Consumption-as-usual instead of ceteris paribus assumption for demand

Life cycle assessment (LCA) according to ISO 14040 standard (ISO-LCA) is applied to assess the environmental impact per functional unit of new or modified products. However, new or modified products can also induce demand changes—so-called rebound effects. If overall environmental impact is of interest, there is a need to assess the potential magnitude of such rebound effects and to allow recommendations on how to mitigate these effects. To do so, this study proposes to complement the constant demand assumption (implicitly assumed by the ISO-LCA), commonly known as the ceteris paribus assumption, with a consumption-as-usual assumption allowing a systematic stepwise inclusion of rebound effects.

We base our results on a formal description of household consumption. To indicate the relevance of the proposed integration of rebound effects, different comparative LCAs are reviewed and the concept is applied to mobility as illustrative examples.

Based on a description of household demand and consumption feedback loops, we propose the consumption-as-usual concept, which in contrast to the constant demand assumption assumes that (1) the use of household resources for consumption does not change and (2) preferences remain the same. Household resources for example are purchasing power (we assume that households do not work less), time, and living space. We outline how this concept allows integrating potential rebound effects into ISO-LCA by considering three different cases of reallocating freed household resources. To illustrate the use of the consumption-as-usual concept, we draw implications for different comparative LCAs from the literature and illustrate cases with income and time rebound for different personal travel modes.

The consumption-as-usual concept is applicable to a broad range of product modifications and allows an important complementation of the LCA regarding rebound effects. For products with various changes in the need for household resources, the assessment becomes however a challenging task. The limits of the consumption-as-usual concept are mainly given by its two underlying assumptions. Therefore, new or modified products with the potential to change consumer preferences or even the amount of household resources used for consumption go beyond this concept.

The integration of rebound effects is feasible for many comparative LCAs. It helps in increasing the reliability of the assessment of overall environmental impact reduction through new or modified products. In addition, a basis is provided with which to mitigate rebound effects and give appropriate recommendations to product users.

Potential rebound effects should be included in LCA in order to guide consumers and policy towards sustainable consumption. We recommend the consumption-as-usual concept for this purpose. To predict rebound effects under consumption as usual instead of outlining potential amplitudes, further research on household preferences is needed and an optimisation model should be applied for household consumption. However, even if data are available for such a prediction, the assessment of potential rebound effects is still recommended in order to recognise dangers and opportunities in consumption changes.