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L
Life Cycle Costing: Evaluate
Sustainability Outcomes
for Building and Construction
Sector
Oanh Thi-Kieu Ho
1
and Usha Iyer-Raniga
2,3
1
Research fellow, School of Property,
Construction and Project Management, RMIT
University, Melbourne, Australia
2
School of Property, Construction and Project
Management, RMIT University, Melbourne,
Australia
3
Sustainable Buildings and Construction
Programme, United Nations One Planet Network,
Paris, France
Synonyms
Costs-in-use;Life cycle cost (LCC);Through-life
costing (TC);Total life cycle costing (TLC);
Total-cost-of-ownership;Whole life cycle
(WLC);Whole-life-cycle costing (WLCC)
Definition
Life cycle cost (LCC) has been defined and
redefined in different studies undertaken on this
topic previously. However, life cycle cost in this
entry is considered as a sum of all costs related to a
life cycle of a building from the phase of invest-
ment to the phase of deconstruction. For a
sustainable building, it is anticipated that the envi-
ronmental impacts associated with the design,
construction, and operation of this building are
also lower than a business-as-usual building. Sus-
tainable buildings or green buildings are still not
mainstreamed in many parts of the world.
Introduction
The building and construction sector has a signif-
icant impact on the planet. The sector consumes
more than 40% of the world’s resources, requires
40% of global energy, emits 30% of GHG emis-
sions, and uses 25% of the global water supply
(UNEP 2016). Further, this sector contributes to
39% of energy-related CO2 emissions when
upstream power generations are included
(UN Environment and IEA 2017). The sector
continues to grow in different parts of the world,
particularly in the rapid city building regions of
Asia, Africa, and Latin America. To the year of
2060, in excess of half the buildings expected to
be built will be designed and constructed in the
next 20 years. This means that the impact to the
planet from this sector will continue in the near
future. To eliminate this impact, the building and
construction sector has made a deliberate move to
sustainability as proactive approaches and effi-
cient solutions are needed to protect the environ-
ment as well as to meet economic and societal
needs.
© Crown 2021
W. Leal Filho et al. (eds.), Industry, Innovation and Infrastructure, Encyclopedia of the UN Sustainable Development
Goals, https://doi.org/10.1007/978-3-319-71059-4_14-1
This entry commences with an understanding
of the Sustainable Development Goals placing in
the context of the building and construction sec-
tor. The primary focus is to reduce environmental
impacts and improve the economic outputs while
supporting social cohesion. Following this is an
understanding of LCC and its implementation in
this sector. An exploration of how LCC and its
variations are used to assess sustainability contri-
butions across environmental, economic, and
social considerations is provided before conclud-
ing this entry.
Sustainable Development Goals
The Sustainable Development Goals (SDGs)
came into effect on January 1, 2016, with
17 goals and 169 targets (UN 2020a). SDGs pro-
vide a clear direction to integrate and embrace
sustainability into every facet of human lives.
SDGs primarily address issues related to water,
energy, climate, oceans, biodiversity, urbaniza-
tion, transport, science, and technology. It sup-
ports and promotes peace and prosperity of
humans in the planet from present to future
human generations. Although the SDGs have
come into effect recently, there has been a history
to develop and implement the underlying intent
upon which they are based, supported by different
UN agencies and other international bodies since
1987 (UN 2020b). Currently, SDGs are tracked,
updated, and reported for ongoing monitoring by
High Level Political Forum (HLPF) on an annual
basis to the end of 2030.
Of all the SDGs, the goal of SDG 9 focuses on
industry, innovation, and infrastructure. The tar-
get of this SDG is to “build resilient infrastructure,
promote inclusive and sustainable industrializa-
tion and foster innovation”(UN 2020a). SDG
9 directly engages the building and construction
sector, especially form the perspective of
impacting energy, water, and land resulting
in environmental impacts. Other SDGs such as
SDG 11 also directly impact building and con-
struction as it is focused on making cities and
human settlements safe, sustainable, inclusive,
and resilient. Similarly, SDG 13 focuses on
climate change and its impacts. However, as this
entry is a part of the volume on SDG 9, direct
connections to this SDG relevant to life cycle
costing are considered.
