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Valuing Climate Action Today vs. Tomorrow
Incorporating the time value of carbon into our decision-making can help us avoid the worst effects of climate change.
In life, we often prioritize immediate benefits over long-term gains. This concept, known as the time value of decisions, also applies to climate action. Understanding the Time Value of Carbon can help us make better choices in construction materials and building design, ultimately aiding our fight against climate change.
What is the Time Value of Carbon?
The Time Value of Carbon stresses the importance of reducing greenhouse gas emissions sooner rather than later. Acting now can help us avoid crossing dangerous tipping points, which could lead to irreversible and potentially accelerating negative consequences, such as melting permafrost and reduced solar reflectance from ice and snow. With a 1.5℃ increase in global warming potentially activating multiple tipping points, immediate action is crucial to mitigate the worst effects of climate change. We are on track to exceed the 1.5℃ carbon budget by 2030.
Incorporating the Time Value of Carbon in Building Design
The most common way to capture the time value, i.e., to compare upfront versus eventual, is by discounting future events. This is similar to using interest rates in finance. For buildings, we can achieve this by adding the upfront carbon emissions or storage of each framing system (as presented below) to the present value of the time-discounted annual operating emissions (for example, over a period of 50 years). The result is a whole life cycle carbon footprint in a single number.
In an analysis comparing different framing systems, the chart below demonstrates that the BamCore Prime Wall™ framing system has the lowest total carbon footprint for a building over a wide range of discount rates. Furthermore, at discount rates above 30%, the building frame allows whole-life net carbon storage.
The Importance of Near-Term Action and Nature-Based Solutions
The analysis results clearly show that using fast-growing, bio-based materials in building construction produces the least CO2 emissions. By taking immediate action and utilizing nature-based solutions, we can create considerable value in the fight against climate change. Given the escalating risks associated with the pace and extent of climate action, it is crucial to incorporate the Time Value of Carbon in our decision-making.
Conclusion
Understanding and applying the Time Value of Carbon in construction materials and building design can help us make more informed decisions about climate action. By prioritizing near-term action and embracing nature-based solutions, we can work together to mitigate the worst effects of climate change and create a more sustainable future for future generations.