Biden’s getting ready for the White House and one of his first moves was to put climate policy front and centre, committing to re-join the Paris agreement. Boris says he wants the UK to be ‘the Saudi Arabia of wind’ as we hasten to Net Zero. Rishi is talking Green Gilts. Alok is getting ready for COP26. Plus we’re due an Energy White Paper, a National Infrastructure Strategy and the Environment Bill finally getting through parliament and becoming law. It’s getting busy in policy right now and that’s before we even talk planning reform!
At the end of one of the liveliest weeks I can remember in a long time, I want to bring together my assessment of what this potentially means for all of us working across development, infrastructure and planning. I think it’s significant.
2020 was already re-shaping how we look at things. COVID-19 has forced us to re-consider and re-evaluate. Our accepted and ‘normal’ ways of life have been turned on their head. Wellbeing trumps everything and there is now acceptance that the interplay of environment and economy is central to this.
Now policy-makers are scrambling to stay out front and public pressure is accelerating change. Health, climate change and the environment are set to shape the political, economic and social landscape.
Here are five reasons why:
- We’re transitioning to a renewable energy future: the UK is on a journey to Net Zero by 2050 and everyone is waking up to what this means. It’s not simply about switching off fossil fuels and buying more electric cars. It’s about whole system change. It’s about how we generate, how we store, and how we consume and pay for energy. It’s starting to happen now but get ready for more substantial change at greater pace. The implications are massive for every part of the energy system, from generation to pricing and markets.
- We’ve just re-set our understanding, expectation of and aspiration for the environment we live in: the COVID-19 re-think has challenged how we see and use homes, offices, infrastructure and space, and how we relate to our home communities. Adaptability has shot to the top of the agenda. People want homes that blend domestic and ‘work’ space and give them a sense of belonging. Parks and neighbourhood public space now command an even greater premium. All assumptions on space and land use planning have been challenged. We need to get ready for new ways to achieve strategic planning and think differently about liveability, functionality and the integration of uses and needs. We need to plan to deliver not just physical and digital infrastructure but also societal infrastructure – because the mindset shift accelerated by COVID-19 is here to stay.
- We’re starting to understand carbon as a currency: carbon pricing and carbon markets aren’t new but they’ve hardly been the topic of conversation down the pub on a Friday night! I think we’re all getting carbon savvy now though and this will drive consumer-led change. Think about homes. From boilers to construction materials, we’re starting to factor carbon (and energy) into our thinking and decision-making more and more. Emerging policy is looking at embodied and lifecycle carbon. Picking just one example, retrofit is going to be a huge issue and opportunity on the path to Net Zero, with Kwasi Kwarteng promising guidance on decarbonising heat and reducing emissions from buildings later this year. As ‘suppliers’ of real estate and development services, we need to enable the market by offering choices and innovative solutions to improve viability and long-term return on investment.
- Perceptions of value are changing: financial value and balance sheet entries are no longer offering an adequate metric. People want to understand more about environmental economics, social value, natural capital and a raft of inter-linked assessments of ‘worth’ (for example using tools like Greenkeeper). Investors and pension funds are under pressure from consumers to show that they get it and that they are contributing to change. Following BlackRock’s Larry Fink and others warning of climate risk leading to stranded assets, ESG has gone mainstream in 2020 and I only expect more in 2021. Pointing to short-term financial return on investment is no longer adequate for funds and investors. People want to see purpose, a broader measure of positive impact, and a better way to judge the effective deployment of capital into development for longer-term, sustainable gains.
- The UK genuinely has an opportunity to be a global player in the green economy: the UK has always punched above its weight in international markets and we have an opportunity to do the same in the environment-led economy. From capital markets to creative designs for homes, places and spaces, we have always been innovative and progressive. My sense from talking to colleagues at Barton Willmore and across the industry is that there’s huge appetite to seize this moment and to combine economic and environmental success. There is a massive industry opportunity here.
At the end of a monumental week, from appointing a new leader of the free world to finding a vaccine which might just free the world of COVID-19, I’m feeling positive and confident.
I can see how environmental issues and economic issues are coming together as never before. I think we have turned a page and re-set the narrative on what’s important for our wellbeing, now and into the future.
So, back to the headline. When the Clinton campaign coined the phrase in 1992, it resonated. The economy was everything and uppermost to voters. Now, my suggestion would be that the environment is the economy and the economy is the environment. They are one and inseparable.
We are set for some very interesting times. I’m looking forward to making sense of the opportunities ahead and working with my talented colleagues and clients to make a positive difference.
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#letsfindaway, Net Zero, Health, Climate Change, Sustainable, Environment, Energy White Paper, Environment Bill, National Infrastructure Strategy