Construction, climate change mitigation and the right to be free from the adverse effects of climate change

Gagan Anand
Legacy Law Offices, New Delhi, Delhi
anand@legacylawoffices.com

‘We know we are not on track to limit global warming to 1.5 degrees Celsius. The window for meaningful change is closing, and the time to act is now.’^[1]

In December 2023, in their meeting at the 28th United Nations Conference of Parties (COP28), over 198 signatory countries to the Paris Agreement, 2015 (the ‘Agreement’), resolved to undertake a ‘global stocktake’ and discuss the need for an enhancement to climate financing to attain net-zero carbon emissions in the long term. This event was followed by the Supreme Court judgment on 21 March 2024 in the case of MK Ranjitsinh & Ors v Union of India & Ors,^[2] where the ‘right to be free from adverse effects of climate change’ was considered to be a fundamental right emanating from articles 14 and 21 of the Constitution of India. With such great advancements in the field of climate change and an unending need to enhance climate change mitigation efforts worldwide, it became necessary for developing countries like India to promote the adaptation of climate preservation measures in economy-enhancing sectors (EES) like construction. One of the essential reasons for such a dire need for adoption in EES was the need for unabridged continuity in the sectors, along with the current percentage occupied by them in causing climate change.

India’s ambitions under the Agreement and the associated complications

In 2015, India, being part of a group of countries, signed the momentous Agreement at the UN Climate Change Conference (COP21) in Paris, France, organised by the UN Framework Convention on Climate Change (UNFCCC). By way of this almighty Agreement, India resolved to direct a portion of its resources towards the attainment of two targets: (1) causing a substantial reduction in the nation’s carbon footprint; and (2) working towards ‘limiting the increase of the Earth’s temperature to not more than 1.5 degrees Celsius’.^[3]

Subsequently, at the 26th edition of the UN Conference of Parties (COP26), the country’s administration undertook an additional resolution to achieve net-zero carbon emissions by 2070 and further reduce the use of fossil fuels by at least 50 per cent before 2030.^[4]

While the aforementioned ambitions held considerable value in India’s continuing work towards climate adaptation, a major complexity associated with attaining such targets was raised by the country at COP28, which included a limitation with respect to the funds that would facilitate the adaptation of climate-friendly measures in the various sectors of the economy.

Under Article 9 of the Agreement, developed country parties (DCPs) have been directed to provide financial resources to assist developing country parties (DeCPs) in mitigation and adaptation.^[5] At COP28, India raised a valid, yet complex issue of needing climate financing amounting to trillions of dollars in order for it to be able to attain the goals set under the COP26 resolution.^[6]

While the desire for such substantial funds was critical, it gave rise to the issue of whether it was feasible for the DCPs to direct the amount towards India and its ambitions, while simultaneously meeting the needs of the other DeCPs, which, in turn, had also undergone the process of setting similar climate goals.

Another snag, which was due to be faced by the country in the years to come, was a projected increase in the population along with an enhanced rate of inflation, both of which were to further have the effect of increasing the fund requirements, thus posing another threat to the long-term goals of the country. In fact, as per India’s Long-Term Low-Carbon Development Strategy curated by the Ministry of Environment, Forest and Climate Change (MoEFCC) for the UNFCCC, with the projected increase in the population by 2050, urban India is expected to build 700–900 million square metres of residential and commercial spaces.^[7]

Needless to mention that the projected pace of construction may affect the green targets set by India and pose a threat to the climate mitigation targets set by the country.

Understanding the role of construction and infrastructure in climate change mitigation

‘Emissions of carbon dioxide worldwide, need to be seen holistically, as emissions from each nation ultimately disperse (sic) into the atmosphere.’^[8]

The aforementioned observation was made by the Supreme Court on 18 April 2024 in the case of The State of Telangana & Ors v Mohd Abdul Qasim (Dead) Per LRs,^[9] where the issues in question pertained to the protection of forests. In its detailed judgment, the court also took note of a harrowing report published by the Reserve Bank of India (RBI), the Indian central bank and banking sector regulator, specifying that: ‘Climate change manifested through rising temperature and changing patterns of monsoon rainfall in India could cost the economy 2.8 per cent of its GDP and depress the living standards of nearly half of its population by 2050’.^[10] The report further specified that: ‘A successful transition to a net-zero economy would require a strategy of “deep decarbonisation” encompassing all carbon emitting sectors, ranging from power generation and transportation to industrial production processes, construction activity, agriculture, and above all, nudging the citizens to change their lifestyle habits and consumption preferences’^[11] [emphasis author’s own].

