Top

The International Journal of Life Cycle Assessment

Published in:

01-11-2013 | LIFE CYCLE SUSTAINABILITY ASSESSMENT: FROM LCA TO LCSA

Economic modelling and indicators in life cycle sustainability assessment

Authors: Richard Wood, Edgar G. Hertwich

Published in: The International Journal of Life Cycle Assessment | Issue 9/2013

Activate our intelligent search to find suitable subject content or patents.

search-config

AI-assisted search

Off

Abstract

Purpose

Sustainability assessment in life cycle assessment (LCA) addresses societal aspects of technologies or products to evaluate whether a technology/product helps to address important challenges faced by society or whether it causes problems to society or at least selected social groups. In this paper, we analyse how this has been, and can be addressed in the context of economic assessments. We discuss the need for systemic measures applicable in the macro-economic setting.

Methods

The modelling framework of life cycle costing (LCC) is analysed as a key component of the life cycle sustainability assessment (LCSA) framework. Supply chain analysis is applied to LCC in order to understand the relationships between societal concerns of value adding and the basic cost associated with a functional unit. Methods to link LCC as a foreground economic inventory to a background economy wide inventory such as an input–output table are shown. Other modelling frameworks designed to capture consequential effects in LCSA are discussed.

Results

LCC is a useful indicator in economic assessments, but it fails to capture the full dimension of economic sustainability. It has potential contradictions in system boundary to an environmental LCA, and includes normative judgements at the equivalent of the inventory level. Further, it has an inherent contradiction between user goals (minimisation of cost) and social goals (maximisation of value adding), and has no clear application in a consequential setting. LCC is focussed on the indicator of life cycle cost, to the exclusion of many relevant indicators that can be utilised in LCSA. As such, we propose the coverage of indicators in economic assessment to include the value adding to the economy by type of input, import dependency, indicators associated with the role of capital and labour, the innovation potential, linkages and the structural impact on economic sectors.

Conclusions

If the economic dimension of LCSA is to be equivalently addressed as the other pillars, formalisation of equivalent frameworks must be undertaken. Much can be advanced from other fields that could see LCSA to take a more central role in policy formation.

previous article Towards life cycle sustainability assessment: drawing on the NEEDS project’s total cost and multi-criteria decision analysis ranking methods

next article Toward a computational structure for life cycle sustainability analysis: unifying LCA and LCC

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

über 102.000 Bücher
über 537 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Finance + Banking
Management + Führung
Marketing + Vertrieb
Maschinenbau + Werkstoffe
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

Springer Professional "Technik"

Online-Abonnement

Mit Springer Professional "Technik" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 390 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Maschinenbau + Werkstoffe

Jetzt Wissensvorsprung sichern!

inform now

www.exiobase.eu

Aghion P, Howitt P (1998) On the macroeconomic effects of major technological change. Ann Econ Statist 49–50:53–75

Aghion P, Howitt P (2009) The Economics of Growth. MIT Press, Cambridge and London

Alcamo J (ed) (1994) IMAGE 2.0: Integrated modelling of global climate change. Kluwer Academic Press, Dordrecht, Netherlands

Alcott B (2009) Historical overview of the Jevons paradox in the literature. In: Polimeni JM, Mayumi K, Giampietro M, Alcott B (eds) The Myth of Resource Efficiency: The Jevons Paradox. Earthscan, London, pp 7–78

Ayres RU, Warr B (2005) Accounting for growth: the role of physical work. Struct Change Econ Dynam 16(2):181–209CrossRef

Barro RJ, Sala-i-Martin X (1994) Quality Improvements in Models of Growth. Quality Improvements in Models of Growth. C.E.P.R. Discussion Papers, CEPR Discussion Papers: 1076

Benko T, Szanyi A, Mizsey P, Fonyo Z (2006) Environmental and economic comparison of waste solvent treatment options. Cent Eur J Chem 4(1):92–110CrossRef

Berck P, Hoffmann S (2002) Assessing the employment impacts of environmental and natural resource policy. Environ Resource Econ 22(1):133–156CrossRef