Based on SDG9’s targets and indicators, it can
be said that the sector of building and construction
associated with the intent of this entry is directly
affected by target 9.4 and indicator 9.4.1.
Target 9.4 is:
By 2030, upgrade infrastructure and retrofit indus-
tries to make them sustainable, with increased
resource-use efficiency and greater adoption of
clean and environmentally sound technologies and
industrial processes, with all countries taking
action in accordance with their respective
capabilities.
Indicator 9.4.1 states:
CO2 emission per unit of value added. (UN 2020a)
Additionally, indirectly affecting the building
and construction sector is target 9.5 to encourage
innovation through scientific research expressed
through two indicators. The first indicator focuses
on proportion of GDP spent on research and
development, and the second indicator centers
on the numbers of researchers engaged in under-
taking scientific investigations. Likewise, target 9.
a calls for financial support for least developed
countries and small island developing states
(SIDS) manifested in its corresponding indicator
of international support provided for infrastruc-
ture in the mentioned country contexts.
To satisfy these and similar targets assisting the
building and construction industry to meet its
goals of sustainability outcomes, it is essential
for the sector to urgently implement sustainability
practices and to fast track and accelerate the adop-
tion of sustainability underpinnings. However,
sustainability practices and outcomes in the build-
ing and construction industry have had to satisfy
the trade-offs between costs and benefits, causing
a predicament to decision-makers. To provide a
transparent approach for assessing sustainability
contributions, LCC is one of the well-known
methods to address this issue. LCC and its varia-
tions have been developed and implemented to
capture and evaluate sustainability contributions
in such projects.
2 Life Cycle Costing: Evaluate Sustainability Outcomes for Building and Construction Sector
Life Cycle Cost
Life cycle cost (LCC) has been understood by
different names, including whole lifecycle cost
(WLC), through-life costing (TC), costs-in-use,
total life costing (TLC), total-cost-of-ownership,
and whole-life-cycle costing (WLCC) (Hunter
et al. 2005; Edwards et al. 2000). One of the
most used LCC definition is: “the present value
of total cost of that asset over its operational life.
This includes initial capital cost, finance costs,
operational costs, maintenance costs and the even-
tual disposal costs of the asset at the end of its life.
All future costs and benefits are reduced to present
day values by the use of discounting techniques”
(Addis and Talbot 2001) (p. 1). Based on varied
names and definitions, a primary principle of life
cycle cost is the consideration of costs and bene-
fits over the assessment period (BS ISO 15686-5
2008). The costs include land cost, income from
the building, and any externalities related to build-
ing activities. Although LCC and WLC have been
used interchangeably in previous studies for
assessing sustainability contributions to construc-
tion projects (Meng and Harshaw 2013; Zuo et al.
2017), LCC is used in this entry.
LCC’s approach is to focus on the cost related
to construction and operation of a building pro-
ject, defined as “a technique which enables com-
parative cost assessments to be made over a
specified period of time, taking into account all
relevant economic factors, both in terms of initial
costs and future operation costs”(BS ISO 15686-
52008). LCC is also defined as “a process to
determine the sum of all expenses associated
with a product or project, including acquisition,
installation, operation, maintenance, refurbish-
ment, discarding and disposal costs”(Standards
Australia/Standards New Zealand 1999).
With the aim of examining sustainability con-
struction during a project time, LCC is one of the
most effective tools for evaluating sustainability
contributions during a building and construction
project. The application of LCC is rapidly
increased with respect to sustainability consider-
ations in construction as it encourages life cycle
thinking with a long-term and systematic
consideration of development of a project. In
addition, it supports decision making for achiev-
ing sustainability outcomes (Kirkham 2005).
LCC supports a trade-off between long-term eco-
nomic, societal, and environmental performances
and the higher initial costs for sustainability fea-
tures and technologies in projects (Goh and Sun
2016).
