Life-Cycle Cost Analysis of Infrastructure Projects - Governing the Nexus: Water, Soil and Waste Resources Considering Global Change - page 103

(GHG) vary across crops. Crop decisions or policies to promote crops need to take
these externalities into account (Davis et al. 2008 ; Gathorne-Hardy 2013b ).
In the absence of appropriate water pricing and regulation (economic or social),
the extent of recycling and reuse of water has been very limited (Reddy and Kurian
2010 ). It was observed that water consumption levels vary widely across different
bathroom fixtures such as flush tanks, faucets, showerheads, etc. (Reddy 1996 ).

Unless one considers the water use (excess) externalities while pricing and taxing
these products, it would result in unsustainable water use practices. In fact, of late,
retailers and consumers are also looking for such information for promoting
environmentally friendly products (Finnveden et al. 2009 ).
Perpetuation of distorted and incoherent policies in the context of climate var-
iability has further aggravated the impacts of resource degradation on food security
as well as socioeconomic equity. Climate variability has increased the risk and
uncertainty in the livelihoods of the farming communities, especially in the rain fed
regions. It is increasingly being realized that investment decisions and public
policies need to take environmental externalities, negative as well as positive, and
the risk analysis into account in order to ensure sustainable development. These
observations hold well across the developing world.
Thus, the need of the hour is to formulate policies and make investment deci-
sions addressing environmental externalities that would ensure sustainable services.
That is project or programme appraisals need to be more comprehensive in order to
move towards green economies. Adopting life cycle thinking is expected to take
care of all these aspects and avoid shifting the burden between sectors and space
(UNEP 2012 ). However, the progress in the adoption of life-cycle cost approach
(LCCA) has been limited across the developing world despite the concerted efforts
of the United Nations Environment Programme (UNEP) to mainstream LCCA into
policy-making over the past decade.
Though the European Commission has taken the lead in mainstreaming LCCA
into policy, there appears to be still barriers to its broader implementation (EC
2003 ). Important reasons for this slow progress include: (1) LCCA is data intensive
and availability of required data and in appropriate formats is dif

cult; (2) Lack of
clarity on drawing a line between what to and what not to include in the case of
environmental impacts and (3) More importantly lack of awareness among the
policy makers of its adoption and capacities to take up LCCA assessments.
Awareness building at the policy level is the main bottleneck, as availability of data
is often demand driven (i.e., data is generated as per requirements).
This chapter is an attempt towards awareness building among the policy makers,
researchers and development practitioners about the importance and role of LCCA
in achieving sustainable development and provision of sustainable services in the
context of developing countries. Speci c objectives include:

1. To discuss the rationale and relevance of LCCA in the context of developing
countries.
2. To present the framework and concepts of LCCA.