Carbon counting - should we be penalised for every tonne we build?

The construction industry stands at a crossroads, as it deals with its substantial carbon footprint while striving to meet the demands of urbanisation and infrastructure development. Concrete megastructures, emblematic of modern progress, are particularly scrutinised for their environmental impact. This has sparked a critical debate - should carbon taxes or quotas be imposed on high-carbon projects to mitigate climate change, writes John Ridgeway?

Concrete production in particular, is a significant contributor to global carbon emissions, accounting for approximately 8% of the total. The chemical process of producing cement, a primary component of concrete, involves heating limestone and clay to high temperatures, releasing substantial CO₂. Imposing carbon taxes or quotas could incentivise the industry to adopt cleaner technologies and materials, thereby reducing its environmental impact.

Financial penalties on carbon-intensive projects could stimulate innovation within the construction sector. Companies may invest more in research and development of sustainable materials and construction methods to avoid additional costs.

Implementing carbon taxes aligns with international efforts to combat climate change. The Paris Agreement underscores the necessity of reducing greenhouse gas emissions and financial mechanisms like carbon pricing are recognised tools to achieve these targets. By adopting such measures, the construction industry would contribute meaningfully to global sustainability objectives.

However, critics argue that imposing carbon taxes could place a significant financial strain on construction companies, particularly small and medium-sized enterprises (SMEs). The additional costs might lead to increased project expenses, potentially slowing down development and affecting economic growth. Balancing environmental responsibility with economic viability remains a complex challenge.

In addition, higher construction costs due to carbon penalties could be passed on to consumers, leading to increased housing prices. This is particularly concerning in regions already experiencing housing affordability issues. Policymakers would need to consider mechanisms to mitigate such socio-economic impacts.

Global competitiveness concerns

In a globalised market, unilateral implementation of carbon taxes could disadvantage domestic companies compared to international competitors operating in regions without such regulations. This could lead to 'carbon leakage,' where companies relocate operations to countries with laxer environmental policies, undermining global emission reduction efforts.

That said, China's recent decision to expand its carbon trading market to include the steel, cement and aluminium industries exemplifies a large-scale approach to integrating carbon costs into heavy industry operations. Approximately 1,500 additional firms are now required to purchase credits to cover their emissions, aiming to encourage the adoption of low-carbon technologies. This initiative reflects a growing global trend towards holding industries accountable for their carbon footprints.

It shows what can happen when governments leverage their purchasing power to promote low-carbon materials. For example, the Low Embodied Carbon Concrete Leadership Act (LECCLA) in New York State establishes global warming potential reduction thresholds for concrete used in state projects, incentivising the use of sustainable materials without imposing direct taxes.

Allocating funds towards the development of sustainable construction materials and methods can also yield long-term environmental benefits. Innovations such as carbon capture and storage (CCS) in cement production or the use of alternative materials like cross-laminated timber offer promising avenues for reducing emissions.

Collaborative efforts within the industry can also drive change. The ConcreteZero pledge, for instance, sees major contractors committing to using 30% low-emission concrete by 2025 and 50% by 2030, demonstrating a proactive approach to sustainability.

ConcreteZero is a global initiative launched by Climate Group, in partnership with WorldGBC (World Green Building Council) and other climate-focused organisations. Its goal is to create a demand-side movement to accelerate the shift to net zero concrete.

It does so by bringing together large-scale concrete purchasers - such as major construction contractors, developers, and infrastructure clients - who commit to specific, measurable targets for reducing the embodied carbon in the concrete they procure.

The core commitments

Organisations that sign up to the ConcreteZero pledge commit to the following milestones to ensure that 30% of all concrete used must be low-emission by 2025, 50% must be low-emission by 2030 and 100% must be net-zero concrete by 2050

These targets are based on a definition of "low-emission" and "net-zero" concrete that’s grounded in lifecycle carbon assessments - including emissions from material extraction, manufacturing, transport, and use.

The power behind ConcreteZero lies in demand-side pressure. When big clients require low-emission concrete as a standard in tenders and contracts, manufacturers are forced to invest in cleaner production processes. This will include innovations such as low-clinker cements, carbon capture and storage (CCS), recycled aggregates, alternative binders (e.g., slag, fly ash) and more efficient batching, curing and delivery methods.

The movement is also about transparency where signatories must report annually on their progress and the actual carbon content of the concrete they use.

ConcreteZero is just one piece of the puzzle, but it’s a powerful one. It proves that market demand can drive change faster than regulation alone and that the industry is willing to lead - not just follow - when it comes to decarbonisation.

The proposition of penalising high-carbon construction projects through taxes or quotas embodies the urgent need to address the environmental impact of the construction industry. While such measures could drive significant reductions in carbon emissions and foster innovation, they also present economic and competitive challenges that cannot be overlooked. A balanced approach, integrating financial incentives, supportive policies and industry collaboration, may offer a more effective path forward. As the global community intensifies its focus on sustainability, the construction industry must navigate these complexities to build a greener future.