Cost Efficiency – Lifecycle and Cost Analysis to the Rescue

Traditionally buying and building decision are taken with accounting mainly for purchasing costs. While the upfront paying for building a new house or buying a new car may seem the most relevant factor and intuitively comprehensible, it is only one – and actually quiet incomplete – part of the real costs over the lifetime of an item. According to the Rocky Mountain Institute (RMI) Applying “life cycle and cost analysis” (LCCA) is an efficient way to learn about the real costs of design and buying decisions and more and more engineers and customers are using it. Some interesting insights are already on the table. Taking into account all related costs, coal energy is actually two to three times as expensive as today.

On-green-policy. I sincerely doubt that the human brain is very good at thinking and correctly assessing long term benefits and costs and thus taking efficient decisions. Therefore policy should guide our limited ability in this regard. Just simply put the correct price tag on natural resources and their use will make customers look more carefully into lifecycle fuel efficiency of their cars, the insulation of their homes or the source of their electricity. Just like regulating some security and environment related issues in the building code, politics should require an inclusive LCCA for any newly built building. Then, I’m pretty optimistic that free market and common sense will make sure that the overall cheapest option prevails. And, what a change, this will actually be a good thing. Cheap will mean, good for the whole society and the environment. In other words, capitalism is fine, just have the state to let it think long term and to internalise all costs and it will find the most innovative, the most efficient and the most sustainable designs, corporations and items. And, these will most certainly not be super cheap, low quality products from outsourced manufacturing but good quality, locally produced, energy-efficient ones. It’s our choice!

Source: Greenbiz


Sorry, comments are closed for this post.