CHAPTER I.

INTEGRATED ASSESSMENT MODEL OF

CLIMATE CHANGE MITIGATION AND IMPACTS



1.1. Climate Change Mitigation

Climate change mitigation is action to decrease the intensity of radiative forcing in order to
reduce the potential effects of global warming. In contrast, adaptation to global warming involves
acting to tolerate the actual or expected effects of global warming (IPCC 2010). Most often, climate
change mitigation scenarios involve reductions in the concentrations of greenhouse gases, either by
reducing their sources or by increasing their sinks (Molina 2009).
The UN defines mitigation in the context of climate change, as a human intervention to reduce
the sources or enhance the sinks of greenhouse gases. Examples include using fossil fuels more
efficiently for industrial processes or electricity generation, switching to renewable energy (solar
energy or wind power), improving the insulation of buildings, and expanding forests and other
"sinks" to remove greater amounts of carbon dioxide from the atmosphere (GCCA 2012). The
IAEA, an international organization using the UN flag and reporting to the UN, asserts that nuclear
power belongs to the set of options available to reduce greenhouse gas emissions in the power
sector (IAEA 2008).
Scientific consensus on global warming, together with the precautionary principle and the fear
of abrupt climate change (Stephen 2004) is leading to increased effort to develop new technologies
and sciences and carefully manage others in an attempt to mitigate global warming. Most means of
mitigation appear effective only for preventing further warming, not at reversing existing warming
(Huntingford 2009). The Stern Review identifies several ways of mitigating climate change. These
include reducing demand for emissions-intensive goods and services, increasing efficiency gains,
increasing use and development of low-carbon technologies, and reducing fossil fuel emissions
(Stern 2007).
The energy policy of the European Union has set a target of limiting the global temperature rise
to 2 C (3.6 F) compared to preindustrial levels, of which 0.8 C has already taken place and
another 0.50.7 C is already committed (Geden 2010).

1.2. Life Cycle Process Model of Climate Change Mitigation

By modelling and forecasting future perspectives and trends of climate change mitigation, it is
possible to get ready to respond to the variation of micro, mezo and macrolevel variables. In this
module climate change mostly is analyzed from social science and policy perspective. The life cycle
process model of climate change mitigation suggested by this research is based on presumption that
the efficiency of climate change mitigation depends on many micro, mezo and macrolevel variables.
The presence of specific micro, mezo and macrolevel variable factors right away imposes objective
limitations for efficient mitigation of climate change.
Therefore, basing oneself on main worldwide development trends and best practices of climate
change mitigation, it is possible to issue recommendations on the increase of efficiency of climate
change mitigation in specific country. When rational variable micro, mezo and macrolevel factors
determines for specific country have been realized, they should create better and more favourable
conditions for efficient realization of climate change mitigations projects would be created.
The research aim was to produce an analytical model of the rational climate change mitigation
in specific country by undertaking a complex analysis of micro, meso and macroenvironment
factors affecting it and to give recommendations on the increase of its competitive ability.
The research was performed by studying the main worldwide development trends and best
practice, taking into consideration specific countries history, development level, needs and
traditions. Simulation was undertaken to provide insight into creating an effective environment for
the climate change mitigation by choosing rational micro, meso and macrofactors. The most of
stakeholders of climate change mitigation cannot correct or alter the micro, mezo and macrolevel
variables, but they can go into the essence of their effect and take them into consideration when
realizing various activities. Stakeholders, knowing the micro, mezo and macrolevel factors affecting
the activities being realized, can organize their present and future activities more successfully.
To design and achieve effective life cycle of a climate change mitigation a complex analysis of
its stages as well as stakeholders, their aims and potentialities is needed. The effect of micro, meso
and macro environmental factors should also be taken into account.
Dozens of millions of climate change mitigation life cycle alternative versions can be obtained.
The diversity of solutions available contributes to more accurate evaluation of economical, political,
technological, emotional, climatic and other conditions, risk exposure, as well as making the project
cheaper and better satisfying different stakeholders requirements. This also leads to better
satisfaction of the needs of all parties involved in the project design and realization.
Various stakeholders are involved in the life cycle of a climate change mitigation, trying to
satisfy their needs and affecting its efficiency. The level of the efficiency of life cycle of a climate
change mitigation depends on a number of variables, at three levels: micro, meso and macro level.
A few examples regarding relations of climate change and micro (holiday travels), meso
(Cherry blossom festivals), macro level factors and stakeholders are follows.
Whilst much effort has been made to communicate to the public the importance of reducing
carbon footprints in the home, one area where emissions are growing rapidly and little attempt has
been made to increase consumer understanding of the impacts is holidays, particularly those
involving air travel. Using focus group research, this paper explores tourists awareness of the
impacts of travel on climate change, examines the extent to which climate change features in
holiday travel decisions and identifies some of the barriers to the adoption of less carbon-intensive
tourism practices. The findings suggest that many tourists do not consider climate change when
planning their holidays. The failure of tourists to engage with the climate change impact of
holidays, combined with significant barriers to behavioural change, presents a considerable
challenge in moving the tourism industry onto a sustainable emissions path. The findings are
discussed in relation to theoretical perspectives from psychology and sociology (Hares 2010).
Most global climate change models predict serious ecological and social problems. In Japan,
biologists have found climate change is affecting species and ecosystems, including the earlier
flowering time of cherry trees which are an important cultural symbol in Japan. Cherry blossom
festivals are also important to local economies. This study explored the perceptions of Japanese
residents regarding climate change impacts on culturally significant events such as flower timing of
cherry trees. Sakurai et al. (2011) conducted interviews of stakeholders of three cherry blossom
festivals, including sixteen organizers of festivals and 26 managers of festival-dependent
businesses, to understand their awareness, attitudes and behaviors toward global climate change and
impacts on cherry blossom festivals. Most organizers of the festival in Kakunodate were concerned
about global warming and its impact on cherry blossom times while organizers of festivals in
Nakano and Komoro felt it was unimportant if flower timing affected the festival schedule. Most
(92%) managers of festival-dependent businesses mentioned that global warming is occurring and
affecting the flower timing of cherry trees, but there were diverse perceptions of global warming
impacts on their business. Managers more dependent on income from cherry blossom festivals
indicated greater concern for the effects of climate change (Sakurai et al. 2011).
Citizens support for policies that aim to curb carbon emissions and energy use is often seen as
informed by their values, attitudes and perceptions of the environmental problem in question.
Fischer et al. (2011) argue that we also need to understand how people conceptualise policies and
the governance approaches underpinning them to be able to judge the likely acceptance of policy
change. Fischer et al. (2011) draw on qualitative interviews (n = 202) from five European countries
to explore citizens views on governance approaches to stimulate behavioural change in the field of
resource use, including regulations, price changes, collective action, technological change and
education. Fischer et al. (2011) found that many of our interviewees referred to generalised
characteristics of humankind and contemporary society to back up their arguments for or against
specific governance approaches. In particular, many interviewees concurred that people in general
were so self-centred, driven by habit and money- and consumption-oriented that only strict
regulations, drastic price changes and technological innovation could possibly achieve widespread
behavioural change. As a consequence, such folk psychologies can have substantial impact not
only on public acceptance, but also on the success of policy measures that aim to reduce citizens
resource use (Fischer et al. 2011).
Climate change has been identified as potentially the biggest health threat of the 21st century.
Canada in general has a well developed public health system and low burden of health which will
moderate vulnerability. However, there is significant heterogeneity in health outcomes, and health
inequality is particularly pronounced among Aboriginal Canadians. Intervention is needed to
prevent, prepare for, and manage climate change effects on Aboriginal health but is constrained by a
limited understanding of vulnerability and its determinants. Despite limited research on climate
change and Aboriginal health, however, there is a well established literature on Aboriginal health
outcomes, determinants, and trends in Canada; characteristics that will determine vulnerability to
climate change. In this paper Ford et al. (2010) systematically review this literature, using a
vulnerability framework to identify the broad level factors constraining adaptive capacity and
increasing sensitivity to climate change. Determinants identified include: poverty, technological
capacity constraints, socio-political values and inequality, institutional capacity challenges, and
information deficit. The magnitude and nature of these determinants will be distributed unevenly
within and between Aboriginal populations necessitating place-based and regional level studies to
examine how these broad factors will affect vulnerability at lower levels. The study also supports
the need for collaboration across all sectors and levels of government, open and meaningful
dialogue between policy makers, scientists, health professionals, and Aboriginal communities, and
capacity building at a local level, to plan for climate change. Ultimately, however, efforts to reduce
the vulnerability of Aboriginal Canadians to climate change and intervene to prevent, reduce, and
manage climate-sensitive health outcomes, will fail unless the broader determinants of socio-
economic and health inequality are addressed (Ford et al. 2010).
In the U.S., public support for federal, state and local efforts to reduce greenhouse gases
(GHGs) continues to be a crucial element of the political viability of these proposals. Shwom et al.
(2010) present a detailed analysis of the reasons given by the general public of Michigan and
Virginia for supporting or rejecting a number of policies that could be implemented to meet GHG
reductions. The data allow us to analyze the relationships between reasons provided by respondents,
social psychological and demographic characteristics, and policy support. This analysis can provide
policymakers pragmatic guidance in (1) developing tactics to engage the public that build on current
concerns about climate change policies and (2) crafting and communicating policies that garner
support from various segments of the public. This analysis also raises theoretical questions
regarding the relationship between public discourse on environmental issues and the formation of
public policy support. Shwom et al. (2010) suggest that future efforts to understand the U.S.
dynamics of public support for climate change policies could benefit from understanding the public
discursive and the reasoning processes that underlie public opinion formation (Shwom et al. 2010).
Anti-coal and some investment policies are widely justified with reference to global warming.
Political analysis suggests that these policies are supported by the reinforcing interests of three
powerful lobbies: scientific institutions engaged in atmospheric research and earth observation,
energy corporations harmed by low fossil fuel prices or supplying clean technologies, and
numerous interlocking bureaucracies. Together they have succeeded in maintaining momentum in
current climate negotiations (Boehmer-Christiansen 1997).
The problem is how to define an efficient climate change mitigation life cycle when a lot of
various stakeholders are involved, the alternative project versions come to hundreds million and the
efficiency changes with the alterations in the environment conditions and the constituent parts of the
process in question. Moreover, the realization of some objectives seems more rational from the
economic perspective thought from the other qualitative perspectives they have various
significance. Therefore, it is considered that the efficiency of a climate change mitigation life cycle
depends on the rationality of its stages as well as on the ability to satisfy the needs of the
stakeholders and the rational character of environment conditions.
Formalized presentation of the research shows how changes in the environment and the extent
to which the goals pursued by various stakeholders are satisfied cause corresponding changes in the
value and utility degree of a climate change mitigation life cycle. With this in mind, it is possible to
solve the problem of optimization concerning satisfaction of the needs at reasonable expenditures.
This requires the analysis of climate change mitigation life cycle versions allowing to find an
optimal combination of goals pursued and finances available.
The research object is a climate change mitigation life cycle, stakeholders striving to attain their
goals and micro, meso and macro environment making an integral whole.
The Life Cycle Process Model of Climate Change Mitigation was developed with the goal of
integrating different quantative and qualitative aspects of the process over the life of the climate
change mitigation. This six-stage model is presented in brief heretofore (see Fig. 1.1):



Fig. 1.1. Climate change mitigation quantitative and qualitative analyses aspects

Stage I. Comparative description of the climate change mitigation basing oneself on main
worldwide development trends and best practices (see Fig. 1.1):
Determining a system of criteria characterizing the efficiency of a climate change mitigation
by employing relevant literature and expert methods.
Describing, per this system of criteria, the present state of the climate change mitigation in
countries under consideration in conceptual (textual, graphical, numerical and such) and
quantitative forms.
Stage II. Comparison and contrast of the climate change mitigation in countries under
consideration:
Identifying the global development trends (general regularities) of the climate change
mitigation.
Identifying the differences in climate change mitigations in countries under consideration.
Determining the pluses and minuses of these differences.
Energetic, Environmental
Legal/Regulatory
Infrastructure
Aspects of
climate change
quantitative and
qualitative analyses
Psychological
Educational
Environmental
Quality of life
Emotional
Technological, Technical

Pollution, Health
Aesthetic, Comfort

Religion
Social, Cultural
Security,
Independence
Ethical, Attitudes
Political, Economical

Determining the best practice for the climate change mitigation in countries under
consideration as per actual conditions.
Estimating the deviation between the knowledge stakeholders have of worldwide best
practices and their practice-in-use.
Stage III. Development of certain general recommendations on how to improve the knowledge
levels of stakeholders.
Stage IV. Submission of certain recommendations to stakeholders including several particular
alternatives for each general recommendation proposed.
Stage V. A multiple criteria analysis of the composite parts of a climate change mitigation and
selection of the most efficient life cycle for the project henceforth interlinking the received
compatible and rational composite parts of a climate change mitigation into a full climate change
mitigation project.
Stage VI. Transformational learning and the redesign of mental and practical behavior.
A partial description of some stages (analysis of qualitative aspects (Section 3), the cost of
climate change (Section 4), impact of climate change on energy use in the built environment and a
Model for a Complex Analysis of a Passive House Life Cycle (Section 5)) follows to illustrate the
above-presented Model.

