Incorporating costs in LCA

The goal of LCA is to identify the environmental impacts resulting from a product, process, or activity. While LCA is useful for evaluating environmental attributes, it stops short of providing information that business managers routinely utilize for decision-making — i.e., dollars. Thus, decisions regarding the processes used for manufacturing products and the materials comprising those products can be enhanced by weaving cost and environmental information into the decision-making process. Various approaches have been used during the past decade to supplement environmental information with cost information. One of these tools is environmental accounting, the identification, analysis, reporting, and use of environmental information, including environmental cost data. Environmental cost accounting provides information necessary for identifying the true costs of products and processes and for evaluating opportunities to minimize those costs. As demonstrated through two case studies, many companies are incorporating environmental cost information into their accounting systems to prioritize investments in new technologies and products.     

A methodological approach for the economic assessment of best available techniques demonstrated for a case study from the steel industry

The determination and the assessment of Best Available Techniques (BAT) is one of the key issues in the realisation of the IPPC-Directive. While research has already focused on environmental benefits and technical practicability of techniques within LCA, little work has been carried out assessing economic feasibility. A methodology for the economic assessment of BAT in the framework of the IPPC-Directive on a plant level has to comprise all costs that accrue by measures to prevent, to reduce, to utilise or to remove emissions into water, air and soil caused by industrial production processes. The applied cost concept provides a systematic accounting and allocation of decision relevant costs and possibly revenues, that are pertinent to the economic assessment of BAT. The application of the methodology to a case study from the steel industry shows the practical use of the approach.     

Integrating life cycle costs and environmental impacts of composite rail car-bodies for a Korean train

Background, aim, and scope  A coupled Life Cycle Costing and life cycle assessment has been performed for car-bodies of the Korean Tilting Train eXpress (TTX) project using European and Korean databases, with the objective of assessing environmental and cost performance to aid materials and process selection. More specifically, the potential of polymer composite car-body structures for the Korean Tilting Train eXpress (TTX) has been investigated. Materials and methods  This assessment includes the cost of both carriage manufacturing and use phases, coupled with the life cycle environmental impacts of all stages from raw material production, through carriage manufacture and use, to end-of-life scenarios. Metallic carriages were compared with two composite options: hybrid steel-composite and full-composite carriages. The total planned production for this regional Korean train was 440 cars, with an annual production volume of 80 cars. Results and discussion  The coupled analyses were used to generate plots of cost versus energy consumption and environmental impacts. The results show that the raw material and manufacturing phase costs are approximately half of the total life cycle costs, whilst their environmental impact is relatively insignificant (3–8%). The use phase of the car-body has the largest environmental impact for all scenarios, with near negligible contributions from the other phases. Since steel rail carriages weigh more (27–51%), the use phase cost is correspondingly higher, resulting in both the greatest environmental impact and the highest life cycle cost. Compared to the steel scenario, the hybrid composite variant has a lower life cycle cost (16%) and a lower environmental impact (26%). Though the full composite rail carriage may have the highest manufacturing cost, it results in the lowest total life cycle costs and lowest environmental impacts. Conclusions and recommendations  This coupled cost and life cycle assessment showed that the full composite variant was the optimum solution. This case study showed that coupling of technical cost models with life cycle assessment offers an efficient route to accurately evaluate economic and environmental performance in a consistent way.     

Eco-efficiency

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 (R_E,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 R_E,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 R_E,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 R_E,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.     

可持续消费的内涵及研究进展——产业生态学视角

生产和消费是产生诸多环境问题的根本原因,而可持续生产和消费则是实现可持续发展的根本途径。基于产业生态学视角,界定了可持续消费的定义及内涵,认为可持续消费首先须符合代内公平、代际公平和资源能源永续合理利用等可持续理念;其次辨识了可持续消费研究依次经历关注消费者行为直接环境影响、关注产品和服务生命周期环境影响到关注消费者责任3个阶段;最后结合我国城市化、工业化背景,提出我国可持续消费研究应该以城市居民为重点、加强生命周期数据库建设和内注重可持续生产等建议。     

Economic Costs of Childhood Diseases and Disabilities Attributable to Environmental Contaminants in Washington State, USA

This study estimates the economic costs associated with childhood diseases and disabilities attributable to environmental contaminants in Washington State, USA, including asthma, cancer, lead exposure, birth defects, and neurobehavioral disorders. The estimates are based on “cost of illness” models that include direct healthcare costs and indirect costs. The estimates are also based on an “environmentally attributable fraction” model which quantifies the proportions of each disease or disability that can reasonably be attributed to environmental contaminants. The study concludes that the annual cost of selected childhood diseases and disabilities attributable to environmental contaminants in Washington State is $1875 million in 2004 $, comprising $310.6 million in direct healthcare costs and $1565 million in indirect costs, and with a range of $1600–$2200 million a year. These estimates are consistent with other studies. Like the previous studies, a significant proportion of the estimated costs can be attributed to lead exposure. This estimate is equivalent to about 0.7% of the total Washington Gross State Product, and the estimated direct healthcare costs are equivalent to at least 0.2% of the total Washington State health expenditures. These costs could be lessened or prevented if exposures to environmental contaminants were reduced or eliminated. This study argues for the need for an ecosystem approach to human health in which the condition of the environment, in terms of exposures to environmental contaminants, must be addressed taking a systemic perspective.     

