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Wednesday, February 29, 2012 |  |
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NAPA News
NAPA Economic Study Finds Flaws in Material-Specific Discount Rates LCCA Proposal The National Asphalt Pavement Association has released a report on life-cycle cost analysis procedures which examines in depth the concept of the material-specific discount rate. "Material-Specific Discount Rate: Inappropriate for Life-Cycle Cost Analysis" (NAPA Special Report 203) outlines standard and customary life-cycle cost analysis models. It also shines a light on a "material-specific discount rate," which is being promoted by the cement and concrete industries. NAPA’s report reveals that the material-specific discount rate is not a concept economists use or accept. Instead, it was suggested in a 2011 report as a computational work-around by the Concrete Sustainability Hub (CSH). The CSH, located at the Massachusetts Institute of Technology, is funded by the Portland Cement Association and the National Ready Mixed Concrete Association. The CSH report is being used to support legislation in Congress mandating the use of a material-specific discount rate in life-cycle cost analyses when comparing alternative designs for publicly funded projects, including pavements, bridges and buildings. If adopted, a material-specific discount rate could skew life-cycle cost analyses for construction materials, including asphalt, concrete, steel, wood and plastics. Read more |
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