It is a fact of life that much of the way modern society organises itself requires accountability. This, it might be argued, is a fine sentiment because it provides a check and a balance upon error and excess. In the current market place economy, one of the requirements of accountability, means cost accounting. Some enlightened building owners have, however, taken a step change in

whole life costs by including in the accounting system environmental and sustainable issues promulgated by the Government commission chair Sir Jonathan Porritt. A business philosophy is emerging which recognizes that not only can

care for the environment in its broadest sense be profitable but it can result

to consider step change in philosophy in relation to the whole life costs of the services in a new or refurbished building and how environmental and sustainable issues might be factored into the business accounts. Whole life costs are discussed further in Chapter 12. However, the matters that concern us here are those relating to operating

costs and management of fossil fuel consumption in building services. The energy manager, consultant or facilities manager has to show senior management or the client that the costs of saving energy (which will contribute even if it is in a small way to an increase in the quality of the environment) are met by cost savings in the consumption of fossil fuel and hence a reduction in the expenditure column of the company’s annual balance sheet. The Climate Change Levy and rising fuel costs will provide the focus here. There are various ways of looking at the benefits of cost accounting measures for energy saving. In some of the examples so far in the text simple payback is used. This is

acceptable if inflation and interest rates are low and the period of payback is short. Some organisations prefer simple payback and simple costing of alternative energy saving schemes because of the vaguaries of future inflation and interest rates. However, the client or investor may want to compare the potential return on an investment in a proposal for energy saving with the potential return on investment in another aspect of the business. Whole life costing also requires a more sophisticated approach. For this reason other ways of costing the benefits attributable to oper-

ating costs and energy saving proposals are considered in this chapter and compared with simple payback.