The virtual eco-costs ‘99 A single LCA-based indicator for sustainability and the eco-costs-value ratio (EVR) model for economic allocation

In literature, many models (qualitatively as well as quantitatively) can be found to cope with the problem of communicating results of LCA analyses with decision takers. In a previous article of this Journal, an LCA-based single indicator for emissions is proposed: the ‘virtual pollution prevention costs ‘99’ (Vogtländer et al. 2000a). In this article, a single LCA-based indicator for sustainability is proposed. It builds on the virtual pollution prevention costs ‘99 for emissions, and adds the other two main aspects of sustainability: material depletion and energy consumption. This single indicator, the ‘virtual eco-costs ‘99’, is the sum of the marginal prevention costs of:

Material depletion, applying ‘material depletion costs’, to be reduced by recycling

Energy consumption, applying ‘eco-costs of energy’ being the price of renewable energy

Toxic emissions, applying the ‘virtual pollution prevention costs ‘99’

The calculation model includes ‘direct’ as well as ‘indirect’ environmental impacts. The main groups of ‘indirect’ components in the life cycle of products and services are:

Labour (the environmental impacts of office heating, lighting, computers, commuting, etc.)

production assets (equipment, buildings, transport vehicles, etc.)

To overcome allocation problems of the indirect components of complex product-service systems, a methodology of economic allocation has been developed, based on the so called Eco-costs/ Value Ratio (EVR) model. This EVR calculation model appears to be a practical and powerful tool to assess the sustainability of a product, a service, or a product-service combination.     

Life cycle assessment as a tool for improving process performance: A case study on boron products

This paper explores the use of LCA as a tool for process environmental management, thereby moving the focus from product to process oriented analysis. The emphasis is on Improvement Assessment in which the “hot spots” in the system are targeted for maximum environmental improvements. In this context, it is useful to use multiobjective optimisation which renders Valuation unnecessary. The approach is illustrated by the case study of the system processing boron ores to make five different products. The results of Inventory Analysis and Impact Assessment are presented and discussed. In Improvement Assessment, a number of improvement options are identified and evaluated, using system optimisation. It is shown that the site environmental performance can be improved over current operation by an average of 20% over the whole life cycle. Thus the study demonstrates that the optimisation approach to environmental process management may assist in identifying optimal ways to operate a process or plant from “cradle to grave”. This may help the process industries not only to comply with legislation but also provide a framework for taking a more proactive approach to environmental management leading to more sustainable industrial operations and practices.     

Current status and needs for life cycle assessment development in Asian/Pacific Regions

Conclusion  In conclusion, LCA that is conducted and used appropriately is an indispensable tool to assist decision-makers in making an informed decision about the environmental impacts of their activities, products or services. A global effort towards LCA use should be encouraged and countries in the Asian/Pacific Regions should not be left out. LCA-related activities reported in the symposium were described     

Using BEES to select cost-effective green products

The BEES (Building for Environmental and Economic Sustainability) software brings to your fingertips a powerful technique for balancing the environmental and economic performance of building products. The tool is based on consensus standards and designed to be practical, flexible, and transparent. Version 2.0 of the Windows™-based decision support software, aimed at designers, builders, and product manufacturers, includes actual environmental and economic performance data for 65 building products. The purpose is to support purchasing decisions by providing key science-based information often lacking in ‘green’ product selection. The intended result is a cost-effective reduction in building-related contributions to environmental problems. Contribution of the National Institute of Standards and Technology (NIST) and not subject to copyright in the United States. NIST does not endorse any particular brand, product, or service.     