1.3. Analysis of Qualitative Aspects

The Life Cycle Process Model of Climate Change Mitigation analyses was developed with the
goal of integrating the environmental, energetic, political, economical, legal/regulatory,
infrastructural, technical, technological, pollution, health, quality of life, social, cultural, ethical,
psychological, emotional, religious, ethnic and other aspects of the process over the life of the
climate change mitigation. This six-stage model is presented in brief heretofore (see Fig. 1.1).
Description of some above factors are follow.

1.3.1. Climate Mobility Social and Civil Conflicts

Climate change can increase societies propensity to conflict by changes in socio-structural
conditions (e.g., resource scarcity, migration). Fritsche et al. (2012) propose an additional, subtle,
and general effect of climate change threat via increases in authoritarian attitudes. Three studies in
Germany and the UK support this suggestion. Reminding participants of the adverse consequences
climate change may have for their country increased the derogation of societal groups that may
threaten the collective (e.g., criminals) as well as general authoritarian attitudes. Salient climate
change threats also led to system justification and approval of system supporting groups (e.g.,
judges) in those people who were highly identified with their nation. Fritsche et al. (2012) discuss
the implications of these findings for the explanation of authoritarian attitudes and the question of
how societies may cope with the subtle social psychological effects of climate change (Fritsche et
al. 2012).
Climate change is expected to bring about major change in freshwater availability, the
productive capacity of soils, and in patterns of human settlement. However, considerable
uncertainties exist with regard to the extent and geographical distribution of these changes.
Predicting scenarios for how climate-related environmental change may influence human societies
and political systems necessarily involves an even higher degree of uncertainty. The direst
predictions about the impacts of global warming warn about greatly increased risks of violent
conflict over increasingly scarce resources such as freshwater and arable land. Raleigh and Urdal
(2007) argue that our best guess about the future has to be based on our knowledge about the
relationship between demography, environment and violent conflict in the past. Previous rigorous
studies in the field have mostly focused on national-level aggregates. Raleigh and Urdal (2007)
represents a new approach to assess the impact of environment on internal armed conflict by using
georeferenced (GIS) data and small geographical, rather than political, units of analysis. It addresses
some of the most important factors assumed to be strongly influenced by global warming: land
degradation, freshwater availability, and population density and change. While population growth
and density are associated with increased risks, the effects of land degradation and water scarcity
are weak, negligible or insignificant. The results indicate that the effects of political and economic
factors far outweigh those between local level demographic/environmental factors and conflict
(Raleigh and Urdal 2007).
Allouche (2011) looks at the interrelationship between water and food security. More
specifically, Allouche (2011) examines the resilience and sustainability of water and food systems
to shocks and stresses linked to different levels and intensity of conflict, global trade and climate
change. Allouche (2011) makes four points: (1) that resource scarcity as a driver of conflict is
inconclusive especially at regional and national levels (2) most insecurities surrounding water and
food are explained by political power, social and gender relations; (3) global trade has enabled
national food and water security, but that is now threatened by increasing food prices, food
sovereignty movements and land grabbing (4) and that water and food security will face major
challenges under conditions of climate change (Allouche 2011).
The conventional discourse relating climate change to conflict focuses on long term trends in
temperature and precipitation that define ecosystems and their subsequent impact on access to
renewable resources. Because these changes occur over long time periods they may not capture the
proximate factors that trigger conflict. Hendrix and Glaser (2007) estimate the impact of both long
term trends in climate and short term climatic triggers on civil conflict onset in Sub-Saharan Africa.
Hendrix and Glaser (2007) find that both operationalizations have a significant impact. Climates
more suitable for Eurasian agriculture are associated with a decreased likelihood of conflict, while
freshwater resources per capita are positively associated with the likelihood of conflict. Moreover,
positive changes in rainfall are associated with a decreased likelihood of conflict in the following
year. Hendrix and Glaser (2007) also assess the outlook for the future by analyzing simulated
changes in precipitation means and variability over the period 20002099. Hendrix and Glaser
(2007) find few statistically significant, positive trends in our measure of interannual variability,
suggesting that it is unlikely to be affected dramatically by expected changes in climate (Hendrix
and Glaser 2007).
In climate change discourse, climate mobility is often characterised as the production of
refugees, with a tendency to discount long histories of ordinary mobility among affected
populations. The case of Tuvalu in the Pacific juxtaposes migration as everyday practice with
climate refugee narratives. This climate-exposed population is being problematically positioned to
speak for an entire planet under threat. Tuvaluans are being used as the immediate evidence of
displacement that the climate change crisis narrative seems to require. Those identified as imminent
climate refugees are being held up like ventriloquists to present a particular (western) crisis of
nature. Yet Tuvaluan conceptions of climate challenges and mobility practices show that more
inclusive sets of concepts and tools are needed to equitably and effectively approach and
characterise population mobility (Farbotko and Lazrus 2012).

1.3.2. Climate Change and Human Culture

If solar variability affects human culture it most likely does so by changing the climate in which
the culture operates. Variations in the solar radiative input to the Earths atmosphere have often
been suggested as a cause of such climate change on time scales from decades to tens of millennia.
In the last 20 years there has been enormous progress in our knowledge of the many fields of
research that impinge on this problem; the history of the solar output, the effect of solar variability
on the Earths mean climate and its regional patterns, the history of the Earths climate and the
history of mankind and human culture. This new knowledge encourages revisiting the question
asked in the title of this talk. Several important historical events have been reliably related to
climate change including the Little Ice Age in northern Europe and the collapse of the Classical
Mayan civilization in the 9th century AD. In the first section of this paper we discus these historical
events and review the evidence that they were caused by changes in the solar output. Perhaps the
most important event in the history of mankind was the development of agricultural societies. This
began to occur almost 12,000 years ago when the climate changed from the Pleistocene to the
modern climate of the Holocene (Feynman 2007).
Feynman (2007) discussed two examples of the effects that relatively small variations of
climate have had on civilizations and their agriculture in the last 1000 years. In these cases evidence
was given that the variations were part of a worldwide response pattern and that they were
associated with the Sun. Here, Feynman (2007) describes the early development of agriculture and
how long it took to make the transition from a hunter gatherer society to an agriculturally based
society. Feynman (2007) emphasizes the role the climate stability may have played in the
establishment of agriculture. Feynman (2007) reviews the Climate Proxy Records evidence that
until the end of the Last Ice Age there was always a rapidly varying climate to interfere with that
transition. Feynman (2007) suggests that the sudden ceasing of those variations was the trigger that
allowed agriculture to develop. The four well-known examples of independent agricultural
societies, the Middle East, China, Meso-America, and the Andes-Amazon area, were developed in
societies that were very distant from one another and showed no evidence of cultural exchange.
In summary there is considerable evidence that climate variations in response to low frequency
solar variations have had major effects on cultures during the last 1500 years. We also hypothesize
that the large climate variations in the same frequency range may have had a role in inhibiting the
development of agriculture during the Pleistocene and it was their marked decrease in amplitude
that allowed agriculture to develop independently almost simultaneously in multiple regions of the
world when the Holocene began at the end of the cold period called the Younger Dryas (Feynman
2007).
Geel et al. (2004) described hypothesis regarding climate change and the expansion of the
Scythian culture after 850 BC. In south-central Siberia archaeological evidence suggests an
acceleration of cultural development and an increase in the density of nomadic populations around
850 BC. Geel et al. (2004) hypothesize a relationship with an abrupt climatic shift towards
increased humidity caused by a decline of solar activity. Areas that initially may have been hostile
semi-deserts changed into attractive steppe landscapes with a high biomass production and high
carrying capacity. Newly available steppe areas could be invaded by herbivores, making them
attractive for nomadic tribes. The central Asian horse-riding Scythian culture expanded, and an
increased population density was a stimulus for westward migration towards southeastern Europe.
The Palau archipelago is a sizeable and geologically diverse set of volcanic and coralline
limestone islands in equatorial western Micronesia. Recent archeological fieldwork, pollen
analyses, and radiocarbon assays have expanded our understanding of more than 3000 years of
culture history in Palau, providing a potentially unique window on the relationship between climate,
environment, human adaptation, and culture change in the tropical western Pacific. Masse et al.
(2006) focus is on the period of AD 12001600, particularly as relates to the transition between the
Medieval Warm Period and the onset of the Little Ice Age. This period encompasses the
establishment of stonework villages throughout the archipelago, and ultimately their abandonment
in the limestone islands. Paleoenvironmental and archeological data, including settlement pattern
analyses, provide mixed but intriguing messages regarding the role of climate in Palauan culture
change. Archeological deposits in Uchularois Cave contain domestic pig, Sus scrofa, large-eyed
bream, Monotaxis grandoculis, parrotfish, Scarus sp., and the humped conch, Strombus gibberulus
gibbosus, that together provide evidence of environmental degradation or overharvesting and the
potential effects of climate change on culture Masse et al. (2006)
Kennett and Kennett (2007) analyse the influence of Holocene marine transgression and climate
change on cultural evolution in southern Mesopotamia. Kennett and Kennett (2007) review the
impact of Holocene marine transgression and climate change and its influence on cultural evolution
in the southern Mesopotamian region. It argues that the critical confluence of eustatic and climatic
changes unique to this circumscribed region favored the emergence of highly centralized, urban-
based states. The processes leading to the emergence of state-level societies in southern
Mesopotamia are multivariate, but Kennett and Kennett (2007) indicate that these developments
should be considered within the context of environmental change. It begins with a review on
postglacial environmental change in southern Mesopotamia. Following this, it presents an account
of state development in southern Mesopotamia. It suggests that in southern Mesopotamia the
cultural changes leading to integrated state-level societies occurred during a 3000 yr period between
the beginning of the Ubaid Period at 8000 cal yr BP and the end of the Uruk Period at about
5000 cal yr BP. This was a dynamic interval of human cultural evolution, a punctuated series of
events, in a long history of human hunting and gathering and early agricultural economies. In this
light, the study concludes by suggesting that state development in southern Mesopotamia resulted
from human responses stimulated, in part, by a particular succession and confluence of
environmental changes unique to this region during the Early and Middle Holocene.
Tibetan culture and livelihoods depend on native plants for medicine, food, grazing, wood, as
well as cash from market sales. The Medicine Mountains (part of the Hengduan Mountains) of the
eastern Himalayas, with tremendous plant diversity derived from steep gradients of both elevation
and precipitation, have traditionally been an important source of Tibetan medicinal plants. Salick et
al. (2009) examine climate change in this area and vegetation patterns influenced by biogeography,
precipitation and elevation (NMS and CCA ordinations of GLORIA plots). The Alpine environment
has the highest plant diversity and most useful plants and is the most susceptible to climate change
with impacts on traditional Tibetan culture and livelihoodsparticularly Tibetan medicine and
herding (Salick et al. 2009).
Kuruppu (2009) argues that fundamental to water management and adaptation planning is the
integration of people's cultural values attached to the assets/resources they control and utilise in
their efforts to adapt to various stresses on water resources. The results from integrating cultural
resources into a Sustainable Livelihoods Framework indicate that people's capacity to diversify is
constrained by cultural processes negotiated in their daily lives that reinforced and reproduced
hardships. Material resources provided personal significance when they were spent on maintaining
social identity, expressed in recent times through the church. Thus fewer resources were available
for pursuing a diversification strategy. Furthermore, power structures in the church delimited
benefits to the individual, depriving people of their freedom to exercise autonomous agency and
achieve personal wellbeing. Kuruppu (2009) demonstrates the significance of religion to adaptation.
Moreover, it highlights the need to consider the relational aspects of assets, in conditioning how
people access and utilise assets in pursuing adaptation strategies (Kuruppu 2009).

