Multiple methods for measuring discount rate of carbon costs in construction projects

School of Civil Engineering and Architecture, Guangxi University, Nanning, 530004, China

^* Corresponding author: kun-lu@gxu.edu.cn

Abstract

As global climate change intensifies, the construction sector, being a significant contributor to carbon emissions, plays a crucial role in estimating carbon costs for sustainable development. However, the methodology for determining the discount rate for carbon costs remains unclear in construction projects. This paper compares three approaches to measuring discount rates of carbon costs: 1) interest rate aggregation method, 2) investment return interpolation method, and 3) climate risk ranking method. In the case study analysis, the choice of discount rate significantly impacts the assessment results of life cycle carbon costs. This study also examines the applicability, advantages, and limitations of each method, offering recommendations accordingly. This research provides theoretical support and decision-making references for evaluating the temporal value of carbon costs in construction projects.