The case for Centres of Excellence in sustainable building design

Conclusion
The analysis shows that, based on the graduates from Centres of Excellence being
able to abate carbon dioxide emissions at even a marginally lower cost than
current practice achieves, establishing the centres will have a significant social
benefit. Quantification of other benefits, such as research, not evaluated here, is
likely to substantially increase the social benefits of the centres.
The key assumption underlying the proposal for Centres of Excellence is that
graduates from the centres will be able to achieve the carbon abatement
demanded from the industry at lower cost. This will be achieved through better
training in building engineering physics allowing the graduates to save energy
through passive design measures utilising the low-cost elements of construction
such as the building frame and fabric. The energy saving thus achieved reduces
the need for investment in microgeneration technology to mitigate energy
consumption. Thus the carbon abatement is achieved at lower investment cost.
This analysis has shown that a graduate from the Centre of Excellence only
needs to achieve abatement at a cost of £5.30 per tCO2 below the business as
usual approach to achieving net benefit to the UK economy despite the higher
costs of operating the Centres of Excellence. The marginal abatement costs of
the techniques that will be applied by graduates from Centres of Excellence are
typically valued at orders of magnitude greater saving than the breakeven figure
for this project.
Given the numbers of graduates that could be educated by just four Centres
of Excellence and the ongoing nature of carbon abatement this project has
potential to deliver very significant value for the UK economy over time scale
commensurate with our needs to reduce carbon emissions. The project has the
potential to generate a net present value in excess of £1 billion by 2030 and in
excess of £6 billion if it continues on the same basis to 2050.
The results presented in the model here are not highly sensitive to most values
used and so it can be taken as a reliable indication that the Centres of Excellence
will have a lasting and significant social benefit.
There are, however, some key aspects of the study that should be noted.
It must be remembered that this is not a full CBA of the project, nor is it a full
economic or financial analysis of all its aspects. Rather, it is a model to estimate
certain quantifiable benefits of engineers trained in building engineering
physics. Specifically, it is used to estimate the benefit to society of having carbon
abated at the lowest possible cost. The key assumptions lie in the framing of
the costs and, in particular, the benefits. We have assumed that the costs are
primarily the training costs, and the social costs of keeping building engineering
physics graduates in employment are not so significant. This assumption seems
reasonable, since it is likely that people who have chosen to study engineering
at a Centre of Excellence in Building Engineering Physics would tend to want to
work in such a field.
The benefits to society are harder to quantify precisely. Instead of modelling the
total carbon saved, we have assumed that the carbon abatement would take
place anyway but at a standard marginal cost under a business as usual scenario,
for example, non-specialists retrofitting houses or designing new buildings, or
indeed in CCS schemes for power plants. We have taken the MAC curve for the
UK published by McKinsey (2007) and have weighted the building sector results
to reflect what marginal impact trained building engineering physics graduates
would be expected to have.
66 The Royal Academy of Engineering