1.3.3. Religion

Different religion leaders call on all people and nations to recognise the serious and potentially
irreversible impacts of global warming caused by the anthropogenic emissions of greenhouse gases
and other pollutants, and by changes in forests, wetlands, grasslands, and other land uses.
According to the New Scientist (2007), also religious leaders pray for cold weather to combat
climate change. Leaders from world religions gather in Greenland to show unity on the problem of
global warming and to pray for the planet (the New Scientist 2007). As example, we will present
Vatican and Buddhism point of view regarding climate change.
A Vatican-appointed panel of scientists has reported what climate change experts have been
warning for years: the Earth is getting warmer, glaciers are melting, and urgent measures are
necessary to stem the damage. The scientists called for urgent reduction of carbon dioxide
emissions and reductions in methane and other pollutants that warm the air, and for improved
observation of mountain glaciers to better track their changes. The Pontifical Academy of Sciences,
a Vatican advisory panel appeal to all nations to develop and implement, without delay, effective
and fair policies to reduce the causes and impacts of climate change on communities and
ecosystems, including mountain glaciers and their watersheds, aware that we all live in the same
home (Vatican-appointed 2011). Vatican (Vatican on climate 2011) call on action pales in
comparison to the price the world will pay if we fail to act now: We appeal to all nations to
develop and implement, without delay, effective and fair policies to reduce the causes and impacts
of climate change on communities and ecosystems, including mountain glaciers and their
watersheds, aware that we all live in the same home. By acting now, in the spirit of common but
differentiated responsibility, we accept our duty to one another and to the stewardship of a planet
blessed with the gift of life. We are committed to ensuring that all inhabitants of this planet receive
their daily bread, fresh air to breathe and clean water to drink as we are aware that, if we want
justice and peace, we must protect the habitat that sustains us. The believers among us ask God to
grant us this wish.
Buddhism is not a religion; it is a way of life. It teaches the moral and ethical conduct for the
happiness of oneself and the welfare of the community. The Buddhist doctrines [analyze] human
life and the intrinsic nature of things based on reasoning and rational thinking not based on an
initial act of faith (Mendis 1993).
Firstly, Buddhism proposed that beliefs, values and ethics have a strong influence upon the
behavioral outcomes that are manifest as the driving forces behind environmental pressures.
Although this perspective underplays the role of structural forces that constrain human behavior, the
influence of beliefs and values can be seen to operate via their configuration of goals, wants, needs,
intent and choices. Secondly, a more complete nexus with Buddhism requires an explicit shift in
focus to human welfare as the key objective of both mainstream economic and policy prescriptions,
and the Buddhist way of life (Daniels 2010a).
Buddhism provides an explanation of the fundamental motives and driving forces that induce
climate change. It does this by reference to the nature of the existing belief, value and ethical
systems that set human goals and influence choices which, in turn, encourage behavior directed
towards these goals. Even the initial tenets of Buddhism as laid out in the suttas of the Pali Canon
demonstrate a clear link between human moral systems and impact upon the natural
environment(Sandell 1987).
Also Buddhism highlights the need to carefully examine the actual path and conditions leading
to better well-being, satisfaction or contentment within society. The study of the source and extent
of environmental pressure and impacts is incomplete without an explanation of how material
outcomes affect human welfare. Of course, neo-classical based economic growth models have
always assumed a simple and direct positive relationship between material accumulation, associated
services, and utility or welfare. The fundamental questioning of this relationship is intrinsic in
Buddhist economic approaches (Zadek 1993).
The Second Noble Truth reveals the source of this persistent dissatisfaction or disappointment.
It comes from clinging or attachment to external, worldly phenomena in the belief that they will
bring sustained and consummate satisfaction or happiness (French 2003). These objects of our
desire include not just material goods or assets and the services they provide but people and other
animate beings as well as ideas, social and economic roles, success and status (Webster 2005).
Desire for maximum consumption via material good accumulation, derived services, and
control over people for self-satisfaction, drives economic and lifestyle choices and is the natural
economic (if not the social) outcome of a belief system based on the principle that the external
world is the ultimate source of happiness (Tideman 2001).
Human institutions, technologies and infrastructure that originally developed to satisfy basic
needs have grown to facilitate natural resource consumption for greed, excess and the relentless
grasping for material satisfaction. The accumulation frenzy has required, and resulted in, prodigious
natural resource extraction and global labor force exploitation powered largely by the capabilities
endowed by fossil fuel energy. Extensive biophysical intervention associated with fossil carbon has
led to the looming problems of marked climate change. Given the primacy of interdependence, it
becomes critical to carefully examine the means and implications involved in the pursuit of gains in
well-being. If the process involves high levels of intervention and disturbance from the initiating
source (a characteristic of fossil fuel dependence), then the web of causeeffect relations between
the three realms will have unintended negative consequences for the well-being of the instigators.
This is apparent with the troubling climate change, infrastructural vulnerability, and political
conflict that is now confronting the current carbon-based world economy. Such sensitive
interdependence portends the inherent wisdom of the Buddhist advocacy of the Middle Way with
its careful focus upon moderation and meeting true well-being needs with minimal and non-violent
intervention (Daniels 2010a).
Buddhism makes to explain the double whammy of the past 60 years of spectacular fossil
fuel-based economic growth where happiness levels within nations do not seem to be increasing
(the Easterlin Paradox), and yet resource use and degradation have reached unsustainable and
possibly ecosphere catastrophe levels (Baucells and Sarin 2007, Daniels, 2007). The relentless drive
for the economic extraction and transformation of nature for economic wealth has not had the
anticipated positive impact on subjective well-being. Indeed, craving for material wealth has not
only failed to significantly reduce suffering (increase well-being) but has increased environmental
destruction and instability (Mendis 1993).
Daniels (2010a) examines how central Buddhist world views and themes can contribute to
effectively addressing climate change by looking deep within the ethical, economic and ecological
nature of consumer market economies. A persistent theme of Daniels (2010a) approach is the
structured analysis of climate change in terms of the drivers, pressures, and responses that stem
from societal beliefs and world views about human actions and choices, and their links to human
goals and well-being. Buddhist notions of interconnectedness, dependent origination, and mindful
consumption and production can help explain and reshape human motives and actions for climate
and other forms of environmental sustainability. The mode of analysis of Buddhism has had much
in common with ecological economics with primary conceptual and methodological roles
ascribed to ethics, the ecologization of society, social capital and sustainability, and ultimate means
and ends via an extensive consideration of well-being and the goals of human endeavor (Daniels
2010a).
The maintenance of climatic conditions that support biotic integrity and human life is a critical
aspect of sustainable development. Serious instability in global economic and environmental
spheres calls for an intensive search for new paradigms guiding human understanding, motivation
and action. Daniels (2010) examines how central Buddhist world views and themes can contribute
to effectively addressing climate change and other sustainability problems confronting consumer
economies. Environmental, economic, ethical and cosmological dimensions of Buddhism are
presented as a logical and practical basis for reducing the climate change pressures deriving from
prevailing global modes of production and consumption. Daniels (2010) paper presents an
analytical framework and philosophical base for understanding the causes and refining the goals
behind human and societal endeavor. Buddhist notions of interconnectedness, dependent
origination, and mindful consumption and production can help explain and reshape human motives
and actions for climate and other forms of environmental sustainability (Daniels 2010).
The evidence of impending and serious climate and other consequences of an expanding world
economy based on fossil carbon energy continues to accumulate. Daniels (2010) examines the
potential contribution of the world view and insights of Buddhism to this search. Daniels (2010)
presents both a conceptual and practical case that Buddhism can help shape and move towards an
alternative and effective paradigmatic basis for sustainable economies one capable of bringing
about and maintaining genuine, high welfare levels across the world's societies. Based on the
integration of two of the most influential environmental analysis tools of recent decades (the DPSIR
model and IPAT equation), the framework was then broadened to facilitate ideas from the Buddhist
world view by injecting two key missing aspects the interrelated role of (1) beliefs and values
(on goals and behavior) and (2) the nature of well-being or human happiness. Daniels (2010)
demonstrates how Buddhist and related world views can feed into appropriate and effective
responses to the impending challenges of climate change. This is undertaken by systematically
presenting a specific, if indicative, list of relevant strategies informed by the understanding of
interconnectedness and other basic principles about the nature of reality and human well-being as
proposed in Buddhism (Daniels 2010).

1.3.4. Ethics

The emotional and embodied practice of narrative ethics is offered as one possible response to
the overemphasis on technical rationality within our society and its institutions. Willis (2012)
argues that the development of practical wisdom (phronesis) is essential to addressing issues such as
climate change, which are not simply technical problems but are fundamentally rooted in the human
condition.
Ecoethics is an emerging discipline that trains moral attention and critical reflection on the
vastly expanded range of human productive and consumptive powers that are causing increasing
and perhaps irreparable damage to many of Earths ecosystems and the human communities and
nonhuman species who depend on those ecosystems well-being. Ecoethics ponders the significance
of how the rapidly rising human population is so widely transforming natural ecosystems that
increasing numbers of animal and plant species are being pushed via habitat destruction into
endangerment or extinction. Likewise, ecoethics ponders the fate of both humanity and that of all
other species as it confronts rising worries about anthropogenic or human-caused global warming or
climate-change trends (French 2008).
Climate change raises many questions with strong moral and ethical dimensions that are
important to address in climate-policy formation and international negotiations. Particularly in the
United States, the public discussion of these dimensions is strongly influenced by religious groups
and leaders. Over the past few years, many religious groups have taken positions on climate change,
highlighting its ethical dimensions. Wardekker (2009) aims to explore these ethical dimensions in
the US public debate in relation to public support for climate policies. Wardekker (2009) analyzes
in particular the Christian voices in the US public debate on climate change by typifying the various
discourses. Three narratives emerge from this analysis: conservational stewardship (conserving
the garden of God as it was created), developmental stewardship (turning the wilderness into a
garden as it should become) and developmental preservation (God's creation is good and
changing; progress and preservation should be combined). The different narratives address
fundamental ethical questions, dealing with stewardship and social justice, and they provide proxies
for public perception of climate change in the US. Policy strategies that pay careful attention to the
effects of climate change and climate policy on the poor in developing nations and the US itself
may find support among the US population. Religious framings of climate change resonate with the
electorates of both progressive and conservative politicians and could serve as bridging devices for
bipartisan climate-policy initiatives (Wardekker 2009).

1.3.5. Climate Change, Pollution and Health in Cities

Excess morbidity and mortality related to extremely hot weather and poor air quality are found
in cities worldwide. This is a major public health concern for cities now and looking toward the
future because the interactions of global climate change, urban heat islands, and air pollution are
predicted to place increasing health burdens on cities. The proposed mitigation and adaptation
strategies in cities climate risk management plans may produce health co-benefits by reducing
emissions and cooling temperatures through changes in the built environment. There are challenges,
however, to implementing the plans and the most widely documented beneficial policy to date is the
adoption of heat warning and air quality alert systems to trigger emergency responses (Harlan et al.
2011).
As the largest developing country, China has been changing rapidly over the last three decades
and its economic expansion is largely driven by the use of fossil fuels, which leads to a dramatic
increase in emissions of both ambient air pollutants and greenhouse gases (GHGs). China is now
facing the worst air pollution problem in the world, and is also the largest emitter of carbon dioxide.
A number of epidemiological studies on air pollution and population health have been conducted in
China, using time-series, case-crossover, cross-sectional, cohort, panel or intervention designs. The
increased health risks observed among Chinese population are somewhat lower in magnitude, per
amount of pollution, than the risks found in developed countries. However, the importance of these
increased health risks is greater than that in North America or Europe, because the levels of air
pollution in China are very high in general and Chinese population accounts for more than one
fourth of the world's totals. Meanwhile, evidence is mounting that climate change has already
affected human health directly and indirectly in China, including mortality from extreme weather
events; changes in air and water quality; and changes in the ecology of infectious diseases. If China
acts to reduce the combustion of fossil fuels and the resultant air pollution, it will reap not only the
health benefits associated with improvement of air quality but also the reduced GHG emissions.
Consideration of the health impact of air pollution and climate change can help the Chinese
government move forward towards sustainable development with appropriate urgency (Kan, Chen
and Tong. 2012).
Urban centers in Latin American often face high levels of air pollution as a result of economic
and industrial growth. Decisions with regard to industry, transportation, and development will affect
air pollution and health both in the short term and in the far future through climate change. Bell et
al. (2006) investigated the pollution health consequences of modest changes in fossil fuel use for
three case study cities in Latin American: Mexico City, Mexico; Santiago, Chile; and So Paulo,
Brazil. Annual levels of ozone and particulate matter were estimated from 2000 to 2020 for two
emissions scenarios: (1) business-as-usual based on current emissions patterns and regulatory trends
and (2) a control policy aimed at lowering air pollution emissions. The resulting air pollution levels
were linked to health endpoints through concentrationresponse functions derived from
epidemiological studies, using local studies where available. Results indicate that the air pollution
control policy would have vast health benefits for each of the three cities, averting numerous
adverse health outcomes including over 156,000 deaths, 4 million asthma attacks, 300,000
children's medical visits, and almost 48,000 cases of chronic bronchitis in the three cities over the
20-year period. The economic value of the avoided health impacts is roughly $21 to $165 billion
(US). Sensitivity analysis shows that the control policy yields significant health and economic
benefits even with relaxed assumptions with regard to population growth, pollutant concentrations
for the control policy, concentrationresponse functions, and economic value of health outcomes.
Bell et al. (2006) research demonstrates the health and economic burden from air pollution in Latin
American urban centers and the magnitude of health benefits from control policies (Bell et al.
2006).
The contribution of the road transportation sector to emissions of air pollutants and greenhouse
gases is a growing concern in developing countries. Emission control measures implemented within
this sector can have varying counteracting influences. In the city of Durban, South Africa, the
growing dependence on privately-owned motor vehicles and increasing usage of roads for freight
transport have all resulted in significant air pollution and greenhouse gas emissions. In this study,
an emissions inventory was developed for the road transport sector and was used as a basis to
explore intervention opportunities that are likely to reduce simultaneously, air pollution and
greenhouse gas emissions in this sector. It was found that reducing the vehicle kilometres travelled
by privately-owned motor vehicles and improving the efficiency of road freight transport offered
the greatest potential for achieving co-benefits (Thambiran and Diab 2011).
Bollen et al. (2009) present the findings of a combined cost-benefit analysis of local air
pollution and global climate change, two subjects that are usually studied separately. Yet these
distinct environmental problems are closely related, since they are both driven by the nature of
present energy production and consumption patterns. Bollen et al. (2009) study demonstrates the
mutual relevance of, and interaction between, policies designed to address these two environmental
challenges individually. Given the many dimensions air pollution control and climate change
management have in common, it is surprising that they have only little been analyzed in
combination so far. Bollen et al. (2009) attempt to cover at least part of the existing gap in the
literature by assessing how costs and benefits of technologies and strategies that jointly tackle these
two environmental problems can best be balanced. By using specific technological options that cut
down local air pollution, e.g. related to particulate emissions, one may concurrently reduce CO2
emissions and thus contribute to diminishing global climate change. Inversely, some of the long-
term climate change strategies simultaneously improve the quality of air in the short run. Bollen et
al. (2009) extended the well-established MERGE model by including emissions of particulate
matter, and show that integrated environmental policies generate net global welfare benefits. Bollen
et al. (2009) also demonstrate that the discounted benefits of local air pollution reduction
significantly outweigh those of global climate change mitigation, at least by a factor of 2, but in
most cases of our sensitivity analysis msuch more. Still, Bollen et al. (2009) do not argue to only
restrict energy policy today to what should be our first priority, local air pollution control, and wait
with the reduction of greenhouse gas emissions. Instead, Bollen et al. (2009) propose to design
policies that simultaneously address these issues, as their combination creates an additional climate
change bonus. As such, climate change mitigation proves an ancillary benefit of air pollution
reduction, rather than the other way around (Bollen et al. 2009).

