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Guide to Computing and Reporting the Life-Cycle Cost of Environmental Management Projects

Published

Author(s)

L I. Schultz, S F. Weber

Abstract

Life-cycle cost (LCC) analysis is an economic measurement technique used to determine the total cost of an investment project or activity over its lifetime. This Guide applies the principles of LCC to the special requirements of Environmental Management (EM) projects. The approach integrates two American Society for Testing and Materials (ASTM) consensus standards: a widely used standard on LCC, and a recently adopted standard on the work breakdown structure expressed in the Environmental Cost Element Structure (ECES) developed by a Federal interagency working group concerned with efficient execution of EM projects. The LCC method described in the Guide can be applied to any EM project that has adopted the ECES cost management framework. Users of the Guide are assumed to be familiar with the ECES and the consensus standards that support it. The guide covers economic comparisons across both environmentally equivalent alternatives applicable to a single EM project and several EM projects. Both one-time and recurring expenditures are covered as well as discounting on both an annual and a monthly basis. Several realistic case examples illustrate the method.
Citation
NIST Interagency/Internal Report (NISTIR) - 6968
Report Number
6968

Keywords

discounting, economic evaluation, engineering economics, environmental management, investment analysis, life-cycle costing, present value, project evaluation, standards

Citation

Schultz, L. and Weber, S. (2003), Guide to Computing and Reporting the Life-Cycle Cost of Environmental Management Projects, NIST Interagency/Internal Report (NISTIR), National Institute of Standards and Technology, Gaithersburg, MD (Accessed February 25, 2024)
Created March 1, 2003, Updated February 19, 2017