Environmental costs of buildings: monetary valuation of ecological indicators for the building industry

Abstract

Abstract Purpose Building life cycle assessment (LCA) draws on a number of indicators, including primary energy (PE) demand and global warming potential (GWP). A method of constructing a composite index of weighted individual indicators facilitates their use in comparisons and optimization of buildings, but a standard for weighting has not been established. This study investigates the use of monetary valuation of building LCA results as a way to weigh, aggregate, and compare results. Methods A set of six recent German office buildings served as a case study. For these, standard LCA and life cycle cost (LCC) calculations were conducted. Monetary valuation models from the literature were investigated as a basis for evaluation. From these, maximum and minimum valuation was chosen and applied to the LCA results for the embedded impacts of the case study buildings. The buildings’ environmental costs (EC) were thereafter calculated and contributions of single impacts are analyzed. The EC—based on external costs—are subsequently compared with the life cycle costs (LCC)—based on market prices—of the respective buildings. Results and discussion Of the five standard environmental indicators used in Germany, GWP contributes approximately 80 to 95% of the overall EC. Acidification potential (AP) is the second largest contributor with up to 18%. Eutrophication (EP), photochemical oxidization (POCP), and ozone depletion potential (ODP) contribute less than 2.0%, 1.05%, and 2.4E−6% respectively. An additional assessment of the contribution of resource depletion to EC shows an impact at least as large as the impact of GWP. The relation between the EC and LCC strongly depends on the EC model used: if EC are internalized, they add between 1 and 37% to the life cycle costs of the buildings. Varying construction materials for a case study building shows that materials with low GWP have the potential to lower environmental costs significantly without a trade-off in favor of other indicators. Conclusions Despite their sensitivity to the monetary valuation model used, EC provide an indication that GWP and resource depletion—followed by AP—are the most relevant of the environmental indicators currently considered for the construction industry. Monetary valuation of environmental impacts is a valuable tool for comparisons of different buildings and design options and provides an effective and valuable way of communicating LCA results to stakeholders.