1.3.6. Belief System with an Incorrect Theory of Happiness

Different religions leaders analysed relation of theory of happiness with climate change. As
example, we will present Buddhism point of view.
Much of human activity is directed by this craving and, in secular life, people seem to be
effectively bound by thoughts and actions derived from a belief system with an incorrect theory of
happiness (Ash 2007, Tideman 2001). From the Buddhist world view, a major constraint on better-
functioning economies yielding sustainable happiness is ignorance about the Second Noble Truth
leading to behavior that has negative consequences in accordance with the pervasive and marked
co-dependence amongst all things. As per the 2nd Noble Truth, the lack of knowledge about the
actual path to well-being leads to, in economic terms, a mismatch between actual or observed
preferences, and true preferences. True preferences represent life choices that genuinely enhance
satisfaction (Tomer 1996). This outcome is also consistent with the persistent overestimation of
people's own expected satisfaction gains from increased income and consumption (projection
bias) (Loewenstein et al., 2003).
The prevailing belief within consumer market societies is that the primary directives of life
activity should be directed towards pleasure and usefulness (and hence welfare gains) obtained from
the accumulation and control of stable phenomena of the external world. In contrast, Buddhism
predicts an eternal gap between (1) object-attachment desires and wants, and (2) actual fulfillment
or satisfaction received from biophysical reality. If the belief in potential satisfaction from worldly
phenomena dominates, socioeconomic systems form a treadmill that never delivers the anticipated
results (Daniels 2010a).
There are minimum human needs that must be met to avert physiological deprivation. Market
economies in high-income nations have generally been very successful at achieving this. However,
in the consumer culture that characterizes these economies, the desire to satisfy wants is constantly
created and expanded has become a major motive of people's lives, thoughts and actions. The
proliferation of desire and quest for material super-abundance permeates almost every aspect of
global market societies (Bodhi 1987). The resulting system of craving reproduces itself with
structures that have embedded the want satisfaction capability belief and is replete with actors
who are addicted to an irrational process of striving for short-term satisfaction of dynamic and
endless wants. Consumption becomes an end in itself. A substantial part of the global market
economy is predicated upon and supported by stimulating such desire and maintaining the want-
satisfaction gap (Daniels 2010a).

1.3.7. Easterlin Paradox and Happiness Economics

The Easterlin Paradox is a key concept in happiness economics. It is named for economist and
USC Professor Richard Easterlin who discussed the factors contributing to happiness in the 1974
paper "Does Economic Growth Improve the Human Lot? Some Empirical Evidence." Easterlin
found that within a given country people with higher incomes are more likely to report being happy.
However, in international comparisons, the average reported level of happiness does not vary much
with national income per person, at least for countries with income sufficient to meet basic needs.
Similarly, although income per person rose steadily in the United States between 1946 and 1970,
average reported happiness showed no long-term trend and declined between 1960 and 1970. This
concept was later revived by Andrew Oswald of the University of Warwick in 1997, driving media
interest in the topic. Recent research has utilised many different forms of measuring happiness,
including biological measures, showing similar patterns of results. This goes some way to
answering the problems of self-rated happiness. The implication for government policy is that once
basic needs are met, policy should focus not on economic growth or GDP, but rather on increasing
life satisfaction or Gross national happiness (Wiki).
Despite an unprecedented rate of economic growth, Chinas life satisfaction over the last two
decades has largely followed the trajectory seen in the central and eastern European transition
countriesa decline followed by a recovery, with no change or a declining trend over the period as
a whole. There is no evidence of a marked increase in life satisfaction in China of the magnitude
that might have been expected based on the fourfold increase in the level of per capita consumption
during that period. In its transition, China has shifted from one of the most egalitarian countries in
terms of distribution of life satisfaction to one of the least egalitarian. Life satisfaction has declined
markedly in the lowest-income and least-educated segments of the population, while rising
somewhat in the upper SES stratum (Easterlin 2012).
The time series data on SWB underlying these conclusions are derived from six surveys
conducted by five different survey organizations, and together they show a remarkably consistent
pattern. The similarity of Chinas experience to that of the European transition countries and
particularly its role model under communism, the Soviet Union, lends credence to these results.
Chinas pattern is also consistent with that seen in other high-export countries that are subject to the
vicissitudes of the world economy. It is pertinent to note that Chinas apparently nil trend is
reminiscent of that seen in Japan after its takeoff from a quite low initial level of GDP per capita in
the late 1950s (Easterlin 2010a,b).
Moreover, the life satisfaction pattern in China fits with the historical context. The factors
shaping life satisfaction in China appear to be essentially the same as those in the European
transition countries the emergence and rise of substantial unemployment, dissolution of the social
safety net, and growing income inequality. The failure of Chinas life satisfaction to increase
despite its differing output experiencea rapid increase versus the collapse and recovery of output
in the European countriessuggests that employment and the social safety net are critically
important factors in determining life satisfaction. One may reasonably ask how it is possible for life
satisfaction not to improve in the face of such a marked advance in per capita GDP from a very low
initial level? In answer, it is pertinent to note the growing evidence of the importance of relative
income comparisons and rising material aspirations in China, which tend to negate the effect of
rising income. These findings are consistent with the view common in the happiness literature that
the growth in aspirations induced by rising income undercuts the increase in life satisfaction related
to rising income itself (Easterlin 2012).
Moreover, there is more to life satisfaction than material goods. Other factors include home life
and the need for a secure job to support it, health, friends and relatives, and the like. It is possible
that the lack of a marked uptrend in overall life satisfaction in China might reflect an adverse
impact on life satisfaction of changes in such factors as these, as has been true of the transition
experience of East Germany, for which data on such circumstances are available (Easterlin 2010b).
In policy circles, subjective well-being is receiving increasing attention as a complement or
alternative to GDP per capita as a measure of well-being (Stiglitz, Sen and Fitoussi 2008). There
could hardly be a more dramatic example than China for testing the comparative significance of the
two measures. The GDP measure registers the spectacular average improvement in material living
conditions, whereas the measure of life satisfaction demonstrates that among ordinary people,
especially the less-educated and lower income segments of the population, life satisfaction has
declined noticeably as material aspirations have soared and concerns have arisen about such critical
matters as finding and holding a job, securing reliable and affordable health care, and providing for
children and the elderly. Clearly, life satisfaction is the more comprehensive and meaningful
indicator of peoples life circumstances and well-being.
It would be a mistake to conclude from the life satisfaction experience of China, and the
transition countries more generally, that a return to socialism and the gross inefficiencies of central
planning would be beneficial. However, our data suggest an important policy lesson, that jobs and
job and income security, together with a social safety net, are of critical importance to life
satisfaction. In the last few years, the government of China has begun serious efforts to repair the
social safety net (Vodopivec and Tong 2008, Barnett and Chalk, 2010). These efforts are an
encouraging portent for the future life satisfaction of the Chinese population, particularly for the
least advantaged segments.

1.4. The Cost of Climate Change

1.4.1. The Global Warming Price

The heated argument about economic costs, however, barely touched one vitally important
issue: the costs of NOT taking action on climate. What if last summers Russian heat wave and
drought, which destroyed one third of the countrys wheat crop, or the catastrophic floods in
Pakistan and China, or category 5 hurricanes like Katrina are just glimpses of future havoc from
warming left unchecked? Certain events would have been extremely unlikely to have occurred
without global warming, and that includes the Russian heat wave and wild fires, and the Pakistan,
Chinese, and Indian floods (Carey 2011).
Droughts, floods, wildfires, and hurricanes have already caused multibillion-dollar losses, and
these extreme weather events will likely become more frequent and more devastating as the climate
continues to change. Tourism, agriculture, and other weather-dependent industries will be hit
especially hard, but no one will be exempt. Household budgets, as well as business balance sheets,
will feel the impact of higher energy and water costs. Ruth, Coelho and Karetnikov (2007)
estimates what the United States will pay as a result of four of the most serious impacts of global
warming in a business-as-usual scenariothat is, if we do not take steps to push back against
climate change (Ruth, Coelho and Karetnikov 2007):
- Hurricane damages: $422 billion in economic losses caused by the increasing intensity of
Atlantic and Gulf Coast storms. In the business-as-usual climate future, higher sea-surface
temperatures result in stronger and more damaging hurricanes along the Atlantic and Gulf
coasts. Even with storms of the same intensity, future hurricanes will cause more damage as
higher sea levels exacerbate storm surges, flooding, and erosion. In recent years, hurricane
damages have averaged $12 billion and more than 120 deaths per year. With business-as-
usual emissions, average annual hurricane damages in 2100 will have grown by $422 billion
and an astounding 760 deaths just from climate change impacts.
- Real estate losses: $360 billion in damaged or destroyed residential real estate as a result of
rising sea levels. Our business-as-usual scenario forecasts 23 inches of sea-level rise by
2050 and 45 inches by 2100. If nothing is done to hold back the waves, rising sea levels will
inundate low-lying coastal properties. Even those properties that remain above water will be
more likely to sustain storm damage, as encroachment of the sea allows storm surges to
reach inland areas that were not previously affected. By 2100, U.S. residential real estate
losses will be $360 billion per year.
- Energy costs: $141 billion in increasing energy costs as a result of the rising demand for
energy. As temperatures rise, higher demand for airconditioning and refrigeration across the
country will increase energy costs, and many households and businesses, especially in the
North, that currently dont have air conditioners will purchase them. Only a fraction of these
increased costs will be offset by reduced demand for heat in Northern states.The highest net
energy costsafter taking into consideration savings from lower heating billswill fall on
Southeast and Southwest states. Total costs will add up to more than $200 billion for extra
electricity and new air conditioners, compared with almost $60 billion in reduced heating
costs. The net result is that energy sector costs will be $141 billion higher in 2100 due to
global warming.
- Water costs: $950 billion to provide water to the driest and most water-stressed parts of the
United States as climate change exacerbates drought conditions and disrupts existing
patterns of water supply. The business-as-usual case forecasts less rainfall in much of the
United Statesor, in some states, less rain at the times of year when it is needed most. By
2100, providing the water we need throughout the country will cost an estimated $950
billion more per year as a result of climate change. Drought conditions, already a problem in
Western states and in the Southeast, will become more frequent and more severe.
The Global Warming Price Tag in Four Impact Areas (2025 through 2100) is presented in Table
1.1.

Table 1.1. The Global Warming Price Tag in Four Impact Areas, 2025 through 2100 (Ackerman
and Stanton 2008)


As example, we shortly analyse the global warming price tag in two impact areas: real estate,
water supply and the agriculture industry on basis of United States experience.

1.4.2. Real Estate Losses as a Result of Sea Level Rise

The effects of climate change will have severe consequences for low-lying U.S. coastal real
estate. If nothing is done to hold back rising waters, sea-level rise will simply cause many properties
in low-lying coastal areas to be inundated. Even those properties that remain above water will be
more likely to sustain storm damage, as encroachment of the sea allows storm surges to reach
inland areas that were not previously affected. More intense hurricanes, in addition to sea-level rise,
will increase the likelihood of both flood and wind damage to properties throughout the Atlantic
and Gulf coasts. To estimate the value of real estate losses from sea-level rise, we have updated a
detailed forecast of coastal real estate losses in the 48 states developed by the Environmental
Protection Agency (EPA). In projecting these costs into the future Ackerman and Stanton (2008)
assume that annual costs will be proportional to sea-level rise and to projected GDP. Ackerman and
Stanton (2008) calculate the annual loss of real estate from inundation due to the projected sea-level
rise, which reaches 45 inches by 2100 in the business-as-usual case. These losses amount to $360
billion by 2100, or 0.35 percent of GDP, as shown in Table 1.2 (Ackerman and Stanton 2008).


