Why does the timing of carbon emissions matter in whole life carbon assessments?

Could professionals consider the time-value of carbon when making project-specific decisions? Anil Sawhney, head of sustainability at RICS, and Will Wild, Senior Engineer at Arup, examine the principle that emissions today should be valued differently from those emitted tomorrow.

Whole life carbon assessments (WLCA) help quantify the environmental impact of buildings and infrastructure across their life cycle. Most current assessments treat emissions equally regardless of when they occur during an asset's 60-year life (for buildings in the UK) or 120-year life (for infrastructure in the UK). One ton of carbon emitted today is treated the same as a ton emitted decades later. However, this overlooks a critical factor: the ‘time-value of carbon’ – the principle that we should value emissions today differently from emissions tomorrow.

In the current early adoption of WLCA, simplicity is prioritised over complexity. As the industry matures in its carbon assessment practices, practitioners are grappling with key questions such as:

• Should upfront embodied carbon savings be valued more than future operational savings?
• How should we value delaying emissions?

A recent Arup report, The time-value of carbon: An Introductory exploration to support better decision making, examines these questions through the lens of climate science and economics. This article summarises the report, offering key insights to help practitioners make more informed decisions about the time-value of carbon.

Understanding the time-value of carbon

The timing of emissions significantly influences how we might value their climate impact in several ways:

• Climate impact: carbon released today remains in the atmosphere longer than delayed emissions, contributing to prolonged warming effects when measured over a fixed time-horizon.
• Technology evolution: delaying emissions allows time for cleaner technologies and materials to emerge and improve efficiency.
• Grid decarbonisation: future emissions may occur in the context of cleaner energy systems.

For assessors, this means moving beyond treating all emissions equally over time and considering:

• when emissions occur in the life cycle of a project
• whether materials store carbon temporarily and
• how delayed emissions interact with future decarbonisation efforts.

Why is considering time so important?

This temporal dimension affects key decisions in carbon assessments, particularly when evaluating:

• carbon storage in materials like timber
• trade-offs between embodied and operational carbon
• effectiveness of carbon offset strategies and
• payback periods for energy efficiency measures.

As WLCA practices evolve, integrating the time-value of carbon ensures that assessments better reflect real-world climate impacts, leading to smarter material choices and carbon strategies.

Three key arguments for valuing future carbon emissions

The Arup report synthesises three distinct arguments for valuing future carbon emissions differently than present emissions.  Notably, each argument grapples with subjectivity inherent in value decisions.

The buying time argument

• Principle: delaying emissions creates opportunities to avert them.
• Application: for instance, consider how future grid decarbonisation affects operational emissions.
• Example: electrified heating systems may benefit from increasingly clean electricity.
• Challenges: the argument is hard to implement consistently because its strength is highly dependent on the length of delay (i.e. the longer the better) and confidence in how the delay is being assured.

The static time-horizon argument

• Principle: earlier emissions have greater cumulative warming effects over a fixed time period.
• Application: weighting those emissions that happen sooner more highly in WLCAs.
• Example: implemented in France’s RE2020 regulations for the life cycle assessment of new buildings.
• Challenges: implementation requires a subjective decision on an appropriate time-horizon, beyond which emissions are ignored.

The social time preference consideration

• Principle: we should delay emissions because we may value the welfare of today’s society higher than that of tomorrows.
• Application: use of social discount rate to value emissions that occur at different times.
• Example: efforts to apply discounting to physical carbon emissions is principally limited to academia.
• Challenges: implementation requires selecting an appropriate social discount rate, which has a rich history of debate, with many strong arguments advocating for a zero or near-zero rate.

The report itself does not aim to endorse any particular argument, but instead details their considerations, consequences and criticisms to help designers grapple with these.

Practical applications for whole life carbon assessors

While the report recommends against implementing the time-value of carbon in standard WLCAs at this stage (to avoid fragmenting developing industry datasets), practitioners can apply these principles to bring additional complementary perspectives to specific design decisions.

1.     Evaluating sequestered carbon in materials (e.g. timber and bio-based alternatives)

• Challenge: WLCA typically assumes sequestered carbon in timber or bio-based materials is released at end-of-life, treating it as neutral over time.
• Practical application:
  • Consider end-of-life scenarios – will the timber be reused, repurposed or burned?
  • Use dynamic carbon assessment methods rather than static lifecycle carbon assessment (LCA) to reflect the time value of carbon in sequestration.
     

2.     Balancing embodied and operational carbon (trade-offs in design choices)

• Challenge: many low-carbon strategies require upfront carbon investments, such as solar-shading or triple glazing.
• Practical application:
  • Compare different materials and system choices to determine the best trade-off over a project's life.
  • Use grid decarbonisation forecasts to understand when the investment of upfront embodied carbon in the building fabric does, and does not, pay itself off with ongoing operational carbon savings.
  • Balance energy-efficient retrofits where long-term savings outweigh embodied carbon spikes.
     

Key considerations for assessors

The time-value of carbon can provide additional insight when considering individual whole life carbon decisions, ensuring that decisions reflect both immediate and long-term climate impacts. Assessors could:

• recognise that timing matters – earlier emissions contribute to longer-term warming, while delayed emissions may allow time for technological advancements and grid decarbonisation
• balance embodied and operational carbon trade-offs – high upfront emissions may be justified if they lead to significant long-term carbon savings
• account for sequestration potential in bio-based materials – materials like timber and other low-carbon innovations store carbon, but how they are treated in WLCA depends on assumptions about end-of-life emissions.
   

While low carbon materials – including bio-based alternatives – play a vital role in reducing emissions, they are often hard to value in static LCA approaches that ignore the time-value of carbon. Static assessments treat all emissions as equal, failing to recognise that materials that have stored carbon for decades (e.g. mass timber) provide tangible benefits by delaying atmospheric emissions.

While the time-value of carbon offers important insights for project-specific decisions, its widespread integration into WLCAs requires careful consideration – as the Arup report notes. The industry must balance the need for more sophisticated carbon accounting with maintaining consistent, comparable assessment methods.

As assessment methodologies mature, understanding the time-value of carbon will help practitioners make more nuanced decisions about material selection, energy systems and design strategies. This evolution in thinking supports the industry's broader goal to create a sustainable built environment that considers both immediate and long-term climate impacts.