out a range of findings and recommendations to help us to that.

Strengthening policy-making

In legislating the 2050 target, Government provided a legally binding goal for the UK to reach net-zero emissions. While the UK now has an ambitious target, it does not have a clear plan for how it will be achieved.

Given the major contribution of infrastructure to emissions, a Net-Zero Infrastructure Plan for transitioning the UK’s economic infrastructure systems to a net-zero footing is needed. ICE believes this plan should form part of the National Infrastructure Strategy.

Developing the infrastructure

It is critical that infrastructure-related investment decisions align with net-zero. To this end, HMT’s Green Book should be reformed to better reflect the net-zero target in project appraisals and assessments. This should be part of the ongoing review of the Green Book in the context of the levelling up agenda.

The update of the Green Book should go hand in hand with action to elevate the value of emissions reduction impacts in procurement criteria so it is at the same level as value for money and health and safety outcomes.

Ensuring businesses respond

ICE believes infrastructure regulators need to place net-zero at the centre of their approach. Models of regulation need to be updated to promote the achievement of net-zero, and enable owners and managers of regulated assets to take longer term and more flexible strategic planning and investment decisions. This should help incentivise industry to look beyond the short-term and plan beyond current regulatory cycles.

The UK cannot build its way to net-zero - it must do more with its existing infrastructure assets. Longer-term decision making is needed to improve how risks, costs and benefits are accounted for in the context of net-zero. This will encourage more sustainable asset management, including greater reuse, up-cycling and retrofitting. One factor in helping this is to use procurement policy to require better collection, sharing and use of data on infrastructure assets to enable improved decision making concerning the net-zero target.

Ensuring a just transition

Net-zero offers a unique opportunity to strengthen regional economic performance and rebalance the UK’s economy. Many of the interventions needed (such as de-carbonising domestic energy use, building EV charging points, supporting active travel, developing renewable energy, etc) are local/regional in nature. Transforming infrastructure systems for net-zero could help to build skills, close the UK’s productivity gap, and drive the development of new markets, jobs and exports.

To achieve a just transition and level up the UK’s regions through net-zero, power and responsibilities for infrastructure policy and service delivery should continue to be devolved – with the overall aim of improving quality of life and sustainability.

Determining who pays

For the most part, the funding and financing mechanisms required to support infrastructure’s transition to net-zero already exist. The key will be adapting existing mechanisms, so they are tailored to net-zero outcomes. Contracts for Difference and the Regulatory Asset Base Model should continue to be used, where appropriate, to unlock the market for net-zero technologies identified by the Committee on Climate Change.

But what is soon to be lacking with the UK’s departure from the European Union is a financial institution to provide attractively priced finance in the event the UK loses access to the European Investment Bank. A new and differentiated UK Investment Bank should be established, with a sustainability mandate to invest in net-zero aligned infrastructure and crowd-in private finance, particularly in support of new technologies where conventional funding may be difficult to find.

Engaging the public to act

Public support for the changes needed to reach net-zero is critical. Technological change alone will not deliver the target, given that people will need to change their behaviour in terms of how they use infrastructure. The UK therefore needs a net-zero education and awareness raising campaign for infrastructure and the built environment.

Providing the skills

The UK needs to ensure it has the capabilities within the infrastructure sector to deliver the transition to net-zero. An Infrastructure Skills Plan should be delivered to identify current skills gaps, emerging skills requirements, barriers to upskilling and retraining, and education/training requirements, as well as ways to foster a more diverse and inclusive workforce.

What can ICE do to support built environment professionals?

Given the role engineers have in creating, operating and maintaining, refurbishing and repurposing infrastructure assets, ICE has a responsibility to lead its members and the engineering profession towards net-zero. To achieve this, our report identifies three workstreams where ICE can make an immediate impact and provide a focus for our activities before, during and after COP26.

  • Work Stream One: Measuring, sharing and benchmarking of carbon impacts
  • Work Stream Two: Capability building in low carbon design and delivery
  • Work Stream Three: Identifying systems-level reduction in in-use carbon

This is the start of a long-term programme of collaborative work which will seek to share knowledge and best practice on delivering low carbon solutions across the infrastructure sector.

Read more on State of the Nation 2020.

Read the report

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