Six reasons to combine cost and carbon in construction

Before the industry can reduce carbon emissions it needs to be able to measure them effectively, using a consistent and verified methodology and data.

Many carbon calculators on the market purport to measure carbon emissions effectively, but the majority only bring operational carbon into the equation, while leaving out embodied carbon.

This is a substantial omission as it’s the latter that accounts for the upfront carbon emissions involved in sourcing and extracting materials, their transportation and manufacturing, as well as the construction and installation – collectively, this is known as the A1-A5 stages of a whole life carbon assessment (WLCA). Embodied carbon also accounts for 94-98% of Tier 1 contractors’ emissions, according to a report by Akerlof; another important reason to include them.

Historically, this issue has been heightened by the lack of a rich history of carbon data, in contrast to the decades of data the industry has to inform its decisions concerning cost.

The good news is that pan-industry initiatives are changing that.

The Built Environment Carbon Database has enabled the industry to capture data on a wide variety of components and materials. Currently, it holds more than 9,200 materials and this is continuing to grow and improve in quality, as we continue the verification process. And crucially, it’s provided the foundations for designing an efficient way to measure and report carbon, by linking it to measurement processes that already exist on construction projects – such as cost estimating, cost reporting and cost control.

While many of us within our industry are trained to reduce cost, here are six reasons why it’s now time to combine these skills with carbon.

It’s more efficient and saves time

For too long, the various sectors within our industry have become accustomed to working in silos, rather than evaluating the social, environmental and cost implications of industry projects together. In our poll of 300 construction professionals earlier this year, we asked who would typically be responsible for assessing the whole life carbon emissions on a project. 36% said a sustainability consultant, while 17% said a quantity surveyor and a further 17% said architects.

The increase in sustainability and environmental professionals in construction, coming under a myriad of net zero and carbon-related job titles, is an encouraging sign that firms are taking this seriously. But the tendency for costs to be calculated in isolation from the whole life carbon emissions being measured is clearly still a prevalent practice. 51% of respondents told us that, on recent projects they had been involved with, cost and carbon tended to be considered as separate issues. Just 12% said they had been considered together. Needless to say, this is an area where the industry needs to progress. Calculating and reporting on cost and carbon at the same time means the data collection exercise doesn’t need to be repeated, which makes the whole life carbon assessment (WLCA) process more efficient and time-saving.

Let’s make the best use of our existing cost experts

Reducing carbon emissions is a challenge that everybody in our industry has the power to get behind – it’s not just the remit of quantity surveyors, designers or engineers. And with the methodology and data in place, it’s now easier for us to compare cost and carbon as a collective. However, there’s also a clear argument for making the most of the cost experts we already have in the business. Quantity surveyors are best-placed to measure and benchmark carbon, as the underlying principles of cost estimating are very similar. Whether the team is at the early stage in the process and working with ranges, uncertainty factors or contingency allowances, or at a detailed design stage and have the exact specifications of particular components or materials to hand, the methodical approach required is the same. It would appear that a substantial number of our industry backs this stance too as 40% of our poll respondents stated that a quantity surveyor or cost consultant would be ‘best-placed to measure and/or assess whole life carbon emissions alongside costs on a project’.

It fits seamlessly into the value engineering process

Value engineering is a process that clearly identifies and prioritises the client and stakeholders’ requirements and delivering these with the most economical solution.    But the demands of these requirements are continuing to evolve, which means the skills within our industry also have to. A recent survey by the construction consultancy firm RLB found that 33% of contractors are being asked to provide whole life carbon assessments on schemes, a substantial increase from last year’s 14%.  This indicates that evaluating the embodied carbon impact of a project is becoming an increasingly important priority for clients,; and could become as integral to the value engineering process as cost.