Table 1.2. Business-as-Usual Scenario: Increase in U.S. Real Estate at Risk From Sea-Level Rise
(Ackerman and Stanton 2008)


No one expects coastal property owners to wait passively for these damages to occur; those who
can afford to protect their properties will undoubtedly do so. But all the available methods for
protection against sea-level rise are problematic and expensive. It is difficult to imagine any of them
being used on a large enough scale to shelter all low-lying U.S. coastal lands that are at risk under
the business-as-usual case. Elevating homes and other structures is one way to reduce the risk of
flooding, if not hurricane-induced wind damage. A Federal Emergency Management Agency
(FEMA) estimate of the cost of elevating a frame construction house on a slab-on-grade foundation
by two feet is $58 per square foot, with an added cost of $0.93 per square foot for each additional
foot of elevation (FEMA 1998). This means that it would cost $58,000 to elevate a house with a
1,000-square-foot footprint by two feet. It is not clear whether building elevation is applicable to
multistory structures; at the least, it is sure to be more expensive and difficult (Ackerman and
Stanton 2008).
Another strategy for protecting real estate from climate change is to build seawalls to hold back
rising waters. There are a number of ecological costs associated with building walls to hold back the
sea, including accelerated beach erosion; disruption of nesting and breeding grounds for important
species, such as sea turtles; and prevention of the migration of displaced wetland species. In order to
prevent flooding in developed areas, some parts of the coast would require the installation of new
seawalls. Estimates for building or retrofitting seawalls range from $2 million to $20 million per
linear mile (Reeves 2007). While adaptation, including measures to protect the most valuable real
estate, will undoubtedly reduce sealevel rise damages below the amounts shown in Table 1.2,
protection measures are expensive, and there is no single, believable technology or strategy for
protecting vulnerable areas throughout the country. The high cost of adapting to sea-level rise
underscores the need to act early to prevent the worst impacts of global warming (Ackerman and
Stanton 2008).
Florida is at particular risk for damages caused by a rise in sea level as a result of global
warming. In the business-as-usual scenario, the annual increase in Floridas residential property at
risk from sea-level rise reaches $66 billion by 2100, or nearly 20 percent of total U.S. damages.
Sea-level rise will affect more than just residential property. In Florida, 9 percent of the state is
vulnerable to 27 inches of sea-level rise, which would be reached soon after 2060 in the business-
as-usual case. Some 1.5 million people currently live in the affected region. In addition to
residential properties, worth $130 billion, Floridas 27-inch vulnerable zone includes: 334 public
schools; 82 low-income housing complexes; 68 hospitals; 37 nursing homes; 171 assisted living
facilities; 1,025 churches, synagogues, and mosques; 341 hazardous materials sites, including 5
superfund sites; 2 nuclear reactors; 3 prisons; 74 airports; 115 solid waste disposal sites; 140 water
treatment facilities; 247 gas stations; 277 shopping centers; 1,362 hotels, motels, and inns; and
19,684 historic structures. Similar facilities will be at risk in other states with intensive coastal
development as sea levels rise in the business-as-usual case (Ackerman and Stanton 2008).

1.4.3. Water Supply and the Agriculture Industry

In many parts of the country, the most important impact of climate change during the 21st
century will be its effect on the supply of water. Recent droughts in the Southeast and in the West
have underscored our dependence on the fluctuating natural supply of freshwater. With five out of
every six gallons of water used in the United States consumed by agriculture, any changes in water
supply will quickly ripple through the nations farms as well. Surprisingly, studies from the 1990s
often projected that the early stages of warming would boost crop yields. Climate change threatens
to damage American agriculture, with drier conditions in many areas and greater variability and
extreme events everywhere. Agriculture is the nations leading use of water, and the U.S.
agricultural sector is shaped by active water management: nearly half of the value of all crops
comes from the 16 percent of U.S. farm acreage that is irrigated (U.S. Department of Agriculture
2004). Especially in the West, any major shortfall of water will be translated into a decline in food
production. As one of the economic activities most directly exposed to the changing climate,
agriculture has been a focal point of research on climate impacts, with frequent claims of climate
benefits, especially in temperate regions like much of the United States (Ackerman and Stanton
2008).
The initial stages of climate change appear to be beneficial to farmers in the northern states. In
the colder parts of the country, warmer average temperatures mean longer growing seasons.
Moreover, plants grow by absorbing carbon dioxide from the atmosphere; so the rising level of
carbon dioxide, which is harmful in other respects, could act as a fertilizer and increase yields. A
few plant species, notably corn, sorghum, and sugarcane, are already so efficient in absorbing
carbon dioxide that they would not benefit from more, but for all other major crops, more carbon
could allow more growth. Early studies of climate costs and benefits estimated substantial gains to
agriculture from the rise in temperatures and carbon dioxide levels (Ackerman and Stanton 2008).

Table 1.3. Business-as-Usual Scenario: Increases in U.S. Water Costs Compared With 2005 Levels
(Ackerman and Stanton 2008)


The passage of time will also eliminate any climate benefits to agriculture. Once the
temperature increase reaches 6 degrees Fahrenheit, crop yields everywhere will be lowered by
climate change. Under the business-asusual scenario, that temperature threshold is reached by mid-
century. Even before that point, warmer conditions may allow tropical pests and diseases to move
farther north, reducing farm yields. And the increasing variability of temperature and precipitation
that will accompany climate change will be harmful to most or all crops (Rosenzweig et al. 2002).
One recent study examined the relationship between the market value of U.S. farmland and its
current climate; the value of the land reflects the value of what it can produce. For the area east of
the 100th meridian, where irrigation is rare, the value of an acre of farmland is closely linked to
temperature and precipitation (Schlenker, Hanemann, and Fisher 2006). Land value is maximized
meaning that conditions for agricultural productivity are idealwith temperatures during the
growing season, April through September, close to the late-20th-century average, and rainfall
during the growing season of 31 inches per year, well above the historical average of 23 inches
(Schlenker, Hanemann and Fisher 2006). If this relationship remained unchanged, then becoming
warmer would increase land values only in areas that are colder than average; becoming drier would
decrease land values almost everywhere. For the years 2070 to 2099, Ackerman and Stanton (2008)
projected that the average value of farmland would fall by 62 percent under the IPCCs A2
scenario, the basis for our business-as-usual case. The climate variable most strongly connected to
the decline in value was the greater number of days above 93 degrees Fahrenheit, a temperature that
is bad for virtually all crops. The same researchers also studied the value of farmland in California,
finding that the most important factor there was the amount of water used for irrigation; temperature
and precipitation were much less important in California than in eastern and midwestern agriculture
(Schlenker, Hanemann and Fisher 2006).
It is difficult to project a monetary impact of climate change on agriculture; if food becomes
less abundant, prices will rise, partially or wholly offsetting farmers losses from decreased yields.
This is also an area where assumptions about adaptation to changing climatic conditions are of great
importance: The more rapid and skillful the adaptation, the smaller the losses will be. It appears
likely, however, that under the business-as-usual scenario, the first half of this century will see
either little change or a small climate-related increase in yields from non-irrigated agriculture;
irrigated areas will be able to match this performance if sufficient water is available. By the second
half of the century, as temperature increases move beyond 6 degrees Fahrenheit, yields will drop
everywhere (Ackerman and Stanton 2008).
In a broader global perspective, the United States, for all its problems, will be one of the
fortunate countries. Tropical agriculture will suffer declining yields at once, as many crops are
already near the top of their sustainable temperature ranges. At the same time, the worlds
population will grow from an estimated 6.6 billion today to 9 billion or more by mid-centurywith
a large portion of the growth occurring in tropical countries. The growing, or at least non-declining,
crop yields in temperate agriculture over the next few decades will be a valuable, scarce global
resource. The major producing regions of temperate agriculturethe United States, Canada,
northern China, Russia, and northern Europe, along with Argentina, Chile, Australia, New Zealand,
and South Africawill have an expanded share of the worlds capacity to grow food, while
populations are increasing fastest in tropical countries where crop yields will be falling. The
challenge of agriculture in the years ahead will be to develop economic and political mechanisms
that allow us to use our farm resources to feed the hungry worldwide. At the same time, while we
may fare better than other nations, climate change threatens to damage American agriculture, with
drier conditions in many areas and greater variability and extreme events everywhere (Ackerman
and Stanton 2008).

1.4.4. Debates

Theres a deeply rooted perception that the U.S. economy will suffer little damage from climate
change. That view dates back to work from the mid-1990s by the influential Yale University
economist William Nordhaus. Nordhaus took what was known about the science of climate change,
then constructed an economic model to estimate the monetary harm. The model put the economic
cost to the U.S. of raising global temperatures by 2.5 to 3 degrees C (expected by about 2100) at
about to percent of GDP. The original economic model wasnt complete, it didnt include some
sectors of the economy or non-market damages effects that economists cant easily quantify,
such as loss of species. Other experts see the hit to GDP as much greater. An earlier version of this
debate flared into public view and the media for a short time in 2006. A report prepared for the
British government by economist Sir Nicholas Stern found that the cost of unconstrained global
warming would be huge up to a 20 percent drop per year in the worlds GDP by 2050. The
widely disparate conclusion compared to Nordhaus, however, turned largely on one single factor:
Stern put a higher value on costs far out in the future and on the future return from climate
change reduction investments made today than Nordhaus did. Or in economists jargon, he used
a lower discount rate. You can change the discount rate and get a totally different answer. Whos
right (Carey 2011)?
There are now new critiques of the low estimates of the costs of climate change that challenge
core details of how those damages were calculated, such as whether the analyses correctly included
the costs of heat waves, more intense hurricanes, and other extreme events predicted to become
more common. One issue cited by the critics is that the models assume that many of the costs of
climate change in the U.S. are balanced by benefits or that it will be easy to adapt. For instance,
heat waves in summer mean higher energy costs and more deaths from heat. However, warmer
winters save fuel and lives, so in the economic models, the two generally balance out.
The critics say these conclusions are far too optimistic. Hanemann points out that summer air
conditioning requires expensive daytime peak power, while the winter savings come from much
cheaper nighttime baseload. The damages grow much worse as we get more extreme events power.
So the overall costs must be higher. Similarly, damages to agriculture from heat waves and droughts
are likely to swamp benefits from milder winters and longer growing seasons and moving crops
to better climes may be costly or difficult (Carey 2011).
The models also calculate future harms using predicted average increases in temperature or
precipitation. But scientists dont believe temperatures and precipitation will be uniformly average
around the planet. Instead, they foresee more and more severe extreme events: more powerful
hurricanes and storms, record floods, searing heat waves and droughts, bigger wildfires. In fact, the
U.S. has already experienced a higher-than-average amount of warming. A graph showing these
events would not only have a long tail (i.e. the events are more extreme), but the tail would also be
fatter (i.e. more events). Critics say thats a serious flaw. Many, many of the costs associated with
climate change are not included in the models, says NYUs Livermore. Additional examples
include acidification of the oceans from the absorption of carbon dioxide, which could threaten
ocean food chains; loss of glaciers, which could cause water shortages and reduce hydropower; sea
level rise, which could flood coastal cities; and mass migrations and increased global tensions, as
people move away from regions hit harder by of the effects of climate change. The military takes
these possibilities seriously, noting that climate change is a threat multiplier (Carey 2011).
Harvard economist Martin Weitzman even suggests that the economic costs of a catastrophic
event, however unlikely it might be, would be so enormous that it would overwhelm the whole
analysis. Perhaps in the end the climate-change economist can help most by not presenting a cost-
benet estimate for what is inherently a fat-tailed situation with potentially unlimited downside
exposure, he writes. True, the models dont include all possible costs or catastrophes, Nordhaus
and Mendelsohn respond. For one thing, the models calculate the damages from climate change
only in terms of economic activity. They dont assess damages from non-market effects like loss of
species. Take ocean acidification, which makes climate change more worrisome than it appeared to
be in the 1990s, Nordhaus says. The direct economic damages from acidification are negligible.
We know the actual economic impacts are almost sure to be small because they involve fisheries,
which are already pretty small, and they involve only ocean fisheries that are sensitive to carbon,
Nordhaus says (Carey 2011).
The U.S. Environmental Protection Agency (EPA) is expected to conclude that inaction is
costly. With climate legislation apparently dead, regulation under the Clean Air Act is the only
remaining pathway to federal curbs on greenhouse gases. To bolster its case in the face of strong
opposition, the agency is working on a more detailed analysis of the costs and benefits of
regulation, sources say. Past Administration efforts to assess the economic toll used Nordhaus
basic approach. But because of the limitations of the economic models, the agency is also planning
to examine scenarios of possible climate change, and expects that it will find a large economic toll.
We think the costs of not acting will be huge, says one EPA official (Carey 2011).










1.5. Model for a Complex Analysis of a Passive House Life Cycle

1.5.1. Impact of Climate Change on Energy Use in the Built Environment

This Section was developed by using Li et al. (2012) paper Impact of climate change on
energy use in the built environment in different climate zones.
Work on the subtropical climates had revealed an increasing trend of temperature and summer
discomfort over the past decades and it was found that the anticipated temperature rise could result
in more cooling demand. More electricity use for air conditioning would lead to larger emissions,
which in turn would exacerbate climate change and global warming. Even in regions with severe
cold climates where the decrease in heating energy use could, in terms of final or delivered energy,
outweigh the increase in cooling, the impact of climate change on the overall primary energy
requirement and the environment would remain uncertain. This is because heating is usually
provided by oil- or gas-fired boiler plants whereas cooling relies on electricity-driven chillers
(except gas-fired absorption systems). In terms of carbon footprint, electricity tends to have a much
lower overall efficiency and higher CO
2
emissions per unit energy consumption. From a nationwide
energy and environmental perspective, it is important to be able to estimate the magnitude of the
likely changes in heating and cooling energy requirements due to climate change in different
climate zones. Broadly speaking, there are two main approaches (Li et al. 2012):
- degree-days method, and
- building energy simulation technique.


1.5.1.1. Degree-days method

The degree-days concept is widely used for measuring the influence of climate on heating and
cooling requirements. Hekkenberg et al. (2009) argues that socio-economic changes may alter the
temperature dependence pattern of energy demand in future years. However, to a good
approximation heating and cooling energy requirements can be assumed to be proportional to the
HDDs and CDDs, respectively. In recent years, this method has been used to assess the impact of
climate change on regional energy demand as well as energy consumption in the built environment
in different parts of the world. Studies conducted in the US, Europe and Asia will be highlighted as
follows (a summary of the key points is shown in Table 1.4) (Li et al. 2012).