LCC was first implemented in the procurement
of military equipment of US Department of
Defense, which integrated environmental costing
into decision-making management (Epstein and
Research 1996). This was followed by LCC use
in the construction industry with efforts directed
to consider future energy costs in project plans
and designs (Marshall 1987). Following its suc-
cessful use in the construction industry, LCC has
been used across different countries.
LCC may be aligned to the Sustainable Devel-
opment Goals (SDGs) as indicated earlier as it
presents an important framework on developing
global sustainability (Wulf et al. 2018). This has
also been shown particularly in relation to SDG
9, but also cuts across other SDGs when consid-
ering the building and construction sector. Indeed,
LCC needs to be aligned now more than ever to
the SDGs as the goals cut across environmental,
economic, and social dimensions. LCC may be
used as an efficient tool for achieving SDG 9 in
prevailing economic, environmental milieu and
developing technologies and innovation to meet
environmental objectives (UNEP 2016). It has
been applied across different projects for
assessing sustainability efficiencies of these pro-
jects. The various definitions of LCCs can be
summarized as shown in Fig. 1.
LCC Approach in Building Projects
for Sustainability Outcomes
Many studies have been carried out by using LCC
as a primary research method for assessing sus-
tainability contributions. A study of Marszal and
Heiselberg (2011) used LCC for the assessment of
energy efficiency in building projects. It consid-
ered LCC under four cost elements: investment
cost (IC), operation and maintenance cost
Life Cycle Costing: Evaluate Sustainability Outcomes for Building and Construction Sector 3
(O&MC), replacement cost (RC), and demolition
cost (DC) in Eq. 1.
LCC ¼IC þO&MC þRC þDC ð1Þ
The equation was used to assess nine case
studies that applied different energy efficiency
methods. The life cycle of these projects was
more than 30 years. This study demonstrated
that LCC was the best tool for assessments of
financial investment, cost efficiency, and cost
optimal systems to support selection of energy
efficiency methods.
Another study conducted by Worth et al.
(2007) used LCC for comparing four types of
roof constructions including steel sheeting, con-
crete tiles, softwood timber trusses, and light-
weight structural steel framing. LCC of each
roof construction was estimated by material
costs for embodied energy and CO2 emissions.
Based on this, LCC comprised of material instal-
lation costs and maintenance costs calculated by
input-output models, which has been developed
for building materials in New Zealand. By inte-
grating LCC and discounted rate of net present
values (NPV), the research found that concrete
tiled roof structures had lower LCC costs. How-
ever, steel sheeting had greater durability while
concrete tile cladding had lower embodied energy.
This study contributed to guiding the selection of
roofing materials to meet energy efficiency
requirements, as an inherent element of sustain-
ability outcomes in the building sector. The pros
and cons of each material were transparent that
assisted in decision making.
LCC is also used for determining cost optimal
solutions between alternatives of renewable
energy strategies. LCC has been integrated with
net savings and returns to consider all costs of a
construction project (Tabrizi and Sanguinetti
2015). The LCC model included investment cost
(I), replacement cost (Repl), residual value (Res),
and operating and maintenance cost (O&MC). Of
the cost elements, residual value was defined as
the remaining value at the end of a building life
cycle (see Eq. 2)
LCC ¼IþRepl Res þO&MC ð2Þ
The LCC model notably considered residual
value instead of deconstruction cost for assessing
value returns at the end of a building life cycle.
The residual value emphasized the value of sus-
tainability contributions to the end of a project
which is quite different with a traditional project.
