Calculating the cost of carbon - where do we start?

Time is of the essence if the construction sector is to reach net zero carbon by 2050. Peter Dunn asks what will it cost to decarbonize buildings – and where do we start?

We, like every other sector, now to make some radical, root and branch changes to the way we operate forever. For those of us in the design and construction space, this means we will need to radically change our operations.

The good news is that many funders, investors, and clients in our sector have sustainability, and robust environmental, social, and governance measures at the top of their agenda when looking to acquire new building assets – a great starting point. With the corporate appetite ready for a move in the right direction.

Where to start

Perhaps by measuring what we do, and calculating the cost of carbon, so that we can begin to reduce its presence. To this end at AtkinsRéalis we’ve spent the last few years deep diving into understanding the detail of how we can turn seemingly intangible commitments into tangible, realistic objectives.

The single most common factor we’ve identified is that no two buildings behave in the same way when it comes to achieving the net zero perfections: it’s just not that simple. The approach requires a case-by-case basis and breakdown of the overall aspiration into bitesize chunks, starting with gaining an understanding of how design decisions are made, then looking at their associated cost, and how that translates to net zero carbon viability.

Case study – Manchester City Council

As part of this work, we’ve partnered with local authorities and property developers to focus on what the cost impact is likely to be in three key areas: new residential, new commercial, and existing assets. This work has included leading on a finance and viability exercise for the Manchester Climate Change Agency, which was established with other organizations by Manchester City Council in 2015 to champion climate change action in the city.

Our role was to assess the impact that the proposed roadmap to net zero carbon new buildings in Manchester would have on all new buildings in the city, with the direction that “all new development should be zero carbon from 2023 at the latest, when the new Manchester Local Plan is expected to become operational.”

The crucial element to this task, for us, was not just looking at the capital cost involved in delivering the roadmap, but more importantly, looking at the whole life cost of the building: its materials, its systems, its specification. This aligns back to the Manchester roadmap report, which defines ‘net zero carbon whole life’ as: “When the amount of carbon emissions associated with a building’s construction, operation, maintenance, repair and end of life is zero or negative.”

This is hugely important because, as a sector, we need to move away from any notion that new buildings being designed and built now will justifiably require retrofitting and further costly capital interventions later, because they weren’t fit for purpose when built. Doing this would not only be to the detriment of the asset value of the new building itself, but it’s also counterproductive in terms of the overarching aims of all of us are trying to reach; citizens, businesses, communities, councils – as we collectively work together towards net zero.

As part of this project with Manchester City Council, we were also able to work with other leading global design consultants to come up with some base case models for residential development and commercial office development. These findings have been very informative.

Residential differences

On the residential side, we found that interventions required to deliver a building to PassivHaus standard would cost an additional eight to ten per cent, although this varied according to factors such as materials and location. For commercial buildings, meeting the UK Green Building Council-defined ‘operationally net zero carbon’ standards, we calculated an additional five to six percent increase in the capital cost.

It’s a fact that a large part of the built environment is made up from existing assets; and this poses further questions about the large-scale retrofitting of legacy buildings that will be needed to bring them up to the same net zero carbon standards as new builds.

Carbon cost guide

This is a big challenge, but to help, we’ve developed a carbon cost guide that’s free and available now. Please get in touch for a copy to help assess the impact of key interventions that can help to make existing buildings more sustainable. The guide also includes an overview of current sustainability standards to consider for existing assets, such as NABERS UK for office buildings, WELL for healthy built spaces, and BREEAM for new builds.

We would encourage you to consult the guide, and if you’d like to discuss how our expertise could support you further, please get in touch.