Modelling interactions between farmer practices and fattening pig performances with an individual-based model

European pig production continues to encounter economic and environmental challenges. To address these issues, methods have been developed to assess performances of pig production systems. Recent studies indicate that considering variability in performances among pigs improves the accuracy and reliability of results compared with modelling an average animal. Our objective was to develop a pig fattening unit model able to (i) simulate individual pig performances, including their variability in interaction with farmers’ practices and management, and (ii) assess their effects on technical, economic and environmental performances. Farmer practices included in the model were chosen from a typology generated from on-farm surveys focused on batch management, pig allocation to pens, pig feeding practices, practices of shipping to the slaughterhouse, and management of the remaining pigs. Pigs are represented using an individual-based model adapted from the InraPorc® model. To illustrate the model’s abilities, four scenarios were simulated that combine two feed rationing plans (ad libitum, restricted to 2.5 kg/day) and two feed sequence plans (two-phase, 10-phase). Analysis of variance was performed on the simulated technical, economic and environmental indicators (calculated via Life Cycle Assessment). The feed rationing plan and feed sequence plan significantly affected all indicators except for the premium per pig, for which the feed sequence plan did not have a significant effect. The ‘restricted 10-phase’ scenario maximised gross margin of the fattening unit (14.2 €/pig) and minimised environmental impacts per kg of pig produced. In contrast, the ‘ad libitum two-phase’ scenario generated the lowest margin (8.20 €/pig) and the highest environmental impacts. The model appears to be a promising tool to assess effects of farmers’ practices, pig characteristics and farm infrastructure on technical, economic and environmental performances of the fattening unit, and to investigate the potential of improvement. However, further work is needed, based on virtual experiments, in order to evaluate the effects of a larger diversity of practices.     

Integrating life cycle cost analysis and LCA

The private sector decision making situations which LCA addresses mustalso eventually take theeconomic consequences of alternative products or product designs into account. However, neither the internal nor external economic aspects of the decisions are within the scope of developed LCA methodology, nor are they properly addressed by existing LCA tools. This traditional separation of life cycle environmental assessment from economic analysis has limited the influence and relevance of LCA for decision-making, and left uncharacterized the important relationships and trade-offs between the economic and life cycle environmental performance of alternative product design decision scenarios. Still standard methods of LCA can and have been tightly, logically, and practically integrated with standard methods for cost accounting, life cycle cost analysis, and scenario-based economic risk modeling. The result is an ability to take both economic and environmental performance — and their tradeoff relationships — into account in product/process design decision making.     

Proposal of a method for allocation in building-related environmental LCA based on economic parameters

Application and development of the LCA methodology to the context of the building sector makes several building specific considerations necessary, as some key characteristics of products in the building sector differ considerably from those of other industrial sectors. The largest difference is that the service life of a building can stretch over centuries, rather than decades or years as seen for consumer products. The result of the long service life is that it is difficult to obtain accurate data and to make relevant assumptions about future conditions regarding, for example, recycling. These problems have implications on the issue of allocation in the building sector, in the way that several allocation procedures ascribe environmental loads to users of recycled or reused products and materials in the future which are unknown today. The long service life for buildings, building materials and building components, is associated with the introduced concept of a virtual parallel time perspective proposed here, which basically substitutes historical and future processes and values with current data. Further, the production and refining of raw material as a parallel to upgrading of recycled material, normally contains several intermediate products. A suggestion is given for how to determine the comparability of intermediate materials. The suggested method for allocation presented is based on three basic assumptions: (1) If environmental loads are to be allocated to a succeeding product life cycle, the studied actual life cycle has to take responsibility for upgrading of the residual material into secondary resources. (2) Material characteristics and design of products are important factors to estimate the recyclable amount of the material. Therefore, a design factor is suggested using information for inherent material properties combined with information of the product context at the building level. (3) The quality reduction between the materials in two following product life cycles is indicated as the ratio between the market value for the material in the products. The presented method can be a good alternative for handling the problem of open-loop recycling allocation in the context of the building sector if a consensus for the use of the fictive parallel time perspective and the use of the design factor can be established. This as the use of the time perspective and design factor is crucial to be able to deal with the problem of long service lives for buildings and building materials and the specific characteristics of the same building materials and components built into different building contexts.     

In Search of a Consistent Solution to Allocation of Joint Production

Three consistency problems are identified that arise when partitioning a product system with joint production according to an allocation key, such as revenue or mass of the joint products, namely: lacking consistency of rationales and procedures; lacking consistency of monetary, mass, and energy balances in the partitioned product systems; and lacking consistency of results across model resolution and classification of the intermediate flows. Different solutions to these consistency problems are described, including the attempt of ecoinvent to solve the third consistency problem with a system model that uses revenue allocation at the point of substitution. The problems with the different practical implementations are described. For each of the three consistency problems, a solution is proposed and combined into a single consistent solution. The consistency of rationales and procedures is ensured by asking only one question at a time and performing a separate allocation and calculation for each question. The problem of maintaining monetary, mass, and energy balances is solved by a generalized allocation correction. The identified problem with consistency of results across model resolution and classification is solved by redefining the point of substitution. It is described what consequences the solutions will have if their results are misused for decision making that will shift demand between products.     