BMU (1998) Nachhaltige Entwicklung in Deutschland, Entwurf eines umweltpolitischen Schwerpunktprogramms (Sustainable development in Germany—environmental policy program). Bonn: Ministry for Environment, Nature Protection and Reactor Safety. Nachhaltige Entwicklung in Deutschland, Entwurf eines umweltpolitischen Schwerpunktprogramms (Sustainable development in Germany—environmental policy program). Bonn: Ministry for Environment, Nature Protection and Reactor Safety

Bracciali A, Cervello S, Gatti P (2008) Acoustic Effectiveness of Damped Wheels and Impact on Life-Cycle Cost of Different Typologies of Passenger Trains. In: Schulte-Werning B, Thompson D, Gautier P-E et al (eds) Noise and Vibration Mitigation for Rail Transportation Systems, vol 99. Notes on Numerical Fluid Mechanics and Multidisciplinary Design. Springer Berlin/Heidelberg, pp 257–263. doi:10.1007/978-3-540-74893-9_36

Chenery HB, Watanabe T (1958) International comparisons of the structure of production. Econometrica 26(4):487–521CrossRef

Dahlström K, Ekins P (2007) Combining economic and environmental dimensions: Value chain analysis of UK aluminium flows. Resour Conservat Recycl 51(3):541–560CrossRef

Dandres T, Gaudreault C, Tirado-Seco P, Samson R (2011) Assessing non-marginal variations with consequential LCA: Application to European energy sector. Renew Sustain Energ Rev 15(6):3121–3132CrossRef

Dandres T, Gaudreault C, Tirado-Seco P, Samson R (2012) Macroanalysis of the economic and environmental impacts of a 2005–2025 European Union bioenergy policy using the GTAP model and life cycle assessment. Renew Sustain Energ Rev 16(2):1180–1192CrossRef

Defourny J, Thorbecke E (1984) Structural path analysis and multiplier decomposition within a social accounting matrix framework. Econ J 94:111–136CrossRef

Ekvall T, Andrae A (2006) Attributional and consequential environmental assessment of the shift to lead-free solders. Int J Life Cycle Assess 11(5):344–353CrossRef

Ereev SY, Patel MK (2012) Standardized cost estimation for new technologies (SCENT) – methodology and tool. J Bus Chem 9(1):31

European Commission (2010) International Reference Life Cycle Data System (ILCD) handbook. Publ Office Eur Union. doi:10.2788/96557

EUROSTAT (2005) Measuring progress towards a more sustainable Europe. Measuring progress towards a more sustainable Europe. European Communities

Foran B, Lenzen M, Dey C (2005) Balancing Act—A Triple Bottom Line Account of the Australian Economy. Balancing Act—A Triple Bottom Line Account of the Australian Economy. CSIRO Resource Futures and The University of Sydney, Canberra, ACT, Australia

Ghosh A (1958) Input-output approach in an allocation system. Economica 25(97):58–64CrossRef

Girod B, de Haan P, Scholz R (2011) Consumption-as-usual instead of ceteris paribus assumption for demand. Int J Life Cycle Assess 16(1):3–11CrossRef

Granovskii M, Dincer I, Rosen MA (2006) Economic and environmental comparison of conventional, hybrid, electric and hydrogen fuel cell vehicles. J Power Sourc 159(2):1186–1193CrossRef

Guinée JB, Heijungs R, Huppes G, Zamagni A, Masoni P, Buonamici R, Ekvall T, Rydberg T (2011) Past Life Cycle Assessment: Present, and Future. Environ Sci Technol 45(1):90–96CrossRef

Gujba H, Mulugetta Y, Azapagic A (2010) Environmental and economic appraisal of power generation capacity expansion plan in Nigeria. Energ Pol 38(10):5636–5652CrossRef

Hawken P (1993) The Ecology of Commerce—A Declaration of Sustainability. ISBN 0-88730-655-1 edn. Harper Business, New York

Heijungs R, Suh S (2002) The computational structure of life cycle assessment. Kluwer Academic Publishers, Dordrecht, NetherlandsCrossRef

Heijungs R, Huppes G, Guinée JB (2010) Life cycle assessment and sustainability analysis of products, materials and technologies. Toward a scientific framework for sustainability life cycle analysis. Polym Degrad Stab 95(3):422–428CrossRef

Hertwich EG (2005) Consumption and the Rebound Effect: An Industrial Ecology Perspective. J Ind Ecol 9(1–2):85–98