Table 1.4. Summary of studies adopting degree-days method (Li et al. 2012)



Europe

Christenson et al. (2006) assessed the impact of climate warming on building energy demand in
Switzerland using the degree-days method. Past trends were determined from temperature data for
the period of 19012003. The future trends in the 21st century was estimated based on 41 regional
climate change scenarios derived from 35 simulations with eight global climate models. They found
that weather data currently used for building design would increasingly lead to an overestimation of
heating and underestimation of cooling demand in buildings and, therefore, require periodic
adaptation. Greater attention should be paid in future to the summer thermal behaviour of buildings.
Pilli-Sihvola et al. (2010) chose five countries along the north-south gradient: Finland, Germany,
Netherland, France and Spain. Their main findings were: in central and north Europe the decrease
in heating due to climate warming would dominate, and in southern Europe climate warming and
the consequential increase in cooling and electricity demand would outweigh the decreasing need
for space heating. Based on six scenarios, Day et al. (2009) analysed the CDDs and reported that, if
left unchecked, the increase in energy consumption due to the growth in active cooling systems in
London would lead to a doubling of CO
2
emissions by 2030. The growth would be due to increase
in the building stock, greater penetration of cooling systems and warmer climates. Across in the
southern Mediterranean region, Cartalis et al. (2001) studied the changes in the HDDs and CDDs
and found reduction in heating and increase in cooling requirements, while Mirasgedis et al. (2006;
2007) used HDDs and CDDs to account for the weather influences in their forecast of mid-term
electricity demand in Greece, and estimated an increase of 3.65.5% in the annual electricity
demand attributable solely to climate change in the 21st century under different emissions scenarios
(Li et al. 2012).

Asia

Lee and Levermore (2010) used predictions from the HadCM3 general circulation model to assess
the changes in degree-days and hence the impacts of climate change on building energy demand in
two cities in South Korea: Seoul and Ulsan. They found a tremendous increase in CDDs which
would result in a substantial rise in energy consumption and CO
2
emissions due to air conditioning.
Lam et al. (2010) studied the underlying trends of HDDs and CDDs in the nine climate zones and
sub-zones within China in the 20th and 21st centuries. It was found that all the nine climate zones
displayed distinct decreasing trends in the HDDs and increasing trends in the CDDs. Reductions in
HDDs would result in less winter heating and increases in CDDs would lead to more cooling
requirement. In the severe cold climate zones reduction in heating requirement would most likely
outweigh the modest increase in summer cooling. In the hot summer and cold winter climate zones
where both winter heating and summer cooling requirements are important, the magnitude of
reduction in heating and the magnitude of increase in cooling could be comparable, and the overall
impact could be either positive or negative. The most significant impact on energy use in the built
environment would occur in the hot summer and warm winter climate zone where building energy
use is dominated by cooling requirement. This would result in a shift towards more electrical
demand. While the degree-days technique could describe the temperature dependence pattern of
energy demand in a U shape fashion and give a good indication of the likely heating and cooling
requirements, Hekkenberg et al. (2009) argued in favour of dynamically modelling several key
parameters and using direct meteorological variables instead of degree-days. Earlier work by Scott
et al. (1994) using the DOE-2 building energy model on a prototype commercial building had also
found that while the effect of climate change on heating energy use was largely linear, cooling
energy use was nonlinear to temperature because the dynamic interactions between latent and
sensible heat gains was strongly influenced by the humidity (Li et al. 2012).



1.5.1.2. Building energy simulation technique

There had been a number of studies on the impact of climate change on the built environment
using sophisticated building energy simulation tools to perform hour-by-hour computation of the
heating/cooling loads and corresponding energy use. Building energy simulation is an acceptable
technique for assessing the dynamic interactions between the external climates, the building
envelope and the HVAC system and the corresponding energy consumption. It has played an
important role in the development of simple design tools and building energy efficiency codes. This
technique has also been used by a number of researchers to assess the impact of climate change on
energy use in buildings. Review of these studies in Australia, the US, Europe and Asia (including
the Middle East) are presented as follows (a summary of the key points is shown in Table 1.5) (Li et
al. 2012).

Table 1.5. Summary of studies using building energy simulation technique (Li et al. 2012)


Europe

Synthetic meteorological TRYs based on statistical and stochastic models were assembled by
Aguiar et al. (2002) for hourly energy simulation of Portuguese buildings. Both the base and
enhanced greenhouse effect scenarios were considered. A shortening of the heating season and an
extension of the cooling were observed. The reduction in heating energy use was smaller than the
increase in the cooling requirement, resulting in an overall increase in the energy demand for space
conditioning in Portugal by the end of the 21st century. The large increase in cooling thermal loads
would be in the order of 500880 kWh per household per year in the residential sector and 19
24 kWh/m
2
for offices. In Switzerland, Frank (2005) investigated the potential impact of climate
change on heating and cooling energy consumption. Four climate scenarios (WMO normals, IEA
design reference, average reference and warm reference) were considered for the Zurich-Kloten
location, representative of the climatic situation in the Swiss Central Plateau for the period 2050
2100. It was found that the annual cooling energy demand for office buildings with internal heat
gains of 2030 W/m
2
would increase by 2231050% while the heating energy demand would
decrease by 3658%. Potential mitigation measures to reduce the need for cooling plant included
passive designs involving efficient solar shading and night ventilation strategies (Li et al. 2012).
More recently in UK, Gaterell and McEvoy (2005) assessed the impact of projected climate
changes on the thermal performance of the built environment and the measures implemented to
improve such performance. A thermal model of a case study house was developed to simulate the
impact of different insulation measures on the heat demand profile. The UKCIP02 (Hulme et al.,
2002) low and high emissions scenarios in 2050 were considered and compared with the 2003
situation. Results from their thermal analysis highlighted the sensitivity of different insulation
measures to alternative climate scenarios. They reported that while double glazing offered good
energy savings, its energy performance would be more adversely affected under the high emissions
climate scenario, whereas other measures such as loft insulation would be less sensitive to climate
change. Using the morphing technique to stretch and shift existing TRY and design summer year
to produce hourly weather data for simulation of the thermal and energy performance of buildings,
Holmes and Hacker (2007) and Belcher et al. (2005) (CIBSE TM36, 2005) addressed the dual
challenges of designing sustainable low-energy buildings while still providing thermal comfort
under warmer summer conditions. Four case studies were considered: one school (natural
ventilation) and three office buildings (mixed-mode with a low-energy cooling system using
adiabatic cooling, high mass and advanced intelligently controlled natural ventilation). The
predictions indicated that high mass buildings were capable of providing a higher quality of internal
environment. That, however, could not be achieved without due attention to all the principles of
low-energy and sustainable design, including proper appeal to the present-day and likely future
climatic context of the locations. Jentsch et al. (2008) simulated a case study building to highlight
the potential impact of climate change on the future summer overheating hours inside naturally
ventilated buildings. They stated that free-running buildings might be difficult to keep comfortable
without taking appropriate measures such as external shading, use of thermal mass and a well
designed ventilation strategy (e.g. night cooling), which would only work if the buildings were
managed appropriately with proper occupant feedbacks and interactions. De Wilde et al. (2008) (De
Wilde, Tian, 2010) studied the uncertainties in predicting the impact of climate change on the
thermal performance of domestic and office buildings. For a terraced house, the uncertainty
remained large, at 60% or more. They reported that selection of performance metrics and
assumptions made when modelling a building for climate change impact assessment were complex
and tended to have a direct influence over the uncertainty. For office buildings, the sensitivity
analysis indicated that the internal heat gains due to lighting and equipment would be the dominant
factors for the uncertainty in future carbon emissions. Reductions in these internal heat gains could
be used to drive a reduction in carbon emissions. Likewise, Collins et al. (2010) estimated the
impact of climate change on the future energy consumption in the UK housing stock at four weather
data locations: Cardiff, Edinburgh, London and Manchester and for seven housing types: end-
terrace, mid-terrace, semi-detached, detached, converted apartment, purpose-built apartment and
temporary/unknown. It was found that the UK carbon emissions from space conditioning in
dwellings would decrease 10% by 2050. Reduction in CO
2
emissions from gas could offset the
increases in electricity use (Li et al. 2012).

Asia (including Middle East)

The air temperatures were raised by 1.6 C and 2.9 C to reflect the climate in 2050, and by
2.3 C and 5.9 C in 2100 in a study by Radhi (2009) to investigate the potential impact of global
warming on residential buildings in United Arab Emirates. It was concluded that global warming
was likely to increase the energy used for cooling by 23.5% with a 5.9 C increase in the ambient
temperature. It was also found that energy design measures such as thermal insulation and building
thermal mass were important to cope with global warming. In subtropical Hong Kong, Wong et al.
(2010) used the overall thermal transfer value (OTTV) approach to estimate the impact of climate
change on thermal performance of the building envelope. It was found that cooling loads could
increase by 12.321.6%. Mitigation measures suggested included raising the summer set point
temperature (SST), double glazing and wall thermal insulation. Wan et al. (2011; 2012) developed a
hybrid approach (involving principal component analysis, multi-year dynamic building energy
simulations using historical measured hourly weather data and regression models) to assess the
future office building energy use in five major cities across China during the 21st century: Harbin
(severe cold), Beijing (cold), Shanghai (hot summer and cold winter), Kunming (mild) and Hong
Kong (hot summer and warm winter). The dry-bulb temperature and the wet-bulb temperature
showed a clear increasing trend, but not the global solar radiation. Similar observations were
reported for the other three cities. Those observations appeared to be consistent with findings from
investigation work on cloud cover, solar radiation and climate changes in the US (Coke et al.
(1999), Hong Kong (Lam (2006)) and Australia (Guan (2007)). A decreasing trend of heating load
and an increasing trend of cooling load due to climate change in future years were observed.
Estimated increase in cooling loads was 11.424.2%, and reduction in heating loads 13.855.7%. In
severe cold Harbin (heating-dominated) in the north reduction in heating energy use outweighed the
increase in cooling, and vice versa in subtropical Hong Kong (cooling-dominated) in the south. In
Beijing and Shanghai where both the heating and cooling requirements were significant and
comparable in magnitude, there would only be marginal increase in the total building energy use in
the 21st century. It was found that raising the indoor design condition by 12 C could result in
significant energy savings and have great mitigation potential. Li et al. (2012) have reviewed a
number of relevant studies on the impact of climate change on energy use in the built environment
in different parts of the world. The conclusions are (Li et al. 2012):
- In the severe cold climates, reduction in heating requirement would most likely outweigh the
modest increase in summer cooling. In the hot summer and cold winter climate zone where
both winter heating and summer cooling requirements are important, the magnitude of
reduction in heating and the magnitude of increase in cooling could be comparable. But for
non-domestic buildings with large internal heat gains (e.g. people, electric lighting and
equipment) where the annual cooling load tends to larger than the heating load, the overall
impact would certainly be an increase in the total building energy use. The most significant
adverse impact on energy use in the built environment would occur in the hot summer and
warm winter climate zone where building energy use is dominated by cooling requirement.
- An increase in temperature has varying impacts on the electricity demand depending on the
geographical spread of the major climate zones and the prevailing role of electrical power
for heating and cooling purposes. From a nationwide perspective, this could have significant
implications for the energy and environmental policy. Space heating is provided largely by
oil- or gas-fired boiler plants, whereas space cooling mainly relies on electricity. There
would certainly be a shift towards electrical power demand. More work is required
especially on the costs of changing electricity demand and carbon emissions from different
fuel mix (including the role of renewable energy sources) in the energy sector to cater for
the likely impact of climate change on the energy use in the built environment. Among the
renewables for building applications, solar-powered cooling is particularly attractive
because building peak cooling load and maximum solar intensity tend to occur at about the
same time during the day.
- For non-domestic buildings with large internal loads (except severe cold climates), reducing
the lighting load density would have great energy savings and hence mitigation potential.
More work is required on the dynamic interactions between the building, its building
services system and the indoor and outdoor conditions using predicted hourly weather data
from general and/or regional circulation models.
- Raising the summer set point temperature would be an effective energy conservation
measure in mitigating the impact of climate change on the summer cooling energy
consumption. This can be readily applied to both existing and new buildings. However,
more work on the adoption of adaptive thermal comfort in the current building design
guidelines and energy codes is required. This will involve, among other issues, field studies
of thermal comfort and the socio-economic aspects of building occupant behaviour.




1.5.2. Life cycle energy analysis

Buildings demand energy in their life cycle right from its construction to demolition. Studies on
the total energy use during the life cycle are desirable to identify phases of largest energy use and to
develop strategies for its reduction. Ramesha, Prakasha and Shuklab (2009) presented a critical
review of the life cycle energy analyses of buildings resulting from 73 cases across 13 countries.
The study includes both residential and office buildings. Results show that operating (8090%) and
embodied (1020%) phases of energy use are significant contributors to building's life cycle energy
demand. Life cycle energy (primary) requirement of conventional residential buildings falls in the
range of 150400 kWh/m
2
per year and that of office buildings in the range of 250550 kWh/m
2
per
year. Building's life cycle energy demand can be reduced by reducing its operating energy
significantly through use of passive and active technologies even if it leads to a slight increase in
embodied energy. However, an excessive use of passive and active features in a building may be
counterproductive. It is observed that low energy buildings perform better than self-sufficient (zero
operating energy) buildings in the life cycle context. Worldwide, 3040% of all primary energy is
used for buildings and they are held responsible for 4050% of green house gas emissions. It is
therefore essential for the building construction industry to achieve sustainable development in the
society. Sustainable development is viewed as development with low environmental impact, and
high economical and social gains. To achieve the goals of sustainability it is required to adopt a
multi-disciplinary approach covering a number of features such as energy saving, improved use of
materials including water, reuse and recycling of materials and emissions control. Life cycle energy
analysis of buildings assumes greater significance for formulating strategies to achieve reduction in
primary energy use of the buildings and control emissions (Ramesha, Prakasha and Shuklab 2009).

