Sustainable Capital Projects: Leapfrogging the First Cost Barrier

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Sustainable Capital ProjectsLeapfrogging the
First Cost Barrier

• Dr. Annie R. Pearce
• Myers-Lawson School of Construction
• Virginia Tech

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Expectations about Sustainable Projects
The idealist says...
The pessimist says
The realist says...

• Learning curve

• Economies of scale

• Resource scarcity

• Stricter legislation

Unarguable regions...
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Revised Whole Project Cost Model
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Leapfrogging the First Cost Barrier

• What are the top strategies for leapfrogging the
  first cost barrier?
• How are others using these strategies effectively?

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Systems ThinkingQuestion the question...
OR
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Systems Thinking Question the question...

• Homestead Fire Station, Homestead, FL
• Anticipated budget cut in half - yikes!
• Whats the question?

Performance benefits - Infrastructure cost
avoidance - Reduced construction costs -
Proximity
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Systems Thinking Question the question...

• Phrase your problem and evaluation criteria in
  terms of performance requirements
• Think outside the box look at the big picture!
• Dont be satisfied with it cant be done
• Sometimes a crisis can result in better outcomes!

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Law of Diminishing Returns

• Conventional wisdom
• The more you throw at a problem, the less bang
  for the buck you get
• Theres a point beyond which you are spending
  more than you will recover over your investment
  horizon

(Hawken et al. 1999)
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Integrated Design
(Hawken et al. 1999)
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Integrated Design
Cost effectiveness limit
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Integrated Design
Why does this principle work?
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Exploiting Lovins Law
Run the law in reverse to find cost
discontinuities...

• Consider
• Construction costs and constructability
• Equipment selection and labor requirements
• Fundamental nature of different types of
  materials and equipment
• Vendor practices

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Servicizing/Leasing

• Puts product responsibility on manufacturer
• Encourages environmental responsibility,
  efficiency, and innovation
• Reduces liability and attention required from
  lessor
• Shifts cost to OM
• Maintenance contracts

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Multifunction Technologies

• Look for products that can play multiple roles
• Increased efficiency
• Reduced material use
• Reduced packaging
• Reduced construction time
• Reduced maintenance

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Technology Equivalence
?


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Technology Equivalence
?



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First Cost Premium Myth?

• Theres fruit, and then theres fruit
• Greener does not necessarily mean exotic,
  expensive, and unachievable
• Sometimes fruit has already fallen into your
  basket
• Start with low hanging, ripe fruit first

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Look for the no-brainers

• Lake Meredith National Rec. Area
• Wind-powered wind warning system
• Warns boaters when winds exceed 18 MPH
• Flashing lights and siren
• Powered exclusively by the wind

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Rapid payback/high SLOS strategies

• Choose strategies with rapid payback and high
  Sustainability Likelihood of Success (SLOS)
• Risk
• Reliability
• Value
• Difficulty

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Sustainability Likelihood of Success

• Risk - how likely is it that implementing the
  intervention will have the desired effect?
• Reliability - how likely is it that the desired
  effect will continue over time independent of
  user behavior?

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Sustainability Likelihood of Success

• Value - what are the chances that the
  intervention will achieve desired effects without
  additional negative effects? How much net
  positive impact per unit effort?
• Difficulty - given constraints available
  resources, how implementable is the intervention?
  How much is required? What barriers stand in the
  way?

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Thank you for your attention!
Got questions? Want to take it to the next
level? apearce_at_vt.edu http//www.sustainablefacil
ities.com [phone]