The case for Centres of Excellence in sustainable building design

By 2050 the carbon abatement potential of the project is nearly 11 million tCO2
per annum. This represents around 6% of the abatement required in the built
environment to achieve an 80% reduction in line with UK targets. Thus, whilst
this analysis indicates that the potential of the project is significant, it in no way
approaches the limit of carbon abatement available from the building sector.
Net present value
The net present value of the carbon abatement achieved by graduates from the
Centres of Excellence is calculated by applying the £102/tCO2 MAC determined
above to the cumulative carbon dioxide savings achieved and applying a
discount rate of 3.5%. In order to evaluate the actual benefit of this project it is
necessary to further account for the marginal costs of training and employing the
graduates from the Centres of Excellence using the education marginal cost and
employment marginal costs, also discounted at 3.5%.
The overall net value of the project is given in table 7 for two scenarios: firstly, if
the project were to end abruptly in 2030 the date for completion of low carbon
domestic retrofits; and, secondly, if it were to end in 2050 the target date for the
UK carbon reduction programme. In both these scenarios the marginal costs of
education and employment are included in full up to the final year. In reality if the
project were to wind down, training costs would diminish towards the end of the
period. This analysis also applies no value to the future carbon abatement beyond
the analysis period achieved during the project.
Table 7: Net present value of project costs and benefits
Final year NPV running cost NPV employment NPV MAC carbon Net value of
of project for centres cost premium emissions abated project in
2012
2030 -£52,758,727 -£11,349,417 £1,231,259,384 £1,167,151,241
2050 -£83,364,349 -£22,602,248 £6,838,381,569 £6,732,414,972
62 The Royal Academy of Engineering