Therefore, LCC may be considered as an innova-
tive approach to assist in decision making and risk
management within the construction industry
Whole life cycle
cost (WLCC)
Life cycle cost
(LCC)
Non-Construction
Costs
Income Externalities
Construction Maintenance Operation Occupancy End of life
Life Cycle Costing: Evaluate Sustainability Outcomes for Building and Construction Sector, Fig. 1 Definition
of LCC. (Source: BS ISO 15686-5 2008)
4 Life Cycle Costing: Evaluate Sustainability Outcomes for Building and Construction Sector
(Ellingham and Fawcett 2007). It can be applied
for comparison among different alternatives and
supports the right option. LCC interacts with
building projects, costs, and sustainability proper-
ties/characteristics in its assessment. LCC may be
individually estimated for every competing option
in a project. By using this method, operational
costs of sustainable options are normally lower
than with traditional options. The next section
now examines how life cycle costs may be used
to assess and understand sustainability
contributions.
Development of Life Cycle Cost to Assess
Sustainability Contributions
Sustainability has been defined and interpreted
many times over the last few decades. It has
been commonly defined based on the definition
of sustainability development by WCED (1987,
p. 43) as “... to ensure that it meets the needs of
the present without compromising the ability of
future generations to meet their own needs.”Sus-
tainability may be understood through the triple
bottom line (TBL) approach (Elkington 1997)
where it is the interpretation of the relationship
between economic prosperity, environmental
quality, and social justice. Sustainability out-
comes result through the process of innovating
new measures for minimizing environmental
issues, while supporting economic growth and
delivering on social outcomes. Usually, eco-
nomic, environmental, and social considerations
are compromised to support sustainability
outcomes.
From this perspective, LCC is developed for
assessing these TBL outputs and outcomes with
the inclusion of environment and society beyond
purely economic assessment.
Research has shown the t split analysis of eco-
nomic and environmental aspects during project
life cycle. Ristimäki et al. (2013) and Islam et al.
(2015) showed the importance of integration of
LCA and LCC for evaluating energy efficiency
and cost. According to Wang et al. (2010),
lifecycle assessment (LCA) was the best tool to
evaluate long-term environmental and economic
issues of a sustainable building, while lifecycle
cost (LCC) was the primary cost driver that con-
trolled the cost during a project.
LCA is defined as “the compilation and evalu-
ation of the inputs, outputs and potential environ-
mental impacts of a product system throughout its
life cycle”(ISO 14040 2006). In the study by
Wang et al. (2010), LCC was used for the assess-
ment of co st and LCA was used for the assessment
of carbon reduction and greenhouse gas emis-
sions. This integration aimed to improve the eval-
uation accuracy of cost savings and carbon
emission reductions. It showed the alignment of
economic and environmental interests through
support of LCC and LCA in sustainability
assessment.
Similarly, Kovacic et al. (2016) implemented
LCC and LCA for assessing three options of
façade systems including steel liner tray, steel
sandwich panels, and cross laminated timber
panels for achieving energy efficiency. In this
study, LCC was derived from investment costs,
following operational costs and demolition costs,
estimated by Eq. 3.
LCC ¼IþX
n
t¼0
Ut
1þiðÞ
t
þA
1þiðÞ
nð3Þ
Notes: I-Investment cost, U-Operational costs,
and A-Demolition cost.
While LCC has been the driver as indicated,
LCA was used for assessing environmental
impacts. The life cycle of LCA was drawn from
the production phase (material extraction, produc-
tion) to the end of its life, through deconstruction/
disposal of waste, recycling potential, and/or
deconstruction or disposal management. LCA
was evaluated by indicators of impact assessment
including Global Warming Potential (GWP),
Acidification Potential (AP), Primary Energy
nonrenewable potential (PEnr), and Primary
Energy renewable potential (PEr). Based on the
analysis of LCC and LCA, this study found that
construction cost was the major difference among
the options considered. For GWP, it noted that
cross laminated timber façade provided the best
Life Cycle Costing: Evaluate Sustainability Outcomes for Building and Construction Sector 5
performance although it had the highest initial
costs. This study concluded that LCC and LCA
were applicable tools for supporting decision-
making for design and investment stakeholders.
Along these lines, research by Tam et al.
(2017) applied LCC for guiding designers and
builders for selecting timber types in residential
projects to achieve sustainability outcomes as well
as timber credits in Green Star ratings in Australia.
