Life cycle costing in the circular economy: a state-of-the-art review of current trends in the building construction sector

Abstract

The building construction sector's resource intensity and linear practices demand transition to a Circular Economy (CE). Life Cycle Costing (LCC) offers a means to quantify the long-term financial implications of circular approaches, yet its application in the context of CE within building construction remains underexplored and methodologically fragmented. This paper comprehensively reviews the application of LCC in promoting CE principles within the building construction sector. Through a structured review of 51 case studies from published literature, this study identifies current practices, methodological variations, and gaps in integrating LCC with CE principles. The findings reveal a slow but increasing trend in using LCC to evaluate the economic feasibility of CE strategies in the building construction sector. While financial LCC remains dominant, other approaches include environmental LCC, which incorporates carbon and landfill costs, and social LCC, which considers broader social impacts, particularly in waste management and production processes. However, challenges persist, primarily the linear progression of building life cycle stages assumed in LCC, which limits its application in the CE, compounded by the lack of a standardised LCC methodology. This is evident in the diverse types of LCC used, the definition of system boundaries, and the consideration of cost perspectives. The study highlights the potential of LCC to facilitate circularity in the building construction sector by integrating economic, social, and environmental dimensions, providing insights for researchers and practitioners to enhance the implementation of robust LCC frameworks.