The Time-Value of Carbon: An Introductory Exploration
Introduction
Climate change, recognized as humanity's most pressing challenge, requires urgent action to mitigate its impacts. This involves reducing the accumulation of greenhouse gases, particularly by storing more carbon in various forms like fossil reserves, soil, living organisms, and specific materials. The focus on transitioning away from fossil fuels, which are the primary source of emissions, necessitates careful decision-making across social, economic, and natural systems. Each choice now includes considerations of climate change, and our ability to measure and assess its impacts enhances the sophistication of these decisions.
Context
The built environment is pivotal in addressing climate change, accounting for 21% of global greenhouse gas emissions. With increasing policy, regulation, and financial incentives, the sector is undergoing transformation towards net-zero targets. Whole Life Carbon Assessments (WLCA) are being adopted to evaluate the carbon footprint of construction projects comprehensively, from inception to decommissioning. Despite the widespread use of WLCA, there is a common assumption that the timing of carbon emissions has no impact on environmental burdens—a premise this report challenges.
Arguments
- Buying Time Argument: Delays in emissions offer "buying time" to mitigate the effects of these emissions, potentially averting more significant impacts later.
- Static Time-Horizon Argument: Delaying emissions reduces the cumulative impacts between the present and a fixed point in the future, offering a form of environmental "discounting."
- Social Time Preference Argument: Values the welfare of current societies more highly than that of future generations, suggesting a temporal prioritization in environmental valuation.
Approaches and Adoption
The report synthesizes these arguments from climate science, economics, and life cycle assessment methodologies. It identifies four academic approaches for evaluating these arguments and explores their adoption within the industry. As practices evolve, professionals are scrutinizing underlying assumptions to minimize environmental impacts, aiming to incorporate these insights into decision-making processes.
Application
The introduction of the 'time-value of carbon' concept supports industry practitioners in navigating the complexities of environmental decision-making. By understanding these arguments, professionals can make more informed choices that balance present and future impacts, contributing to sustainable development strategies.
Conclusion
While not exhaustive, this report serves as a foundational guide to the topic of the time-value of carbon. It encourages further discussion and research within the industry, emphasizing the importance of considering temporal dimensions in environmental impact assessments. The insights provided can help shape more nuanced and effective strategies for combating climate change.
