The case for Centres of Excellence in sustainable building design
The case for Centres of Excellence in sustainable building design
The case for Centres of Excellence in sustainable building design
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By 2050 the carbon abatement potential <strong>of</strong> the project is nearly 11 million tCO2<br />
per annum. This represents around 6% <strong>of</strong> the abatement required <strong>in</strong> the built<br />
environment to achieve an 80% reduction <strong>in</strong> l<strong>in</strong>e with UK targets. Thus, whilst<br />
this analysis <strong>in</strong>dicates that the potential <strong>of</strong> the project is significant, it <strong>in</strong> no way<br />
approaches the limit <strong>of</strong> carbon abatement available from the build<strong>in</strong>g sector.<br />
Net present value<br />
<strong>The</strong> net present value <strong>of</strong> the carbon abatement achieved by graduates from the<br />
<strong>Centres</strong> <strong>of</strong> <strong>Excellence</strong> is calculated by apply<strong>in</strong>g the £102/tCO2 MAC determ<strong>in</strong>ed<br />
above to the cumulative carbon dioxide sav<strong>in</strong>gs achieved and apply<strong>in</strong>g a<br />
discount rate <strong>of</strong> 3.5%. In order to evaluate the actual benefit <strong>of</strong> this project it is<br />
necessary to further account <strong>for</strong> the marg<strong>in</strong>al costs <strong>of</strong> tra<strong>in</strong><strong>in</strong>g and employ<strong>in</strong>g the<br />
graduates from the <strong>Centres</strong> <strong>of</strong> <strong>Excellence</strong> us<strong>in</strong>g the education marg<strong>in</strong>al cost and<br />
employment marg<strong>in</strong>al costs, also discounted at 3.5%.<br />
<strong>The</strong> overall net value <strong>of</strong> the project is given <strong>in</strong> table 7 <strong>for</strong> two scenarios: firstly, if<br />
the project were to end abruptly <strong>in</strong> 2030 the date <strong>for</strong> completion <strong>of</strong> low carbon<br />
domestic retr<strong>of</strong>its; and, secondly, if it were to end <strong>in</strong> 2050 the target date <strong>for</strong> the<br />
UK carbon reduction programme. In both these scenarios the marg<strong>in</strong>al costs <strong>of</strong><br />
education and employment are <strong>in</strong>cluded <strong>in</strong> full up to the f<strong>in</strong>al year. In reality if the<br />
project were to w<strong>in</strong>d down, tra<strong>in</strong><strong>in</strong>g costs would dim<strong>in</strong>ish towards the end <strong>of</strong> the<br />
period. This analysis also applies no value to the future carbon abatement beyond<br />
the analysis period achieved dur<strong>in</strong>g the project.<br />
Table 7: Net present value <strong>of</strong> project costs and benefits<br />
F<strong>in</strong>al year NPV runn<strong>in</strong>g cost NPV employment NPV MAC carbon Net value <strong>of</strong><br />
<strong>of</strong> project <strong>for</strong> centres cost premium emissions abated project <strong>in</strong><br />
2012<br />
2030 -£52,758,727 -£11,349,417 £1,231,259,384 £1,167,151,241<br />
2050 -£83,364,349 -£22,602,248 £6,838,381,569 £6,732,414,972<br />
62 <strong>The</strong> Royal Academy <strong>of</strong> Eng<strong>in</strong>eer<strong>in</strong>g