Table 1.6. Data sources for life cycle analysis (Ramesha, Prakasha and Shuklab 2009)


Life cycle energy analysis is an approach that accounts for all energy inputs to a building in its
life cycle. The system boundaries of this analysis) include the energy use of the following phases:
manufacture, use, and demolition. Manufacture phase includes manufacturing and transportation of
building materials and technical installations used in erection and renovation of the buildings.
Operation phase encompasses all activities related to the use of the buildings, over its life span.
These activities include maintaining comfort condition inside the buildings, water use and powering
appliances. Finally, demolition phase includes destruction of the building and transportation of
dismantled materials to landfill sites and/or recycling plants. Table 1.6 shows an abstract of data
sources adopted by different authors to evaluate life cycle analysis of buildings (Ramesha, Prakasha
and Shuklab 2009).
A large variety of materials are being used in building construction. Some of them may have a
life span less than that of the building. As a result, they are replaced to rehabilitate the building. In
addition to this, buildings require some regular annual maintenance. The energy incurred for such
repair and replacement (rehabilitation) needs to be accounted during the entire life of the buildings.
It is the energy required for maintaining comfort conditions and day-to-day maintenance of the
buildings. It is the energy for HVAC (heating, ventilation and air conditioning), domestic hot water,
lighting, and for running appliances. Operational energy largely varies on the level of comfort
required, climatic conditions and operating schedules. At the end of buildings service life, energy
is required to demolish the building and transporting the waste material to landfill sites and/or
recycling plants (Ramesha, Prakasha and Shuklab 2009).
On the basis of above information (Sections 5.1 and 5.2), we can state that development of
passive houses can be a rational option for climate change mitigation. The last Section in this
Chapter will be devoted for the passive houses.

1.5.3. Model for a Complex Analysis of a Passive House Life Cycle

In order to design and realize a high-quality project, it is necessary to take care of its efficiency
from the brief to the end of service life. The entire process must be planned and executed with
consideration of goals aspired by participating stakeholders and micro and macro level
environment. In order to realize the above purposes an original Model of a complex analysis of a
passive house life cycle (see Fig. 1.2) was developed enabling to analyze a passive house life cycle,
the parties involved in the project as well as its micro and macro environment as one complete
entity.

A model for a complex analysis of a passive house life cycle was being developed step by step
as follows (see Fig. 1.2):
a comprehensive quantitative and conceptual description of a research object,
multivariant design of life cycle of a passive house,
multple criteria analysis of life cycle of a passive house,
selection of the most rational version of life cycle of a passive house,
development of rational micro and macro level environment.
The above model will be now described in more detail.
For more comprehensive study of a research object and methods and ways of its assessment
major constituent parts of the above object will be briefly analyzed. They are as follows: a passive
house life cycle, the parties involved in the project development and micro and macro environment
having a particular impact on it.




























A research object

Micro and macro level environment


Brief Design

Utilization
Clients
Users
Designers

Contractors
Life cycle of a passive house
Finansing institutions

Facilities management
organizations

State and state organisations


Micro and macro level environment

Multivariant design of life cycle of a passive house

Multple criteria analysis of life cycle of a passive house

Selection of the most rational version of life cycle of a passive house

Development of rational micro and macro level environment


Determination of rational processes and
their constituents parts
Brief Design

Utilization
Realization of purposes of stakeholders
(clients, users, designers, economists,
contractors, maintenance engineers, passive
house material manufacturers, suppliers,
contractors, finansing institutions, local
government, state and state organisations)
involved in the life cycle of a passive house

Rational life cycle of a
passive house


Development of rational micro and macro level environment


Fig. 1.2. A model for a complex analysis of a passive house life cycle

A passive house life cycle in turn consists of seven closely interrelated stages, such as brief,
design, construction, maintenance, facilities management, demolition and utilisation.
At the stage of brief the client and designers state major requirements and limitations regarding
the passive house in question.
A passive house is being designed with account of the clients needs as well as the possibilities
of designers, constructors, suppliers, facilities managers, etc. At the design stage passive house life
cycle multivariant design and multiple criteria analysis should be carried out taking into account the
experience gained in realizing similar projects and seeking to harmonize the activities of various
stakeholders. At a design stage, the strategy and means of its realization related to passive house
maintenance and facilities management should be defined. These should ensure that maintenance
and facilities management problems are continually dealt with, starting from the brief stage.
A passive house life cycle may have a lot of alternative versions. These variants are based on
the alternative brief, design, construction, maintenance and facilities management processes and
their constituent parts. The above solutions and processes may be further considered in more detail.
For instance, the alternative passive house variants may be developed by varying its three-
dimensional planning, as well as structural and engineering solutions. Thus, dozens of thousands of
passive house life cycle alternative versions can be obtained.

Possible brief
versions
Possible design
versions

Possible
utilisation
versions














Fig. 1.3. Development of possible passive house life cycle versions and relationship of its various
stages

In working out the project the lay-out, elevations, sectional views were used to determine
possible versions of structural (passive house structures and materials) and utilities (heating,
ventilation, water supply, sewerage, etc.) systems. The same relationship is found between the brief,
design, construction, maintenance, facilities management, demolition and utilisation stages (see Fig.
1.3), i.e. the first stages set the limits of the next ones. This process is also complicated by the fact
that the considered versions of brief, design, construction, maintenance, facilities management,
demolition and utilisation are plenty and not always compatible. It should also be kept in mind that
the improvement of some aspects of certain stage operations may lead to the deterioration of the
indices of other stage or processes.
Since the rationality of various aspects of project often depends on a particular interested party
only complex design of a life cycle process of a passive house involving close collaboration of
major stakeholders can lead to good results.
Various parties (see Fig. 1.4) are involved in the brief, design, construction, maintenance,
facilities management, demolition and utilisation of a passive house, their cooperation taking rather
long period of time.


Clients Users Designers Economists


Stakeholders
Passive
house
material
manufactu-
rers
Maintenance
organizations

Suppliers Contractors Finansing
institutions
Local
government
State and state
organisations

Fig. 1.4. Parties involved in the life cycle of a passive house

Every day designers, contractors, suppliers, maintenance specialists, etc. make and analyze the
alternative solutions which may have an impact on the decisions made by other professionals as
well as affective overall project efficiency. Designers deal with a passive houses architectural and
aesthetic aspects, three-dimensional planning, its strength and rigidity as well as defining
comfortability of a passive house (i.e. temperature and humidity, natural lighting, sound insulation,
etc.).They are also interested in getting efficient services, such as heating, ventilation, water supply
and sewerage, communication, automation, etc. Hygiene professionals determine pollution level
and the affect of some construction materials on human health, while economists study the cost of a
plot and a passive house, costs of maintenance, taxes, insurance, rent interest, changes in property
costs, quality (e.g. social, technical and economic indices). Contractors, in their turn, are interested
in efficient technology, organization and management methods, whereas maintenance specialists
seek effective passive house maintenance and refurbishment. The information provided by various
professionals about the same object is executing the project in its entity defines the efficiency of a
passive house life cycle.
The life cycle of a passive house cannot be effectively implemented without the satisfaction of
the differing goals of stakeholders. Each interested party attempts to satisfy a number of goals
(economic, comfort, esthetical, environment, legal, social). Some of these are easily attainable,
while others can be attained only with difficulty. Also, they are not equally significant. Therefore,
the stakeholders, even if they fail to reach all the desired goals, but attain the sufficiently important
ones, can feel quite contented with the situation. In this case, it is very useful to apply the principle
of mutual substitution and summary satisfaction of needs. The stakeholders and their aspired goals
make up one complete entity. The greater is the scope of realization of the pursued goals (taking
into account their significance), the greater (in opinion of stakeholders) is the total efficiency of the
project. In other words, the total efficiency of a passive house life cycle is directly proportional to
the realization of the goals of the parties involved.
Major stakeholders are involved in the development of all main life cycle stages. This helps
support close links between various stakeholders and passive house life cycle formation stages.
Since only the entity of all passive house life cycle stages and the parties involved in their
development can define the project comprehensively the achievement of an efficient project
requires multivariant design and multiple criteria analysis.
The level of the efficiency of construction industry depends on a number of variables, at three
levels: micro and macro level. Although the macro level factors normally influence the level of the
whole country or industry, this research considers only their effect on the efficiency of the
construction industry. The efficiency of the construction industry depends on the influence of many
complex macro level factors (policy executed by the government, legal and institutional
infrastructure, physical infrastructure, financial sector, environment issues, unemployment, interest
rate, inflation, innovations, exchange rate). The efficiency level will, therefore, vary depending on
the aggregate effect of these macro level factors.
The efficiency level of construction industry also depends on various micro level factors
(sources of company finance, information system of construction, types of contracts, construction
employers associations, education and training, brief, designing, manufacture, construction and
maintenance processes, etc.) some of which depend on the influence of the macro level factors. For
instance, the system of taxation which is set at the macro level (following fiscal policy of the
government), exerts a direct influence on wages and salaries (and thereby disposable incomes) and
on prices of materials at the micro level (project level). The standpoint of the State (various laws
and decrees, working of State institutions, etc.) regarding certain activities exert considerable
influence on the efficiency of organizations. The relations of various stakeholders (for instance,
between customer and contractor) are directly governed by law. Each construction organization has
a certain status set by law. This status determines the limits of organizations activities and the
amount of taxes paid by it.
Hence, life cycle efficiency of a passive house depend to a very great extent not only on the
selected most rational processes and solutions, the interest level of the concerned parties involved in
the project, expressed as the effectiveness of their participation in the process, but also on the micro
and macro level factors. As can be seen from Figure 1.2 the object of investigation is rather
complicated involving not only a passive house life cycle and its stages but also including
stakeholders and micro and macro environment factors having impact on the former. To select a
rational project a new passive house life cycle complex analysis model was developed. Based on
this model, professionals involved in design and realization of a passive house life cycle can
develop a lot of the alternative versions as well as assessing them and making the final choice of the
most efficient variant. The diversity of solutions available contributes to more accurate evaluation
of climatic conditions, risk exposure, maintenance services, as well as making the project cheaper
and better satisfying a clients architectural, comfortability, technological and other requirements.
This also leads to better satisfaction of the needs of all parties involved in the project design and
realization.

1.5.4. Practical Realization of a Model for a Complex Analysis of a Passive
House Life Cycle

A practical realization of a Model for a complex analysis of a passive house life cycle was
being developed step by step as follows (see Fig. 1.5):
A comprehensive quantitative and conceptual description of the life cycle of a passive house, its
stages, stakeholders and environment.
Development of a complex database based on quantitative and conceptual description of the
research object.
Development of new methods of multiple criteria analysis to carry out multivariant design of a
passive house life cycle, determine the utility degree of the alternative versions obtained and set
the priorities.
Creation of a multiple criteria decision support systems to be used in computer-aided
multivariant design of a passive house life cycle, determining the utility degree of the
alternative versions obtained and setting the priorities;
Analysis of micro and macro level environment factors influencing a passive house life cycle
and possibilities to alter them in a desired direction.
The stages mentioned above will be now described in more detail.
Quantitative and conceptual description of the research object (see Fig. 1.5) provides the
information about various aspects of a passive house life cycle (i.e. economical, technical,
technological, infrastructural, qualitative (architectural, aesthetic, comfortability), legislative, social
ones, etc.).
Quantitative information is based on the criteria systems and subsystems, units of measure,
values and initial weights as well as the data on the alternative projects development.
When drawing up the system of criteria fully describing the life cycle of a passive house, it is
worth-while to take into account the suggestions of other authors. This is explained by the fact that
the goals pursued by the stakeholders and the system of criteria describing the projects in a certain
sense are rather subjective. Therefore, in order to increase the degree of objectivity, we shall rely on
the suggestions of specialists working in this field when drawing up the system of criteria
describing the projects.
Conceptual description of a passive house life cycle presents virtual and augmented reality,
textual, graphical (schemes, graphs, diagrams, drawings), visual (videotapes) information about the
projects and the criteria used for their definition, as well as giving the reason for the choice of this
particular system of criteria, their values and significances. This part also includes information
about the possible ways of multivariant design.
In order to perform a complete study of the research object a complex evaluation of its
economic, technical, qualitative (i.e. architectural, aesthetic, comfortability), technological, social,
legislative, infrastructural and other aspects is needed. The diversity of aspects being assessed
should follow the diversity of ways of presenting data needed for decision making. Therefore, the
necessary data may be presented in numerical, textual, graphical (schemes, graphs, charts), formula,
videotape, virtual and augmented reality and other forms.
Quantitative and conceptual description of a passive house life cycle and its stages made is
used as a basis for developing a complex data bases containing overall information about it and
allowing to carry out its multivariant design and multiple criteria analysis. Since the efficiency of
any constituent part of the project depends on a particular party in its execution only complex
design of a passive house life cycle involving close cooperation of all stakeholders can yield good
results.


Economic Infrastructural Legislative

Technical Project aspects being evaluated Social

Technological Quality (architectural, aesthetics, comfortability)

A comprehensive quantitative and conceptual description of the life cycle of a
passive house, its stages, stakeholders and environment

Text Virtual and augmented reality Formula

Drawings Presentation of data Videotapes

Graphical (diagrams, schemes, graphs, etc..)

