The case for Centres of Excellence in sustainable building design

Appendix 2
development in industry, even if not an increase in the numbers of Centres of
Excellence themselves. This will then make the adoption of sustainable design
across the construction industry an organically growing process.
In addition, by establishing Centres of Excellence, the state-of-the-art in building
carbon abatement will be pushed forward, with a greater number of specialist
researchers and a greater pool of students to enter the research arena. This will
help reduce the MAC and increase the abatement potential of building physics
techniques, potentially increasing the benefits to society beyond those outlined
in this analysis.
Not all of these benefits are quantifiable, and of those that are, some assumptions
will have to be made to make the estimations tractable. More details on the
specific assumptions made are given below.
The costs of such a project will have to be considered too. These are broadly in
two categories – the costs of training and the costs of employment. The training
costs are the costs of setting up and running the Centres of Excellence. The
employment costs are the opportunity costs of keeping a trained graduate in a
position where they can use their training and expertise to reduce carbon at the
lowest MAC, that is, in a building engineering physics-related post. In general, the
opportunity cost is the cost of the next best alternative, and here we can suggest
that the salary is a good proxy for the opportunity cost, as the individual can be
assumed to be in the job that offers the highest salary, and would work elsewhere
if the building physics engineer’s salary was lower than the next best alternative.
Given that the job market would offer a range of posts, we assume that the salary
itself is a suitable level.
Methodology and assumptions
The following method of estimation and its associated calculations are based
on estimating the marginal impact of the Centres of Excellence project, that is,
the net project benefits (project benefits minus project costs) incremental to a
business as usual (BAU) scenario. The business as usual scenario, in this context,
is to continue with the current UK policy objectives of achieving the majority of
carbon reductions through subsidies for high technology and in which there is no
enhancement of education in building science for passive energy conservation.
The marginal benefits and costs are therefore as summarised here and explained
in greater detail below:
Marginal training costs are the cost of setting up and maintaining the Centres
of Excellence. These costs are the extra over costs of providing the enhanced
engineering education in the centres. As all other costs to the university and
individual are the same in the project and BAU scenarios they do not need to be
accounted for in the analysis.
Marginal employment costs are the costs of employing a building engineering
physics- trained graduate compared with the cost of employing a ‘regular’
engineer in a building engineering physics role. We assume this to be a 10% salary
premium in the first year, reflecting the advantage such a graduate would have in
the job market, which decreases by two percentage points a year over five years
until the salary premium is zero. This decrease in the premium reflects the fact
that after five years in the industry, most engineers are likely to be a specialist of
some sort anyway and so able to gain similar average salaries.
The marginal benefit is the decreased MAC cost per unit of carbon saved. We
assume that the building engineering physics graduates can implement state-ofthe-art
practices which allow for carbon abatement at the lowest possible social
The case for Centres of Excellence in sustainable building design 51