Putting carbon before capex brings economic dividends

Putting carbon before capex will bring economic as well as green dividends, experts agreed at Real Asset Media’s Building Net Zero: Life Cycle Project Delivery for the Public Sector briefing, which took place online recently on the REALX.Global platform.

“It is very important that these strategies are brought in from the start,” said Peter Barker, head of design management, McLaughlin & Harvey Construction. “The later you set your carbon strategy the more difficult it will be to achieve your targets.”

Having a clear sustainability strategy from the beginning is far preferable to having to adapt once the project is underway.  

“Investing more time up front brings savings in delivery,” said Chris Clarke, performance and improvement director, SCAPE. “It’s a hidden saving that is not being talked about yet. Thinking early is a more collaborative process that leads to better solutions and substantial time savings.”

For new-builds, incorporating a carbon reduction strategy at an initial stage brings huge benefits.

“There’s a 70% carbon reduction potential in a project if you take it into account from the beginning, as opposed to a 45% reduction if you turn to it after the design stage,” said Clarke. “It means giving away a huge carbon reduction opportunity as well as missing out on huge economies of scale.”

Morgan Sindall did a project rethinking the procurement process but putting carbon before capex to see what the outcome would be. The experiment produced interesting results.

“We found that a 67% reduction in life-time carbon was achieved, a substantial reduction in energy consumption and embodied carbon, but a very marginal cost increase of 4.7%,” said Elizabeth Halliday, head of responsible business, Morgan Sindall. “The capex payback was seven years and over the long term there were substantial savings, which shows that it does pay to put carbon before capex.”

Current conditions are not ideal for the transition. As inflation bites and costs rise, it will be more difficult to make the right choice.

“The biggest challenge is finding the operational budget to decarbonise,” said Barker. “But it’s a challenge that must be overcome.”

Innovative green solutions tend to cost more in the short term but tend to save money over the medium term.

“We’re constantly working with our design teams to find more cost-effective solutions that result in savings,” said Halliday. “From energy consumption to water use, there are many solutions that are good for the environment and result in cost savings. It’s all about balance. In the end what is good for people is good for the environment.”