Development of a complex database

Development of new methods of multiple criteria analysis

Multiple criteria decision support systems developed for a passive house life cycle and its stages as
follows:
multiple criteria analysis of a passive house life cycle and its stages,
multivariant design and multiple criteria analysis of refurbishment of residential houses,
multiple criteria analysis of construction projects,
project total quality analysis,
multivariant design and multiple criteria analysis of one-family houses

Development of rational micro and macrolevel environment

Determination of rational processes and
their constituents parts
Brief Design Construc-
tion
Mainte
-nance
Realization of purposes of stakeholders
(clients, users, designers, economists,
contractors, maintenance engineers, passive
house material manufacturers, suppliers,
contractors, finansing institutions, local
government, state and state organisations)
involved in the life cycle of a passive house


Rational life cycle of a passive house

Development of rational micro and macrolevel environment

Fig. 1.5. Practical realization of a model for a complex analysis of a passive house life cycle

Alternative passive house life cycle versions include different cost of a plot and a passive
house, maintenance costs as well as various architectural, aesthetic, space-planning, comfortability
characteristics, infrastructure and environment pollution. Particular stakeholders often have their
own preferential rating of these criteria, also giving different values to qualitative characteristics.
Besides, designing of a passive house life cycle allows for the development of plenty of the
alternative versions of its particular stages. This causes a lot of problems in determining the most
efficient project. To overcome these difficulties some complex data bases were developed. They
contain a complex description of the alternative versions available in quantitative and conceptual
forms. These data taken together can describe the object to be considered in more detail. The
application of complex data bases described allows to better satisfy the needs of the parties involved
as well as helping to choose an efficient project.
A complex data bases consists of the following parts:
Initial data bases. These contain the initial data provided by various stakeholders allowing to
carry out a complex design of the whole project or its parts.
Evaluation data bases, containing comprehensive quantitative and conceptual information
provided by stakeholders allowing to get a full description of the alternative variants. Based on
the evaluation data bases multiple criteria analysis of a passive house life cycle and its stages is
carried out.
Multivariant design data bases consisting of comprehensive quantitative and conceptual
information about possible combinations of the alternative variants available.
These complex data bases can contain data on theoretical and practical experience of the
stakeholders, some additional facts as well as the recommendations as to how to avoid previous
mistakes.
For example, a decision support system using these data bases can help compare the project
being designed or executed with the alternative or already realized projects in order to find its
disadvantages and provide recommendations as to how to increase its efficiency.
In this way, the use of complex data bases enables the user to take into account experts
(including passive house owners and users, financing organisations, architects, engineers,
manufacturers of passive house materials, contractors, state and its institutions, local governments,
etc.) knowledge in various fields and the previous experience gained in developing similar projects
applying them to currently developed project. For getting more efficient projects this information
should be used at an early stage when the first meeting with a client takes place, which could save
from repeating prior mistakes as well as leading to a more advanced and efficient project. In making
a complex passive house life cycle design architects, designers, utility engineers, economists,
contractors, suppliers, users can more efficiently solve common problems. This results in lower
project cost and passive house time, as well as increasing its quality.
Interacting with the data bases the user can get more detailed or integral information on the
object considered. Given this opportunity and using the data from complex data bases as well as
being provided with a decision support system, the user can find an effective project variant in a
comparatively short time. In this way, a project best satisfying the needs of the client may be found
saving the time of the client and designers.
It is quite obvious that to develop and analyse thousands of the alternative variants based on
dozens of criteria having each specific values and significances would be hardly possible without
the use of computers. Only development of decision support systems could help solve this
complicated problem. Therefore, to achieve the above-mentioned aims a multiple criteria decision
support system consisting of a data bases, data base management system, a model base, model base
management system and the users interface (see Fig. 1.5) was created to be used for a passive
house life cycle design and multiple criteria analysis.
Micro and macrolevel environment factors having an impact on a passive house life cycle will
be discussed in the next sections.

1.5.5. Micro and Macro Factors which Influence the Efficiency of the
Construction Industry

In order to assure the efficiency of a project, it should be executed within certain bounds which
are determined by the construction environment. The fact is that these factors are different in each
country, so also the possibilities for efficient realisation of projects (see Fig. 1.6) will also vary.
Figure 1.6 indicates diagrammatically the factors at micro and macro level which may impinge
upon the efficiency of the construction. This means that to be efficient the construction must operate
within certain boundaries imposed by the micro and macro factors. Recognising that in each
country the factors will be different, this diagram will vary accordingly. It is necessary to utilise
knowledge and experience about the micro and macro level factors, so as to increase the efficiency
level in each country under consideration. This will be done by analysing the worldwide experience,
knowledge and best practices and applying this to specific country.
Using taxation as an example of this, it can be appreciated that if the level of taxation is high,
national firms could either go bankrupt because of increased tax liabilities, or they could decrease
efficiency in the face of a lack of competition from international companies who will not attempt to
enter the local market. Similarly, if the tax level is lowered, this may cause national firms to lose
market share to international companies entering the local market, or to force them to increase
efficiency in the face of such competition.


Economic
Fiscal
Legal
Market
etc.
etc.
etc.
etc.
Boundary of
micro factors
Boundary of
macro factors
Boundary of
efficiency


Fig. 1.6. Micro and macro factors which influence the efficiency of the construction industry

Such changes in taxation will alter the boundary of efficiency of the construction. Similar
construction environment changes can shift this boundary (the area within boundary of efficiency
expresses the total satisfaction level of needs of all stakeholders). For example, the specific country
government (in order to solve the most important problems for specific country society) may
abolish VAT on new residential passive houses in order to promote investment in housing. Thus the
boundary of efficiency is extended to include this new development from the former situation. After
development of the specific country financial sector the boundary will alter again (Figure 1.7
illustrates a revised level of efficiency as an example of how to take account of these alterations).

Economic
Fiscal
Legal
Market
etc.
etc.
etc.
etc.
Revised Boundary
of macro factors
Revised Boundary
of micro factors
Revised Boundary
of Efficiency


Fig. 1.7. Fluctuation of efficient boundary of micro and macro environment

Figure 1.8 graphically illustrates interrelationships between macrolevel factors and the
construction. The area inside the ellipse represents the positive action of specific macrolevel factors
on the efficiency of the construction. The area outside the ellipse represents the negative effect of
the macrolevel factors on the efficiency of the construction. Where the macrolevel factors overlap a
better environment for the construction is created. In this case the optimum environment for the
construction is when all seven ellipse areas are overlapping (i.e. economic, fiscal, legal and market).
The greater the common overlapping area (taking into account the significance of the factors), the
greater will be the efficiency level of the construction. Having investigated the effects of the micro
and macro variables affecting construction by using best practices, differences have been identified
between these and specific country. On the basis of these differences, the main implications for
specific country can be identified. Studying only some worldwide experience, knowledge and best
practices could lead to any inferences being purely subjective. However, by studying a number of
countries any bias can be diminished. In other words, the presence of specific micro and macrolevel
variable factors immediately imposes objective limitations on the efficient activities of stakeholders.
The stakeholders, in the presence of these objective limitations, try to perform their activities in a
more rational way.


Fig.1.8. Determination of optimal, rational and negative environment for the construction industry

Based on the above considerations, it is possible to propose a life cycle process model of an
efficient construction industry on the basis of the performed search for a rational variable
environment for specific country (i.e. seek to explore ways of harmonising the relationship between
the specific country construction in transition and its environment). Upon completion of such a
model, the stakeholders by taking into consideration existing limitations of micro and macrolevel
environment and existing possibilities, will be able to use their resources in a more rational manner.
One of the major tasks of an organization is to carry out its activities under the most favourable
micro and macrolevel conditions. Efforts are made to ensure that the structure, goals, output,
efficiency and quality of production of the organization would be in maximum conformity with the
existing environmental conditions. The pursuit of impracticable goals, for instance, trying to realize
projects which surpass the organizations capabilities or the environment (economical, social, legal,
political, competitive and technological conditions) is adverse, may cause undesirable
consequences.
In order to assure the efficiency of a project, it should be executed within certain bounds which
are determined by micro and macrolevel factors. These factors are follows.

Macro efficiency level factors

The highest level at which efficiency factors may be considered is the macro efficiency level
factors. The level of efficiency and the scope of activities of the construction industry depend on the
next macrolevel variable factors:
a key economic indicators for the country as a whole,
demand,
intervention of government,
physical infrastructure,
financial sector,
interest rate,
environment issues,
unemployment,
labour skill level,
wages level,
insurance,
inflation,
innovations,
exchange rate,
unofficial economy, etc.
As an example, further on we shall briefly discuss some above mentioned macro efficiency
level factors.
The government or local authorities stimulate the interest of some private companies in
investing in a state sector of economy or in some particular areas. The financial assistance may be
in the form of subsidies, grants, benefits, preferential credits, government guarantees of the loan.
This economical policy of the state is aimed at cutting unemployment, restoring or developing
certain districts of the cities, etc.
The effective price for a passive house is not generally its capital cost but includes the cost of
servicing the loan for its purchase. The stakeholders involved during the passive house life cycle
quickly respond to any changes in monetary policies, especially those concerning the increase of
interest rates. In most countries a great deal of construction work is financed from loans. An
increase in interest rates leads not only to a drop in demand for passive house products but may also
decrease the profitability of construction firms. The growth of interest rates also leads to increasing
construction cost and a decrease in the number of contracts. Some firms striving to maintain the
number of contracts on account of the profit obtained decrease their construction cost (price). Those
which have taken loans may find themselves on the verge of bankruptcy. The conclusion may be
drawn that when the monetary policy is aimed at increasing the interest rate and limiting the
possibilities of obtaining loans, the demand for passive houses sharply decreases. This, in turn,
leads to a decrease of the number of contracts for construction.
The economic efficiency of imported passive house products and services is to a large extent
dependent on fluctuations in the exchange rate. The specific country construction industry is an
importer of metal, fuel and other raw materials. Exchange rate fluctuations cause changes in the
costs of passive house materials, the price of passive houses and profits which passive house
companies expect to obtain. In these circumstances it is difficult to make exact calculations and
prognoses of passive house development.
The government by changing construction taxation as well as the structure and volume of its
own expenditure (expanding of town reconstruction programmes, housing subsidies and benefits
etc.), affects the demand for construction, inflation and other macroeconomic factors. An increase in
construction taxation and a curtailment of government expenditure usually tends to lower the
demand for construction. And vice versa. Often measures of both types - taxes and government
expenditure go hand-in-hand. So, the efficiency of the construction relies very much on
Governments fiscal and monetary policy.

Macro Market
Economic
Fiscal
Legal
etc.
etc.
etc.
sub-systems
sub-systems
Competition
Demand
Supply
Market Share
etc.
etc.
etc.
sub-systems
Demographics
Standard of Living
Taste/Fashion
Changes in Society
Population Movements
Communication
etc.
sub-systems
sub-systems


Fig. 1.9. Criteria systems and sub-systems characterising macro efficiency level factors

The growth of unemployment causes a fall of GDP and of collected taxes and induces the
appearance of other negative economic consequences. Not only the income of population is reduced
during unemployment, but social problems get more acute and criminal situation of the country gets
worse as well. Besides, there exists a direct connection between unemployment and inflation.
Accelerated reduction of unemployment often causes inflation, and rapid jump of unemployment
lowers the rate of inflation.
In order to give a full assessment of the influence of the above macro factors in influencing the
total efficiency of a project, it is necessary to express them through systems of criteria (see Figure
1.9).

Micro efficiency level factors

The second level factors may be considered as the micro level and these depend upon those at
the macro level.
It is obvious, that in order to design and realize a high-quality passive house project, it is
necessary to take care of its efficiency from the initial brief to the end of maintenance. The entire
process must be planned and executed taking into account the specific goals of the participating
parties. The designing and planning procedure must include multiple criteria optimization, not only
of the separate processes and decisions, but also of the whole life cost of the passive house. This
must take into account the needs expressed by the parties involved in the project.
In order to efficiently design and implement projects in the construction industry, it is necessary
to investigate as many of the possible alternative solutions for each variable and to select the most
rational one. The selected variables are then combined into one efficient project. Hence, the
efficiency of a project will depend to a very great extent not only on the selected variables, but also
on micro and macro factors affecting them.
The level of efficiency and the scope of activities of the construction industry depend on the
next micro variable factors:
enterprise restructuring and structural change,
sources of company finance,
information system of construction,
construction employers associations,
education and training,
types of contracts,
briefing process,
design process,
manufacture process,
construction process,
maintenance process,
facilities management,
etc.
In order to give an accurate assessment of above mentioned micro efficiency level factors, it is
necessary to develop a system of criteria fully describing each of them. For example, the micro
level factors characterizing project efficiency will be considered under the type of contract. The
type of contract can be selected by taking into account numerous factors which influence its
efficiency:
owners corporate policy on contracting;
availability of in-house experienced personnel;
time needed to get the project designed and constructed;
desire of owner to control elements of project;
importance of cost to owner;
amount of risk owner wants to contract out;
availability and suitability of contractors;
local construction climate;
experience of contractor;
degree of confidence in contractor;
pre-contract period (long, short);
consultants (chosen by contractor or employer);
sub-contractors (domestic, nominated);
valuation of variations (expensive, at cost, cheap).
The efficiency of each of above micro factors can also be assessed by a system of criteria
adequately describing it. This can be visualised in a similar way to Figure 1.9 which shows systems
and sub-systems for the macro level factors.


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