Hertwich EG (2012) Life Cycle Sustainability: Technologies, Actions and Institutions. (draft)

Hertwich EG, Sanders M, Wood R (2011) Prospective Sustainability Assessment of Technologies: Indicators and measures of economic impact. Prospective Sustainability Assessment of Technologies: Indicators and measures of economic impact PROSUITE Project Report Task 2.1. Utrecht University, Utrecht

Hunkeler DJ, Lichtenvort K, Rebitzer G, Ciroth A, SETAC-Europe (2008) Environmental life cycle costing. SETAC

Jevons WS (1866) The coal question: an inquiry concerning the progress of the nation, and theprobable exhaustion of our coal mines. Macmillan & Co, London

Kloepffer W (2008) Life cycle sustainability assessment of products. Int J Life Cycle Assess 13(2):89–95CrossRef

Kruse S, Flysjö A, Kasperczyk N, Scholz A (2009) Socioeconomic indicators as a complement to life cycle assessment—an application to salmon production systems. Int J Life Cycle Assess 14(1):8–18CrossRef

Kuznets S (1955) Economic growth and income inequality. Am Econ Rev 1:1–28

Lenzen M, Treloar G (2003) Differential convergence of life-cycle inventories towards upstream production layers. J Ind Ecol 6(3–4):137–160

Leontief W (1941) The Structure of the American Economy, 1919–1939. Oxford University Press, Oxford, UK

Linnanen L, Luoma P, Pesonen H-L (2002) Ecological tax reform—a value chain level approach. Bus Strateg Environ 11(3):170–180CrossRef

May JR, Brennan DJ (2006) Sustainability assessment of australian electricity generation. Process Saf Environ Prot 84(2):131–142CrossRef

Miller RE, Blair PD (1985) Input-Output Analysis: Foundations and Extensions. Prentice-Hall, Englewood Cliffs, NJ, USA

Moe E (2010) Energy, industry and politics: Energy, vested interests, and long-term economic growth and development. Energy 35(4):1730–1740CrossRef

Murphy DJ, Hall CAS (2011) Energy return on investment, peak oil, and the end of economic growth. Ann NY Acad Sci 1219(1):52–72CrossRef

Nakamura S, Rebitzer G (2008) Environmental Life Cycle Costing. In: Environmental Life Cycle Costing. CRC Press, pp 35–57. doi:10.1201/9781420054736.ch3

Norris G (2001a) Integrating life cycle cost analysis and LCA. Int J Life Cycle Assess 6(2):118–120

Norris GA (2001b) Integrating Economic Analysis into LCA. Environ Qual Manag 10(3):59–64CrossRef

Parikh U (2002) Life cycle accounting: towards life cycle design. Int J Life Cycle Assess 7(3):183–183CrossRef

Rasmussen PN (1956) Studies in Intersectoral Relations. North-Holland, Amsterdam, Netherlands

Rebitzer G, Hunkeler D (2003) Life cycle costing in LCM: ambitions, opportunities, and limitations—discussing a framework. Int J Life Cycle Assess 8(5):253–256CrossRef

Schmidheiny S (1992) Changing course: a global business perspective on development and the environment. MIT Press, Cambridge, Mass

Schwab Castella P, Blanc I, Gomez Ferrer M, Ecabert B, Wakeman M, Manson J-A, Emery D, Han S-H, Hong J, Jolliet O (2009) Integrating life cycle costs and environmental impacts of composite rail car-bodies for a Korean train. Int J Life Cycle Assess 14(5):429–442CrossRef

Seuring S, Schmidt W-P, Ciroth A, Rebitzer G, Huppes G, Lichtenvort K (2008) Modeling for Life Cycle Costing. In: Environmental Life Cycle Costing. CRC Press, pp 17–34. doi:10.1201/9781420054736.ch2

Sohn J (2004) Do birds of a feather flock together? Economic linkage and geographic proximity. Ann Reg Sci 38(1):47–73CrossRef

Solow RM (1956) A contribution to the theory of economic growth. Q J Econ 70(1):65–94CrossRef

Sorrell S (2009) Jevons’ Paradox revisited: The evidence for backfire from improved energy efficiency. Energ Pol 37(4):1456–1469CrossRef

