Life-cycle costing (LCC) is a method of estimating the total cost of owning and operating an asset over its entire life span. LCC considers all costs associated with the acquisition, installation, operation, maintenance, and disposal of the asset12. LCC can help businesses make better decisions about purchasing, budgeting, pricing, and investing in assets2.
LCC does not quantify environmental impacts such as acidification, eutrophication, or global warming. These impacts are measured by life-cycle assessment (LCA), which is a method of evaluating the environmental effects of a product or service throughout its life cycle. LCA considers the inputs and outputs of materials, energy, and emissions at each stage of the product or service life cycle34. LCA can help businesses identify opportunities to reduce their environmental footprint, improve their sustainability performance, and comply with environmental regulations4.
However, LCC and LCA are often used together to compare different alternatives based on both economic and environmental criteria. For example, a business may use LCC to estimate the energy costs of different lighting options, and LCA to estimate the greenhouse gas emissions of each option. By combining LCC and LCA results, the business can select the option that minimizes both costs and emissions.
