ABSTRACT
At the end of the day, private companies, public agencies, and all owners need to stay in business, which is often driven by financial considerations. Many of these financial choices are made by only considering today’s costs. However, one of the key concepts of economics in sustainability is evaluating whether spending more today could save money tomorrow, looking beyond today’s cost and ensuring that, in the long term, the best economic decisions are being made. This concept is the cornerstone of the economic pillar of sustainability. Traditional economic considerations of sustainability revolve around three main points: local impact, material savings, and reuse. Considering economics and local impact, sustainable practices provide employment and stimulate local economy. Saving materials by reusing existing materials allows organizations to reduce upfront costs, transportation of materials, and onsite waste, as well as realize future savings of reducing material sent to landfills. While these are important concepts of reuse, raw costs are not the only factor. Maintenance and disposal costs may be quite different depending on the manufactured product or the engineering infrastructure. Additionally, long-term performance, if known, is not taken into account when only initial costs are considered. With these considerations in mind, it becomes apparent that multiple challenges exist while considering the long-term economic perspectives of sustainability. This chapter introduces four tools which can more accurately capture costs throughout the full life span: life cycle cost analysis (traditional and probabilistic), present/future/annual worth, rate of return, and benefit/cost ratio.