A reasonable perusal of the aforementioned observations made within the report, with the projections laid down in the report submitted by the MoEFCC to the UNFCCC, may provide an inference into the tangent drawn between 2050 and the projected future in the case in which industries like construction fail to mitigate climate change. In light of this, while the relevance held by the other sectors, as specified in the aforementioned report, may be undeniable, additional importance may be assigned to the construction sector, which presently accounts for more than 39 per cent of energy-related carbon emissions in its present form.^[12]

By incorporating climate change mitigation and adaptation measures within the core of the construction sector, developing countries like India may continue to depend on the sector for their economies without the environment being at stake. However, it may also be manifest to acknowledge that, for such a desired future, the methods of adoption of such sustainable measures within the industry must be thoroughly planned and cautiously adopted.

The role of climate financing in sustainable construction

For developing countries like India, climate finance and the construction sector have a close-knit nexus, where the desired impact of the former is substantially dependent on the value adoption by the latter. By directing a considerable amount of such financing towards the infrastructure and construction industry, India may be able to undertake a range of measures, including the substitution of materials and methods for construction, thereby paving the way for the efficient realisation of its sustainability targets.

However, considering the complications posed by the traditional method promoted under the Agreement, vis-à-vis the funding requirements proposed by India from the DCPs, the nation may need to adopt alternative measures in order for it to be able to meet its climate financing needs and further facilitate risk mitigation in adopting sustainable construction methods. A few such alternative measures may include private participation through public–private partnership projects (PPP) and the issuance of green bonds, which will focus on the financing of environment-positive projects. Methods like these may provide India with the required ammunition for attaining cost efficiency while actively promoting climate mitigation and furthering an increase in the pace of sustainable adoption in the construction industry.

The added benefits of the methods, such as that of undertaking projects through PPP mode, may be a quid pro quo relationship in which the authorities will have the benefit of shifting responsibilities to private parties, while the latter may have the benefit of recovering their costs by operating projects for the agreed duration of time (build–operate–transfer). For India, particularly, given that the promoted focus of the government to undertake large-scale infrastructure projects in PPP mode is visible through the vast number of PPP projects it has undertaken,^[13] the inclusion of sustainable values may not require substantial changes to policies and practices. In fact, by including such values within the projects undertaken in the future, India may be able to attain the desired sustainability targets in the projected course of time. One such method of inclusion may be through certain amendments in the various PPP schemes of India, including the India Infrastructure Project Development Fund Scheme, which will ensure that a portion of funding provided to the project sponsoring authorities is conditional in terms of its utilisation towards sustainable methods of construction.

By incorporating the values of sustainability within the construction sector, through the promotion of PPP projects, the requirement for a substantial amount of funds may be reduced, to a certain degree, thus bringing about a balance in climate financing under the Agreement and the adaptation of sustainable measures in the Indian economy.

On the other hand, the issuance of sovereign green bonds, as undertaken by the Department of Economic Affairs and the RBI, may further the intentions of the country, not only to work towards climate change mitigation but also to make the Indian market lucrative for foreign participants. The latter has already been announced by the RBI in the announcement dated 8 April 2024.^[14]

The answer to the question

The year 2050 may seem far into the future, however, in terms of climate change, it is fast approaching. With continuing reports of the increase in temperature of the Indian Ocean, and the projected increase in droughts, floods and other natural disasters, it has become essential for nations all over the globe to undertake stringent measures to work towards climate mitigation in order to effectively realise the targets set under the Agreement.

For India, the world’s largest democracy and the most populated country, it is essential that these measures be fortified in all sectors, including that of construction and infrastructure, where such adoption will facilitate the expedited attainment of the country’s net-zero carbon emission goals and actually aid in the upholding of the people of the country’s ‘right to be free from adverse effects of climate change’.

Gagan Anand is Managing Partner at Legacy Law Offices in New Delhi. He can be contacted at anand@legacylawoffices.com.