The quantity surveyor may be asked to supply a life cycle cost budget for both cost and carbon against which alternative design solutions can be judged. For example, a client may want to compare the capital or embodied carbon cost of installing insulation material with the corresponding benefit, i.e. will the invested time, effort and cost achieve what’s required? Comparing cost and carbon, as part of a WLCA can also help to determine the amount of repair and maintenance (R&M) a particular component or asset may need, as well as how ecologically sustainable it is. As we continue to advocate, it’s always best to make decisions, based on carbon considerations, in the design phase of a project, or as early as possible – a 10-20% increase in costs can occur if carbon is considered in the later stages.

On the path to mandating

Until whole life embodied carbon reporting is mandated, it’s likely that cost will remain the main priority driving people’s decision making – not least as many businesses and contractors continue to see their profits squeezed, due to high borrowing costs.

However, excluding carbon from the equation could leave industry professionals trailing behind. It’s likely that more measures will be enshrined in legislation to ensure the government meet their net zero and decarbonisation targets.

Looming on the horizon is the Future Homes and Buildings Standards, which will apply to new homes and non-domestic buildings. This sets out technical proposals for changes to Part L of the building regulations, due to come into force in 2025. Although the proposals don’t apply to the upfront embodied carbon emissions generated from making the products and materials used to construct buildings, the government has stated it intends to consult on an approach to measuring and reducing embodied carbon in new buildings in ‘due course.’ This could eventually lead to the introduction of Part Z, which calls for the reporting and measuring of whole life embodied carbon.

The retrofit and refurbishment of existing buildings is already being driven by EPC ratings, which will continue to increase in importance.

Financial incentives

The finance sector continues to drive and influence change in the construction industry. Over the past few years, major investors have placed greater emphasis on investing in projects run by companies that set science-based targets (SBTs). Increasingly, they use frameworks created by the Institutional Investors Group for Climate Change (IIGCC) and The Carbon Trust . They also use guidelines and frameworks set out by The Carbon Risk Real Estate Monitor (CRREM); a project developed by the Sustainability Consortium. This was designed to help investors assess and manage risk in the real estate sector related to climate change. With the onus on reducing embodied carbon, CRREM’s aim is to rank the performance of a building against science-based targets. If it exceeds its allocated carbon value, it could potentially become stranded and start to lose value.

Combining cost and carbon could become increasingly important for contractors and developers to accurately predict the chances of their projects being financed or evaluate the risk of their existing portfolio.

In addition to this, occupier-led demand for buildings with green credentials is leading the way. Research undertaken by Property Week  shows that central London office buildings with a BREEAM ‘Outstanding’ rating have rents 23% higher than the average headline rent.  Similarly, buildings with an Energy Performance Certificate (EPC) ‘A’ rating have rents 17% above average headline figures.

We need to reduce carbon emissions in the built environment

The global construction market is predicted to grow 42% by 2030. Therefore, it’s essential that we work as a collective to factor carbon into our design choices, as well as cost. Evaluating cost, as well as carbon, means we can choose materials that are, ideally, lightweight, durable and low carbon intensive. Of course, the Environmental Product Declarations (EPDs) of materials are subject to change over time as they become less carbon intensive to produce. And there is no simple, clear-cut solution yet for what constitutes a perfect, sustainable building. For example, several architects have constructed buildings using timber, which have, quite rightly, been praised for their low-carbon credentials. But if the use of timber increases from around 4-5% of construction materials to 25%, this could have a major impact on forestry across Europe and the world. There may not be a definitive answer, yet, to resolving these challenges. But the ability to consider carbon, as well as cost, can be a catalyst for encouraging both developers and the supply chain to evolve their designs to achieve lower whole life carbon outcomes.

Conclusion

The BCIS Life Cycle Evaluator provides data that helps the industry compare cost and carbon more easily and efficiently. It’s now possible to arm anyone in the industry with the same pieces of information to make a difference and have an impact – whether that’s through upfront investment in energy efficient technologies or choosing more sustainable materials that could lead to lower operational expenditure and increased life cycle longevity.

This development could potentially produce game changing results for our industry, in terms of lowering carbon emissions and mitigating their impact in the construction industry.

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