Externalities in Building Decisions
Definition
Externalities are costs or benefits experienced by parties who are not part of the transaction that creates them. The guide uses pollution and public infrastructure wear to show how a purchase price can omit wider effects. PDF page 13
Why it matters
Ignoring externalities can make an option appear less costly or more beneficial than it is for the wider system. The source argues that building professionals need metrics that bring such effects into valuation. PDF page 13
How it works
The decision process identifies affected parties, names effects outside the immediate transaction, and uses metrics to make those effects visible. The guide notes that green-building processes and rating systems began with environmental metrics and were expanding toward social justice and public health indicators. PDF page 13
LEED relevance
The source links rating systems with efforts to quantify externalities, but this page does not define a current LEED requirement or calculation method. PDF page 13
Application to MEP and piping engineering
Practical engineering interpretation
This section is an engineering interpretation, not a LEED requirement stated by the source.
- Record costs and effects that are not carried directly by the system purchaser or operator.
- Use a stated boundary and metric set so excluded effects remain visible during option selection.
Relationships
- Triple Bottom Line for the Built Environment
- Environmental Burden of Conventional Building Practices
- Early Integration of Green Building Costs
- Life-Cycle Approach to Building Decisions
Source references
- PDF page 13 - definition, examples, valuation, and metrics.
Review questions
- Which costs or benefits fall outside the contracting parties?
- What metric could make the most important external effect visible?