A Circular Life Cycle Cost Model

Abstract

The construction sector significantly contributes to global waste generation and greenhouse gas emissions, leading to environmental issues such as climate change, global warming, and resource depletion. The conventional linear economy in the construction sector follows a take-make-waste approach, resulting in adverse environmental impacts. The concept of a circular economy (CE) aims to address these issues by promoting regenerative practices and closing the material use cycle through reuse and recycling. However, many companies hesitate to invest in circular approaches due to higher initial costs and limited knowledge. Consequently, research focusing on understanding the degree of circularity and its financial implications has become crucial in facilitating the global transition towards circularity in the built environment. This research delves into methods aimed at improving the comprehension of circularity in real estate development projects and understanding the associated costs. The primary objective is to devise a circular life cycle cost model (C-LCC) which seeks to bridge the gap between the evaluation of circularity and its financial implications throughout the life of a building. Unlike traditional business cases that only consider initial investment costs and potential revenue from building projects, this innovative model provides a comprehensive tool for evaluating the financial costs and benefits associated with varying degrees of circularity. An extensive literature review and interviews were conducted to establish a solid foundation for understanding the key concepts and principles of the circular economy and its application in the built environment. The developed C-LCC model is applied to a real estate development project, namely Coolbase in Rotterdam, to simulate the financial outcomes of various circular building design scenarios. This improves the understanding of the relationship between circularity and associated finances. The disparate simulations underscore the critical role of building design, material selection, and the degree of building disassembly as principal influences on the level of circularity and corresponding financial implications. The model illustrates the costs and benefits across various stages of a building's lifecycle, including the initial, operational, and end-of-life phases of a construction project, while emphasizing the potential benefits inherent in various circular design scenarios. In conclusion, this study provides valuable guidance for a more sustainable and circular future, with the model providing insight into the potential costs and benefits that depend on the degree of circularity. Moreover, the results can serve as a tool for decision-making for circular choices in real estate development.