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Sustainability and the built environment
Whole life cost analysis (WLCa)
WLCA is a method of assessing the total cost of a building over its predicted useful
life. Increased capital expenditure is offset against reduced running costs, which
promotes sustainable practice. WLCA differs from other cost assessment methods
in that it factors in not only the immediate costs, but also the costs that will be
incurred over the lifespan of the building. These include running costs (energy costs
in particular), maintenance and repair costs, and staff training costs. Sustainable
buildings currently carry a small cost premium, of between 1 and 10% depending on
the scheme; but when running costs and increased sale price or rent are factored in,
they often represent better value.
Take as an example specification of heating and cooling plant for a building. Often
in complex commercial systems the cheapest option is chosen up front, with no
consideration given to running costs. Increased initial capital expenditure on a more
efficient system could lead to cost savings over the life of both options.
The property market has been reluctant to implement WLCA to any great extent, partly
due to the fact that, historically, capital and running costs have been clearly separated
along the lines of capital and operational expenditure. Property development markets
often lack long-term continuity in the ownership of property; developers are therefore
rarely interested in running costs after the building is sold. Providing continuity of
ownership throughout the life of a building would go a long way to addressing this,
but would involve combining and co-ordinating legislation to enforce WLCA. Such
influence over the market is difficult to bring about. Also, traditional lease agreements
absolve the landlord of any running costs; although ‘green leases’ are beginning to
address this.
5.4 Kyoto Protocol
One significant attempt at combining legislation and creating a market which is
accountable for environmental damage is the Kyoto Protocol.
The Kyoto Protocol is a mandatory international ‘cap and trade’ scheme,
which was brought about through the UN Framework Convention on Climate
Change and which all signing countries agreed to implement. It represents
a move towards uniting the response to climate change globally, through
the ‘stabilisation of greenhouse gas concentrations in the atmosphere at a
level that would prevent dangerous anthropogenic [man-made] interference
with the climate system’. Yet, even though monitoring and reporting are the
only requirements to date, there has been great difficulty in reaching target
agreements.
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