Engineering and construction firm executives say the historic climate change pact reached on Dec. 12 in Paris could continue the power sector’s shift away from traditional fossil fuel projects and create new markets in developing countries.

The agreement reached by nearly 200 nations at the U.N. COP21 conference to reduce emissions and hold the globe’s temperature increase due to climate change to 1.5° C is tougher than observers had anticipated, or even hoped for. Scientists have said the global temperature must not increase more than 2° C in order for the worst effects of climate change to be avoided. Construction industry executives have watched the negotiations carefully, because, they say, they will have far-reaching ramifications—from energy-efficiency rules to the types of projects that are built.

“This agreement sends a powerful signal that the world is firmly committed to a low-carbon future, and that has the potential to unleash investment and innovation in clean energy at a scale we have never seen before,” said President Obama in a statement. He has pledged to cut carbon pollution and other U.S. greenhouse gases between 26% and 28% by 2025, compared with 2005 levels. China, the world’s largest polluter, committed to cap carbon emissions by 2030 through more investment in renewable energy sources and a cap-and-trade system by 2017. India pledged to reduce emitted carbon, as a share of economic output, by about one-third by 2030. “Solar and wind efficiencies are driven by economic imperatives and that is why they are likely to succeed,” says Himanshu Kakkar of the South Asian Network of Dams, Rivers and People.

Milestone Pact

Oliver Joy, spokesperson for the European Wind Energy Association says the agreement “shows a real commitment from all countries to decarbonize their energy systems and in many cases, deploy more wind power.” He adds that “Europe has a real opportunity to push forward on exports as a global leader in wind energy technology.”

Stefan Gsänger, secretary general of the World Wind Energy Association adds that the group has identified a global wind potential of more than 100 TW. “We have analyzed that by 2050, wind could provide 40% of the global power demand,” he notes.

Andy Byers, director of environment services for Black & Veatch’s energy business, terms the agreement a “milestone” that may create incentives for carbon capture and sequestration, more efficient coal-burning processes and more renewable energy projects. Funds established to help developing countries transition to less carbon-intensive approaches will require industry firms’ expertise, he adds.

At a London conference on resilience and future cities organized by U.S., U.K. and Canadian civil engineers’ groups to coincide with the climate change talks, a top U.S. engineer called for building codes to include limits on carbon dioxide released by the production of construction materials to reduce greenhouse-gas emissions. T

“Our codes should be based on more than high safety performance,” Mark Sarkisian, a partner at Skidmore, Owings & Merrill LLP, said at the event. Algorithms developed by SOM calculate whole-life carbon emissions of buildings based on size, location, materials and design life, among other factors, he said. SOM’s efforts to curb emissions include specifying used plastic bottles as void formers in concrete floor slabs at a 27-floor San Francisco high-rise, due to open next spring. The recycling plan was technically viable, but “they couldn’t get the materials fast enough,” said Sarkisian.

The Natural Resources Defense Council says goals to date are still not aggressive enough to hold temperature increases to 2° C, but notes that the pact calls for nations to assess progress every two years and reconvene every five to set even more aggressive goals. David Porter, former CEO of the U.K. Association of Electricity Producers, noted that while “we were moving in [that]direction anyway, we are now in a politically driven industry … and it’s up to politicians to protect customers with the most affordable way of handling the climate change issue.”

Naysayers?

In the U.S., Republicans in Congress have vowed to fight Obama’s emissions reduction centerpiece, the Clean Power Plan. It would require reductions in emissions at existing coal- and other fossil-fuel-burning plants. The GOP is unlikely to support fossil-fuel production cuts, and several lawsuits are pending to challenge the plan. “The Paris climate conference delivered ... lots of promises and lots of issues still left unresolved,” said Stephen Eule, vice president for climate and technology at the U.S. Chamber of Commerce. “None of the commitments made, including those by the U.S., are binding.” He says Congress still must appropriate any funds the administration has pledged.

But there appears to be growing business support to cut greenhouse gas emissions. On Dec. 3, 60 groups in 20 countries launched the Global Alliance for Buildings and Construction to speed up and expand the building sector’s potential to trim emissions. It includes the Royal Institution of Chartered Surveyors, World Green Building Council and International Union of Architects. Also, 21 nations, including the U.S., U.K., France, Canada, Brazil and Australia, agreed to double clean energy R&D investments that would attract private investors.

China’s unease over ambitious targets in the accord, however, was evident in President Xi Jinping’s remarks that the country “will take international obligations commensurate with its own national condition, development stage and actual capacity.” Despite rising pollution in Beijing and other cities, commitments made in Paris, if implemented, could impact needed economic rebound in China and execution of its ambitious Silk Road construction program, according to observers.

"Steel and cement units are producing less because of the economic slowdown but I don't expect the government to curb these industries as a whole," says industry analyst Thomas Gatley, a corporate analyst with consulting firm Gavekal Dragonomics. "There may be a few selective action like closing some extremely polluting units."

The push to export Chinese steelmaking capacity in Southeast Asia, West Asia and African countries using locally available iron ore may change dramatically if nations there join the worldwide effort to reduce carbon footprint and coal burning, sources said.

New Role for Engineers

Even so, Keith Clarke, vice chair of Future Cities Catapult Ltd., London, and former CEO of design firm WS Atkins plc, is bullish on the pact’s opportunities for construction industry innovation.

“Politicians have globally done their bit,” he says. “Now it’s time for engineers to do theirs.” He says the agreement is “the biggest opportunity we have seen for our industry,” but cautions that needed technological development will “require some competition in investments that not all firms will be able to do.”

Meeting demands with new projects is becoming increasingly unsustainable, believes Alan Perks, past president of the Canadian Society of Civil Engineers told London conference attendees. “We need greater awareness of non-structural solutions."