Integrating life-cycle GHG emissions into a building’s economic evaluation

Buildings contribute to greenhouse gas (GHG) emissions throughout their life—from material extraction and production to building demolition and disposal. Current GHG emission reduction efforts largely focus on building operation, typically ignoring embodied emissions. One of the main barriers affecting the uptake of embodied GHG emissions considerations is the uncertainty related to the economic value of a building with reduced life-cycle GHG emissions. A conceptual approach is presented for integrating the life-cycle GHG emissions of a building into an economic evaluation. A case study detached residential dwelling located in Melbourne, Australia, is used to demonstrate the approach using a range of economic valuation approaches. One approach, using a carbon tax, shows that the effective cost for a single household would be over A$2000 for the first year, rising to almost A$5000 in 10 years. Across the range of evaluation approaches considered, the total cost to the householder is found to be between A$4600 and A$7860. With the embodied GHG emissions accounting for over 66% of the case study’s life-cycle GHG emissions, the majority of the economic liability for the householder relates to the initial construction and ongoing material replacement of the building. Policy relevance This research provides a comprehensive and integrated approach to GHG emissions and economic assessment of residential buildings. This could be used to drive better decisions in building construction and operation through policy improvement, generating greater understanding of the GHG emissions of buildings and the economic value of GHG emissions. By quantifying the total GHG emissions over a building’s life-cycle and examining ecological and financial implications, new data can provide the basis for policy measures that transform the value of GHG emissions in property. The total life-cycle approach to GHG emissions can be used by developers or builders, for example, to demonstrate the potential financial implications of their choices. However, given its current format, there is a need to improve policy measures such as improved carbon tax strategies and the generation of an annual tax for the economic value implications to be realised.