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Economic impact assessment of carbon pricing of embodied greenhouse gas emissions for commercial office construction

A life cycle study was undertaken to assess the economic impact arising from internalised embodied greenhouse gas emissions (GGE) costs for a commercial office building. A limited range of design and materials re-cycling strategies were investigated for their abatement potential. GGE quantities were determined by a hybrid process analysis where input-output data was supplemented with national average data to increase completeness whereby all upstream emissions arising from material inputs to the point of extraction, as well as non-material inputs (e.g. goods and services) into the design and construction process are accounted for. The hypothesis proposed abatement potential of 30%, as measured against the Benchmark Design (BM) would be economically viable in absence of the benefit of early-action credits. The hypothesis was disproved with 15% abatement shown at zero additional capital cost. A Stretch Technology (ST) scenario was investigated which showed 32% abatement potential however the associated marginal capital cost could not be determined. The GGE intensity per meter square of Net Lettable Area (m2 NLA) for the case study building was found to be 5,258 kg CO2-e. The theoretical value of abatement credits was determined at $12 to $1,031 / m2 NLA (depending on price) and is shown to present a reasonable economic and market transformation opportunity at medium range values. The results demonstrate that the cost-push inflation risk posed to commercial office construction is large where the price of embodied GGE is internalised in the economic system. Gross Construction Cost (GCC) increase per square meter is shown to be between 1.5% and 61% (with associated negative IRR impacts between -0.1 to -7%) depending on the GGE price level. An unsustainable cost impact is demonstrated at GGE prices greater than AUD$50 per tonne of carbon dioxide equivalent (AUD$50/ tonne CO2-e). Internalised GGE studies have been largely limited to the operational cost impact arising from GGE of direct end-use rather than from the perspective of total embodied final demand. The results demonstrate the critical nature of embodied abatement strategies for commercial buildings if the internationally accepted 60% global GGE abatement is to be achieved within the relevant timeframe. An average kg CO2-e intensity per dollar of GCC is proposed for the three building models that may be applied to general scenario planning. The scale of economic benefit available for embodied credits is significant and the determination of viable credit mechanisms worthy of further research.

Identiferoai:union.ndltd.org:ADTP/242296
Date January 2005
CreatorsNoller, Caroline J, Built Environment, Faculty of Built Environment, UNSW
PublisherAwarded by:University of New South Wales. School of Built Environment
Source SetsAustraliasian Digital Theses Program
LanguageEnglish
Detected LanguageEnglish
RightsCopyright Caroline J Noller, http://unsworks.unsw.edu.au/copyright

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