Externalities in construction
NRM3: Order of cost estimating and cost planning for building maintenance works, published by the Royal Institute of Chartered Surveyors (RICS) defines ‘externalities’ as: ‘…the quantifiable costs or benefits that specifically occur when the actions of organisations and individuals have an effect on people other than themselves, such as non-construction costs, income and wider social and business costs.’
The Green Book, Central Government Guidance On Appraisal And Evaluation, Published by HM Treasury in 2018, suggests that externalities: ‘…occur when consuming or producing a good or service produces benefits or costs for others that are not directly involved in the consumption or production.’
AR5 Climate Change 2014: Impacts, Adaptation, and Vulnerability, Glossary, published by the Intergovernmental Panel on Climate Change (IPCC) suggests that: ‘Externalities arise from a human activity when agents responsible for the activity do not take full account of the activity’s impacts on others’ production and consumption possibilities, and no compensation exists for such impacts. When the impacts are negative, they are external costs. When the impacts are positive, they are external benefits.’
ICMS: Global Consistency in Presenting Construction Life Cycle Costs and Carbon Emissions, 3rd edition, November 2021, published by the ICMS (International Cost Management Standard) Coalition, defines externalities as: ‘Quantifiable cost or benefit that occurs when the actions of organisations and individuals have an effect on people other than themselves, e.g. non-construction costs, income and wider social and business costs (ISO 15686-5). In the context of carbon emissions, these are benefits or loads beyond the system boundary including reuse, recovery and recycling potential.’
[edit] Related articles on Designing Buildings
Featured articles and news
A case study and a warning to would-be developers
Creating four dwellings for people to come home to... after half a century of doing this job, why, oh why, is it so difficult?
Reform of the fire engineering profession
Fire Engineers Advisory Panel: Authoritative Statement, reactions and next steps.
Restoration and renewal of the Palace of Westminster
A complex project of cultural significance from full decant to EMI, opportunities and a potential a way forward.
Apprenticeships and the responsibility we share
Perspectives from the CIOB President as National Apprentice Week comes to a close.
The first line of defence against rain, wind and snow.
Building Safety recap January, 2026
What we missed at the end of last year, and at the start of this...
National Apprenticeship Week 2026, 9-15 Feb
Shining a light on the positive impacts for businesses, their apprentices and the wider economy alike.
Applications and benefits of acoustic flooring
From commercial to retail.
From solid to sprung and ribbed to raised.
Strengthening industry collaboration in Hong Kong
Hong Kong Institute of Construction and The Chartered Institute of Building sign Memorandum of Understanding.
A detailed description from the experts at Cornish Lime.
IHBC planning for growth with corporate plan development
Grow with the Institute by volunteering and CP25 consultation.
Connecting ambition and action for designers and specifiers.
Electrical skills gap deepens as apprenticeship starts fall despite surging demand says ECA.
Built environment bodies deepen joint action on EDI
B.E.Inclusive initiative agree next phase of joint equity, diversity and inclusion (EDI) action plan.
Recognising culture as key to sustainable economic growth
Creative UK Provocation paper: Culture as Growth Infrastructure.
Futurebuild and UK Construction Week London Unite
Creating the UK’s Built Environment Super Event and over 25 other key partnerships.
Welsh and Scottish 2026 elections
Manifestos for the built environment for upcoming same May day elections.
Advancing BIM education with a competency framework
“We don’t need people who can just draw in 3D. We need people who can think in data.”
Comments
[edit] To make a comment about this article, or to suggest changes, click 'Add a comment' above. Separate your comments from any existing comments by inserting a horizontal line.