Stiglitz J, Sen A, Fitoussi J-P (2009) The Measurement of Economic Performance and Social Progress Revisited. The Measurement of Economic Performance and Social Progress Revisited. Commission on the Measurement of Economic Performance and Social Progress, Paris

Stölting W, Spengler T (2005) Life cycle considerations in remanufacturing strategies—a framework for decision support. In: Fleuren H, Hertog D, Kort P (eds) Operations Research Proceedings 2004, vol 2004. Operations Research Proceedings. Springer Berlin Heidelberg, pp 50–58. doi:10.1007/3-540-27679-3_7

Swarr T, Hunkeler D, Klöpffer W, Pesonen H-L, Ciroth A, Brent A, Pagan R (2011a) Environmental life-cycle costing: a code of practice. Int J Life Cycle Assess 16(5):389–391CrossRef

Swarr T, Hunkeler D, Klöpffer W, Pesonen H-L, Ciroth A, Brent A, Pagan R (2011b) Environmental Life Cycle Costing: A Code of Practice. Society of Environmental Toxicology & Chemistry

Takase K, Kondo Y, Washizu A (2005) An analysis of sustainable consumption by the waste input-output model. J Ind Ecol 9(1–2):201–220

Thiesen J, Christensen TS, Kristensen TG, Andersen RD, Brunoe B, Gregersen TK, Thrane M, Weidema BP (2008) Rebound effects of price differences. Int J Life Cycle Assess 13(2):104–114CrossRef

Thomassen MA, Dolman MA, van Calker KJ, de Boer IJM (2009) Relating life cycle assessment indicators to gross value added for Dutch dairy farms. Ecolog Econ 68(8–9):2278–2284CrossRef

UN (2001) Indicators of Sustainable Development: Guidelines and Methodologies. Indicators of Sustainable Development: Guidelines and Methodologies. United Nations, New York

Van Den Bergh JCJM, Truffer B, Kallis G (2011) Environmental innovation and societal transitions: Introduction and overview. Environ Innov Soc Transit 1(1):1–23CrossRef

Vendrusculo E, Queiroz G, Jannuzzi G, da Silva JH, Pomilio J (2009) Life cycle cost analysis of energy efficiency design options for refrigerators in Brazil. Energ Effic 2(3):271–286CrossRef

Weidema BP (1993) Market aspects in product life cycle inventory methodology. J Clean Prod 1(3–4):161–166CrossRef

Weidema B (2006) The integration of economic and social aspects in life cycle impact assessment. Int J Life Cycle Assess 11(Special Issue 1):89–96CrossRef

Wood R, Garnett S (2010) Regional sustainability in Northern Australia—A quantitative assessment of social, economic and environmental impacts. Ecolog Econ 69(9):1877–1882CrossRef

Wood R, Lenzen M (2009) Aggregate measures of complex economic structure and evolution a review and case study. J Ind Ecol 13(2):264–283CrossRef

World Bank (2011) The Changing Wealth of Nations: Measuring Sustainable Development for the New Millennium. World Bank, Washington, DC

World Commission on Environment and Development (1987) Our Common Future. Oxford University Press, Oxford

Title: Economic modelling and indicators in life cycle sustainability assessment
Authors: Richard Wood
Edgar G. Hertwich
Publication date: 01-11-2013
Publisher: Springer Berlin Heidelberg
Published in: The International Journal of Life Cycle Assessment / Issue 9/2013
Print ISSN: 0948-3349
Electronic ISSN: 1614-7502
DOI: https://doi.org/10.1007/s11367-012-0463-2

Springer Professional

Abstract

Purpose

Methods

Results

Conclusions

Please log in to get access to your license.

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft+Technik"

Springer Professional "Technik"

Other articles of this Issue 9/2013

Integrating environmental and economic life cycle analysis in product development: a material selection case study

Toward a computational structure for life cycle sustainability analysis: unifying LCA and LCC

Life cycle optimization of energy-intensive processes using eco-costs

Evaluating the Sustainability SWOT as a streamlined tool for life cycle sustainability assessment

Revisiting the role of LCA and SLCA in the transition towards sustainable production and consumption

An approach to LCSA: the case of concrete recycling