Application of life cycle assessment in environmental labelling

The present state of worldwide discussions of how to apply LCA in environmental labelling, taking into account the current ISO 14 020 and ISO 14 024 works, is described. There is a consensus to use LCA as a tool for more scientific environmental labelling. The examples presented verify some practical possibilities to realise this approach. As a background to different stages of practical labelling, results from LCA studies are already used in the German “Blue Angel” scheme, e.g. for the definition of the scope in one product category, for the priorisation of specific life cycle phases and criteria, as a basis to establish a scoring system or to emphasise the importance of information on how to use environmentally sound products. Practical examples are presented in detail for hand-drying systems, paper products, milk packages, household equipment, televisions and detergents. Some future perspectives are mentioned. Presentation at “The Second International Conference on EcoBalance - The New Stage of LCA as a Common Language”, Nov. 18, 19 and 20, 1996 Tsukuba, Japan     

A novel approach to the problem of geographic allocation of environmental impact in Life Cycle Assessment and Material Flow Analysis

Life Cycle Assessment and Material Flow Analysis, in spite of their invaluable contribution to the investigation of the environmental performance of human-dominated processes, still fall short of properly addressing the issue of the geographic distribution of the potential environmental impacts, which often has wide-reaching environmental as well as political implications. An innovative allocation method based on matrix algebra is introduced here, in order to allow to split the calculated environmental impact indicators into fractions thereof which are geographically attributed to the different world regions. This is done on the basis of: (i) where the analyzed process takes place and (ii) where the directly and indirectly required fossil and nuclear fuels are sourced from (including those for electricity production). The method has been successfully tested on primary aluminium production, as a first case study.     

Characterised and Projected Costs of Nonindigenous Species in Canada

Biological invasions by nonindigenous species (NIS) can have adverse effects on economically important goods and services, and sometimes result in an ‘invisible tax’ on natural resources (e.g. reduced yield). The combined economic costs of NIS may be significant, with implications for environmental policy and resource management; yet economic impact assessments are rare at a national scale. Impacts of nuisance NIS may be direct (e.g. loss of hardwood trees) or indirect (e.g. alteration of ecosystem services provided by growing hardwoods). Moreover, costs associated with these effects may be accrued to resources and services with clear ‘market’ values (e.g. crop production) and to those with more ambiguous, ‘non-market’ values (e.g. aesthetic value of intact forest). We characterised and projected economic costs associated with nuisance NIS in Canada, through a combination of case-studies and an empirical model derived from 21 identified effects of 16 NIS. Despite a severe dearth of available data, characterised costs associated with ten NIS in Canadian fisheries, agriculture and forestry totalled $187 million Canadian (CDN) per year. These costs were dwarfed by the ‘invisible tax’ projected for sixteen nuisance NIS found in Canada, which was estimated at between $13.3 and $34.5 billion CDN per year. Canada remains highly vulnerable to new nuisance NIS, but available manpower and financial resources appear insufficient to deal with this problem. An erratum to this article is available at .     

Tackling environmental impacts in simple trigeneration systems operating under variable conditions

Purpose

Environmental concerns have been a growing issue when planning energy supply systems for buildings, as the energy demands (presenting seasonal and daily variations) represent one of the most energy-intensive consumptions in industrialized societies. The optimal operation corresponding to different energy demands of a trigeneration system was analyzed by an integrated methodology combining Thermoeconomic analysis and life cycle assessment, in order to adequately allocate the energy resources and the generated environmental loads to the different energy services produced.

Methods

Thermoeconomic analysis, which is usually used to allocate energy and economic costs, is herein applied to the evaluation of environmental costs and distribution of resources throughout the trigeneration system. Attention is focused on the correct allocation of energy resources and environmental loads to internal flows and final products. Appropriate rules were established to calculate energy and environmental costs.

Results and discussion

Operation of the system considered the possibilities that surplus electricity could be exported to the national grid and part of the cogenerated heat could be wasted if this resulted in a decrease of operation costs and/or environmental loads. The results obtained show a low-cost and low-emission production with respect to the separate production in different operation modes. It was observed that, in specific periods, the trigeneration system operates wasting part of the cogenerated heat, and, in other periods, part of the electricity produced is exported to the electric grid. The trigeneration system operates in these modes because it results beneficial from environmental or economic viewpoints, achieving a lower economic cost or fewer CO₂ emissions.

Conclusions

The methodology presented as well as the allocation method proposal were congruent with the objectives of installing trigeneration systems that supplied energy services with fewer emissions than those of separate production and of equally benefitting the consumers of heat, coolth (“coolth” is used as the noun form of “cool”; opposite of warmth. Not to be confused with cooling, which is the opposite of heating.) (alias cooling energy), and electricity.