This three-part series on Building a Decarbonization Roadmap guides you through the process of achieving sustainability while illuminating the path toward a greener future. This approach aligns well with building campuses such as installations, airports, and higher education institutions.
In Part I, we discussed the definitions of Scope 1, 2, and 3 emissions, setting the boundaries for decarbonization, data gathering, and goal setting as part of master planning process. In Part II, we focused on benchmarking and strategies to take to reduce emissions and meet your decarbonization plan. In this final blog post, Part III, we’ll explore financial viability, capital planning, scheduling, and forecasting for successful decarbonization planning.
Budgeting: Sound Financial Strategies for Success
Whether you anticipate a luxury vacation or an economic weekend getaway, you need to know your up-front costs to determine the best course to take. When creating your decarbonization roadmap, financial viability and understanding your return on investment (ROI) are foundational tools for successful preparation.
For example, with the cost of construction changing rapidly in today’s marketplace, it’s wise to consider a third-party estimator to estimate the cost of decarbonization measures and include all necessary markups, labor, and contingencies. An escalation rate estimate is also useful for capital planning purposes.
Decarbonization measures should consider tax incentives, notably the Inflation Reduction Act (IRA) which includes incentives for both private and public entities, local and state grants, and utility incentives.
Financial Viability: Planning & Prioritizing
Determining which measures will need to be cost-justified from a financial viability perspective will help you prioritize. Some decarbonization strategies will have an identifiable return, such as energy efficiency measures. Some strategies will not have an independent ROI, such as adding a substation for increased electrification demand, battery storage (depending on your utility rate structure), or embodied carbon reduction measures—though are implemented for resiliency or to meet greenhouse gas (GHG) emission goals.
Prioritization is often based on more than first cost and energy savings. Consider what’s most important with the greatest GHG impact, to best payback period or ROI to total cost of ownership analysis. A total cost of ownership may include not only life cycle cost but also environmental factors (GHG reduction) and social factors (student satisfaction, impact of green certifications such as LEED or STARS for higher education campuses).
Forecasting & Roadmap: Anticipate What’s Coming Down the Road
We often apply a conservative (also called business-as-usual), moderate, and aggressive estimate on carbon scenarios because this is not an exact science and depends on many factors in the future that we cannot always foresee. Once we determine the carbon scenario that the client wants to pursue, then measures are prioritized based on year of occurrence to meet decarbonization goals. We also provide a roadmap that includes an annual capital plan, annual future carbon scenarios, and develop a long-term schedule.
To realize savings, the short-term goals should be refined further. Typically, we look at least three to five years ahead and include more specifics such as quarterly goals and action items, assignments of responsibility, and goal-tracking methodology. From there, goals and targets may need to be revisited to determine if any adjustments based on the original projections need to be made, before we can refine the decarbonization roadmap.
In Closing: You’re Well on Your Way!
Now that we’ve set the boundaries for decarbonization, established goals, developed decarbonization strategies to reduce emissions, determined your capital planning strategy, and created the schedule, you are well on your way to meet your decarbonization destination. I hope you feel more prepared to develop your own roadmap for a reduced-carbon future.
Happy trails—with fewer emissions!