The research considered six types of timber mate-
rials including radiata pine, red gum, blue gum,
hoop pine western red cedar, pacific jarrah, and
cypress pine. This study noted that LCC deter-
mined the capital cost of timber materials, its
common applications within a building, expected
service life, maintenance work required, and cost
of maintenance and demolition or removal. LCC
was calculated by
Present value ¼Future value=1þrðÞ
nfor considering the time value of money
This study highlighted that radiata pine was the
best timber application from the perspective of
cost efficiency. However, for structural applica-
tion, radiata pine was more expensive than hoop
pine. All these findings assisted in developing
guidelines for selecting the best timber applica-
tions for residential projects in Australia.
Life cycle assessment tools are used for sus-
tainable projects through the integration of other
aspects of sustainability (Onat et al. 2014). LCA
has also been extended to social assessment with
the model of life cycle sustainability assessment
(LCSA) (Kloepffer 2008; Guinée 2016). This
extension was the separation of TBL sustainabil-
ity: society, economics, and environment along a
project life cycle. The model of LCSA is
expressed as:
LCSA ¼LCA þLCC þSLCA ð4Þ
In this model, LCC and LCA represent effi-
cient tools for economic and environmental
assessments, while SLCA incorporates the assess-
ment of society. The most challengeable feature of
this model was the need of data for the SLCA
variable and quantitative methods of SLCA indi-
cators. In other words, SLCA in this model repre-
sents the theoretical assessment of society.
However, this model still provides an assessment
tool for every important pillar of the TBL, at least
in theory.
A study undertaken by Fortier et al. (2019)
used social life cycle assessment (SLCA) for
assessing positive and negative social impacts
through life cycle of a system or a product. This
study focused on energy justice towards low car-
bon energy sources for highlighting the impor-
tance of energy transitions in implanting energy
technologies. SLCA was undertaken by the
assessment across four key stakeholders: workers,
local communities, electricity consumers, and
society at large. This study demonstrated that
SLCA framework for assessing energy justice
was workable for evaluating new energy installa-
tions and potential substitutions of energy sys-
tems. SLCA in this study also needed to
emphasize life cycle management and corporate
social responsibility goals. The research found
that SLCA had a responsible role in informing
energy transition by categorizing, qualifying,
and quantifying justice considerations. It
supported the plan of developing energy efficient
projects as well as implementing low-carbon
energy sources, while also demonstrating new
technologies has a place in understanding energy
transitions.
Besides SLCA for social evaluation, there
were many other different tools to measure the
contribution of sustainability towards society.
These tools emphasize the considerations of
human health and well-being, including:
•Quality Adjusted Life Years (QALY) for
assessing human health and well-being under
sustainable conditions (Weidema 2006).
•Life Cycle Attribute Assessment (LCAA) for
considering human health through the sum-
mary of attributes (Norris 2006). LCAA
could be the socio-economic pathway to
health, reflecting life cycle environmental
impacts on health.
6 Life Cycle Costing: Evaluate Sustainability Outcomes for Building and Construction Sector
However, these two tools were often
implemented in the supply chain industry rather
than in the construction industry (Weidema 2006;
Norris 2006).
As a new approach to life cycle cost (LCC),
Sloan et al. (2014) examined the interrelationship
among the cost component in different stages of a
project. This new approach explored the
co-efficiency on the combination of the use of
binominal theorem and LCC. The binomial theo-
rem was used as an efficient tool to discover the
combination numbers of variables that should be
estimated in life cycle cost (Hoffman and Frankel
2001). The new approach was known as the Con-
tinuous Whole Life Cycle (CWLC) with a broad-
ened development of the standard WLC:
WLC ¼X
T
t¼0
Ci
t
1þdðÞ
tð5Þ
and a new generation whole-life costing (NWLC)
in train.
Based on these, the continuous whole-life
cycle can be presented as below:
CWLC ¼C0þðn¼25
t¼0
CktðÞdt ð6Þ
This approach explained that the relationship
between cost parameters caused the increase of
life cycle cost in a sustainable project compared
with a traditional project. This model expressed
the linkages among project stages from initial
design decisions to operational efficiency. There-
fore, the combination improved the accuracy of
estimating life cycle cost during the project
period. However, the challenge of this model is
obtaining realistic data for implementation.
