Eco-efficiency |
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Authors: | Andreas Kicherer Stefan Schaltegger Heinrich Tschochohei Beatriz Ferreira Pozo |
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Institution: | (1) BASF Aktiengesellschaft, GUP/CE-Z570, 67056 Ludwigshafen, Germany;(2) Centre for Sustainability Management (CSM), University of Lüneburg, Scharnhorststr. 1, 21335 Lüneburg, Germany |
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Abstract: | Goal, Scope and Background The eco-efficiency analysis and portfolio is a powerful decision support tool for various strategic and marketing issues.
Since its original academic development, the approach has been refined during the last decade and applied to a multitude of
projects. BASF, as possibly the most prominent company using and developing this tool, has applied the eco-efficiency approach
to more than 300 projects in the last 7 years. One of the greatest difficulties is to cover both dimensions of eco-efficiency
(costs or value added and environmental impact) in a comparable manner. This is particularly a challenge for the eco-efficiency
analyses of products.
Methods In this publication, an important approach and field of application dealing with product decisions based on the combination
of Life Cycle Cost (LCC) and Life Cycle Assessment (LCA) is described in detail. Special emphasis is put on the quantitative
assessment of the relation of costs and environmental impacts. In conventional LCA an assessment of environmental impact categories
is often made by normalization with inhabitant equivalents. This is necessary to be able to compare the different environmental
impact categories, because of each different unit. For the proposed eco-efficiency analysis, the costs of products or processes
are also normalized with adapted gross domestic product figures.
Results and Discussion The ratio between normalized environmental impact categories and normalized costs (RE,C) is used for the graphical presentation of the results in an eco-efficiency portfolio. For the interpretation of the results
of an eco-efficiency analysis, it is important to distinguish ratios RE,C which are higher than one from ratios lower than one. In the first case, the environmental impact is higher than the cost
impact, while the inverse is true in the second case. This is very important for defining which kind of improvement is needed
and defining strategic management decisions. The paper shows a statistical evaluation of the RE,C factor based on the results of different eco-efficiency analyses made by BASF. For industries based on large material flows
(e.g. chemicals, steel, metals, agriculture), the RE,C factor is typically higher than one.
Conclusions and Recommendations This contribution shows that LCC and LCA may be combined in a way that they mirror the concept of eco-efficiency. LCAs that
do not consider LCC may be of very limited use for company management. For that very reason, corporations should install a
data management system that ensures equal information on both sides of the eco-efficiency coin. |
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Keywords: | Eco-efficiency Life Cycle Assessment (LCA) Life Cycle Cost (LCC) normalization |
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