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

In the European Union project New Energy Externalities Development for Sustainability (NEEDS), power generation technologies were ranked by means of two sustainability assessment approaches. The total costs approach, adding private and external costs, and a multi-criteria decision analysis (MCDA) were used, integrating social, economic and environmental criteria. Both approaches relied on environmental indicators based on life cycle assessment. This study aims to analyse the extent to which the development of life cycle sustainability assessment (LCSA) can draw on these ranking methods.

The approaches to rank technologies in the NEEDS project are reviewed in terms of similarities and differences in concept, quantification and scope. Identified issues are discussed and set into perspective for the development of a potential future LCSA framework.

The NEEDS MCDA and total costs considerably overlap regarding issues covered, except for several social aspects. Beyond total costs being limited to private and external costs, most notable conceptual differences concern the coverage of pecuniary (i.e. price change-induced) external effects, and potential double-counting for instance of resource depletion or specific cost components. External costs take account of the specific utility changes of those affected, requiring a rather high level of spatial and temporal detail. This allows addressing intra- and inter-generational aspects. Differences between both ranking methods and current LCSA methods concern the way weighting is performed, the social aspects covered and the classification of indicators according to the three sustainability dimensions. The methods differ in the way waste, accidents or intended impacts are taken into account. An issue regarding the definition of truly comparable products has also been identified (e.g. power plants).

For the development of LCSA, the study suggests that taking a consequential approach allows assessing pecuniary effects and repercussions of adaptation measures, relevant for a sustainability context, and that developing a life cycle impact assessment for life cycle costing would provide valuable information. The study concludes with raising a few questions and providing some suggestions regarding the development of a consistent framework for LCSA: whether the analyses in LCSA shall be distinguished into the three dimensions of sustainable development at the inventory or the impact level also with the aim to avoid double-counting, whether or not LCSA will address exceptional events, whether or not benefits shall be accounted for and how to deal with methodological and value choices (e.g. through sensitivity analyses).