From the lifecycle-based approach, various
models can be summarized as shown in Fig. 2:
To select a better design under given condi-
tions, Wang et al. (2005) integrated the life cycle
assessment with the multiobjective optimization
model. This model solved the problem of the
having to trade-off the relationship between eco-
nomic and environmental performances for gen-
erating cost-effective decisions. In this model, the
selected objectives were to minimize lifecycle
cost (LCC) and life cycle environmental impact
(LCEI) by using optimization models. These
models may be expressed as the following Eq. (7):
LCC xðÞ¼IC xðÞþOC xðÞ
and
LCEI xðÞ¼EE xðÞþOE xðÞ ð7Þ
In these, x is denoted as a variable vector, IC is
the initial cost, OC is the life cycle operating cost,
EE is the environmental impact due to the pre-
operational phase, and OE is the environmental
impact due to the operation phase.
Based on these models, a genetic algorithm
was implemented with multiple Pareto solutions
to resolve the trade-off relationships and find opti-
mal solutions. This method of multiobjective opti-
mization and modeling was suitable for the
objective optimization of environmental and eco-
nomic performances in a sustainable project. The
challenge of this method is the selection of param-
eters that are optimized to suit the assessment
scope.
Specifically regarding the energy assessment
Chau et al. (2015) illustrated that LCC assessment
has been developed to include life cycle assess-
ment (LCA), life cycle energy assessment
(LCEA), and life cycle carbon emissions assess-
ment (LCCO
2
A) for evaluating environmental
impacts and supporting decision making of build-
ing projects. Of these tools, LCA was used for
assessing all environmental impacts of inputs
and outputs of building materials during different
stages of these projects. It was calculated by using
the Eqs. 8and 9:
I¼IExtraction þIManufacture þIOn site þIOperation
þIDemolition þIRecycling þIDisposal
ð8Þ
Also, LCEA aimed to evaluate energy inputs
for different stages and was calculated by:
Life Cycle Costing: Evaluate Sustainability Outcomes for Building and Construction Sector 7
E¼EExtraction þEManufacture þEOn site þEOperation
þEDemolition þERecycling þEDisposal
ð9Þ
LCEA was able to use for either primary
energy (energy directly extracted from nature) or
secondary energy (energy was actually con-
sumed). Further, LCCO
2
A was developed for
assessing CO
2
emission outputs of these projects.
Similarly, LCCO
2
A was calculated from the fol-
lowing Eq. (10):
CO2¼CO2extraction þCO2manufacture þCO2on site
þCO2operation þCO2Demolition
þCO2Recycling þCO2Disposal
ð10Þ
Based on the extensive literature review, this
study showed that these three tools supported the
assessment of environmental impacts throughout
different stages of a project. Implemented in some
case studies, the research also noted that the larg-
est life cycle environmental impacts were from the
use phase of a building project and the impact
depended on the types and compositions of mate-
rials used. This study also mentioned that LCA
would be potentially enhanced in the construction
industry as this tool enabled the assessment of
both indoor and outdoor environmental impacts
for building projects. Further, this study
recommended LCA should be applied in the
early stages of a project for optimizing any design
options although it was very hard to be undertaken
during the early design stage of a project life
cycle.
Conclusion and Way Forward
For evaluating sustainability contributions of and
for building projects, LCC has been implemented
for assessing energy efficiency or determining
energy impacts in such projects. This is because
the primary focus of sustainability has tradition-
ally been in the category of energy efficiency.
