Balance

Up

The aim of a traditional building project is to complete the development as cheaply as possible. There are certain rules and standards which must be observed but to win a contract and then complete it profitably, the only other considerations are economic. This is not an unreasonable situation: we all have to eat and the market economy appears to be the least bad way of fulfilling this need. However, the situation is causing considerable problems for the wider environment; so much so that it is beginning to threaten our quality of life. It is time to sit up and take notice.

So where does the problem lie? If not with the construction process or the free market approach, then where? As with so many environmental matters, it lies in the yawning gap between economics and reality. Economics is a good system for controlling and understanding commerce and it has led to unprecedented prosperity throughout the world. However, to make the system more manageable, economists like to deal in internal and external costs. Internal costs are the every day running costs of a business, such as electricity bills, wages etc, all of which add to the cost of the product. An example of an external cost might be where a production process causes pollution of a river, leading to a loss of welfare for people downstream (maybe through a reduction in fish stocks). If these people are not compensated for their loss, then the cost is external to the production process. The company does not pay the cost, so it can make its products more cheaply. Another way of looking at this is that the company is selling a portion of environmental degradation free with every product.

One aim of Sustainability is closing this gap between economics and the real world or, as an economist would say, internalising externalities. If these costs are to be invoiced to the production company, we need to know how much to charge, which means putting a price on the environment. This is anathema to many environmentalists, as it can be seen as the first step toward trading in the environment, or selling the world for personal gain.

However, this is exactly what is happening already. As long as economists (and accountants, bankers, stockbrokers etc.) see environmental degradation as an external cost, they are selling the world for personal gain. We cannot be sure that they would not continue anyway if they were shown the true situation but we cannot expect them to act rationally if they are ignorant of this information. It is therefore necessary to learn the language of economics and to put the case for the environment in these terms. This is, after all, the language of politicians as well. The field of environmental accounting is still relatively young, although advances have been made in its effectiveness and reliability. It is not the purpose of this site to cover environmental accounting in any detail but further information on this subject is available from envaccounting@sustainableconstruction.co.uk.

A sustainable construction project must aim to redress the imbalance caused by economists having only half the information at their disposal. It should aim to balance the financial, environmental and operational aspects of every decision, every material and every system in the development. This is not easy to do: as well as the different languages of economics and environmentalism, there are still almost incomprehensible dialects within each discipline. How many tonnes of CO2 are equivalent to a tonne of waste? Or the quality of a river? Or the existence of a species? Should we tax work, which we want people to do, more than smoking, which we don’t? Or driving? Or saving? Or landfill?

Clearly, the subject is vast and complex. In fact, it touches everything we do in every walk of life. There is yet no system which can take account of these disparate themes and help us to take measured decisions. The best we can hope for at this stage of our own development is to do our best to reach the right decision, based on the information available and to be open and honest about the decision-making process, so that others can follow it (or avoid it). This is the approach we have chosen for sustainable construction. As ever, a simple example is invaluable in illustrating the point:

Buildings need insulation, particularly at high latitudes and elevations. In simple environmental terms, it would appear that the more insulation you can have, the better. More insulation means less energy use over the lifetime of the building, which means less resource depletion and less global warming. However, insulation costs money and we have a finite budget. Even if it is cost-effective to increase insulation levels, could this money be even more effectively spent on upgrading the windows, or the draft-proofing, or the energy systems? Also, (with some exceptions) insulation is not a structural material; we need thicker walls to contain thicker insulation. These walls cost more money, contain more materials and are more expensive to build. How do these factors feed into the equation? Then there is the type of insulation: what is the trade-off between the environmental impacts of production and operation, or disposal? Should you use phenolic foam for maximum insulation, or trade off some of the environmental impacts involved in its production and choose glass wool, or go further and select cellulose?

These decisions depend on the information available and the precise goals of the project. It is possible to calculate the optimum insulation type and thickness, given these parameters but there is no single correct decision. In the future, energy prices and sources will change, some materials will be found to be more hazardous than was previously thought and some production processes will improve. But a decision made today with today’s information and today’s values is the best anyone can ask for.