Capitalizing Green Pavement: A Method and Valuation

The use of recycling techniques in pavement construction offers significant benefits of resource conservation and emission reduction. While the environmental benefits are generally considered as business expenses, a new trend is to turn sustainable construction into profit. By generating financial revenue via carbon trading mechanism, asphalt producers and road builders can compensate their sustainable efforts and adoption of recycling techniques for reducing greenhouse gas (GHG) emissions. This carbon trading mechanism rewards emission reduction projects with carbon offsets that can be sold at a certain price in the market. This paper develops a framework for pavement recycling projects to verify GHG reductions and register for carbon offsets. Unlike most standards today that use a project-by-project method to quantify carbon offsets, a performance standard is presented based on the life cycle environmental impact analysis to facilitate credit assessment, generation, and verification. The results of thirteen pavement project cases demonstrate that, even with a 20% market share, cold recycling techniques will be able to achieve an emission reduction of 2.8 million tons of GHGs every year. If these GHG reductions can be quantified into carbon offsets for trading, cold recycling techniques will open up more than 20 million revenue sources beyond direct product sales.