LCC may be used to assess the economic under-
pinnings during a project life cycle. However,
LCC solely works with monetized contributable
elements, which becomes a restriction for the
smooth implementation in projects seeking sus-
tainability outcomes. LCC is unable to or has
limitations to assess intangible and nonmonetized
contributions of sustainability, such as productiv-
ity and health improvement. LCC has been
extended for evaluating environmental and social
contributions beyond traditional economics or fis-
cal perspectives. Life cycle assessment (LCA) is
used as a tool for evaluating environmental con-
tribution. However, it is worth noting that social
life cycle assessment (SLCA) has been developed
for social assessment. These tools, when inte-
grated to LCC, support to capture holistic contri-
butions of sustainability in building and
Life Cycle Methods
Life Cycle Cost
+Life Cycle
Assessment
Life Cycle Cost
+Life Cycle Assessment
+ Social Life Cycle
Assessment
Continuous whole life cycle (CWLC)
(Life Cycle Cost+ Binomial theorem)
Life Cycle
Cost
Life Cycle Costing: Evaluate Sustainability Outcomes for Building and Construction Sector, Fig. 2 Lifecycle-
based methods. (Source: Authors)
8 Life Cycle Costing: Evaluate Sustainability Outcomes for Building and Construction Sector
construction projects and satisfy TBL require-
ments for sustainability achievement.
LCC provides greater value-add with the inte-
gration of the Binomial theorem. This integration
focuses on the inter-links and inter-relationships
between the various cost parameters or elements.
For instance, initial cost and operational cost are
inter-linked in projects seeking sustainability out-
comes. The higher the initial cost is, the lower the
operational cost should result as presented in the
research by Sloan et al. (2014), as already stated.
The links between initial and operational costs can
be considered as the new approach of LCC with
the view of total costs in project life cycle.
The contributions of LCC to sustainability
assessment can be summarized below:
•Use for life cycle consideration during building
projects. As reviewed and presented in a wide
range of literature, LCC is technically included
as initial/capital costs, operational costs, main-
tenance costs, and demolition or removal costs.
With current thinking around circularity issues
or circular economy, the demolition needs to be
replaced with deconstruction. LCC applies
present value with the selection of life cycle
and discount rates for its calculations so the
fiscal alternatives provided are in real time.
•Implementation for a dynamic evaluation of
sustainability contributions on three different
pillars of economics, environment, and society
is also supported through understanding LCC.
LCC has been extended to other nontraditional
areas with support of LCA and SLCA for
assessing environmental and societal
contributions.
•Modifications or development of additional
functions for covering the considerations of a
life cycle approach for a project from different
perspectives of sustainability provides a more
holistic approach.
However, LCC has some limitations. The first
limitation is the scope among LCC, LCA, SLCA,
and other extensions. The scope needs to be
defined clearly for avoiding double counting of
one or more sustainability contributions, which
leads to inaccurate assessment as already flagged
by Sala et al. (2013). Indeed, some contributions
of sustainability (such as energy savings) can be
assessed by economic contributions and can also
be considered from an environmental perspective,
which is even more reason to ensure there is no
double counting. Therefore, a contribution should
be carefully considered for evaluation only once
in sustainability assessments and the scope should
be clearly defined.
Another limitation is the availability of cost
data. Often, data is too hard to be published or
made available because of the nature of the con-
struction business, which does not provide infor-
mation openly due to copyright issues and
competition as flagged by several authors such
as Meng and Harshaw (2013), Fawcett et al.
(2012), and Olubodun et al. (2010). Without the
data, LCC cannot be undertaken and hence,
unable to demonstrate relevant contributions to
project stakeholders as well as to convince devel-
opers and investors to develop projects with sus-
tainability outcomes.
Despite its limitations, LCC is an effective
approach for assessing sustainability outcomes.
From the perspective of the SDGs, SDGs of 9.4
and indicator 9.4.1 relevant to the building and
construction sector have impacted to this sector in
terms of resources, energy, and CO2 emissions.
Human well-being can be achieved with eco-
nomic growth as long as it is decoupled with
environmental impacts. Sustainability integrated
into this sector is essential and the role of LCC in
this sector is crucial. LCC needs to become main-
stream rather than remain in its current place at the
fringes of the broader sector. Supporting this pro-
cess is urgently needed now than ever before.
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