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Use of monetary environmental values in life cycle assessments and product development Bengt Steen Environmental system analysis & CPM, Chalmers.

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Presentation on theme: "Use of monetary environmental values in life cycle assessments and product development Bengt Steen Environmental system analysis & CPM, Chalmers."— Presentation transcript:

1 Use of monetary environmental values in life cycle assessments and product development Bengt Steen Environmental system analysis & CPM, Chalmers

2 Why? To include environmental costs in prices is an accepted EU policy ”Get the prices right” There is a lack of tools to assess ”right prices” The UN ”Polluter Pays Principle”

3 History An LCA method, the EPS system was developed in its first version 1989 as a tool for designers at Volvo The first case was about the choice between plastics and metals in a front piece Since 1992, damage costs (WTP) has been used as a measure for environmental impacts in the EPS system A competence centre, CPM was formed to develop and maintain LCA knowledge including the EPS system

4 CPM CPM = Centre for the environmental assessment of products and material systems CPM is a competence centre since 1996 at Chalmers, where industry, academy and government join forces in the ambition to reduce the environmental impact of product systems.

5 The LCA concept ISO The EPS system The EPS default method EPS = Environmental Priority Strategies in product design

6 All choices depend on three things What is included How trade-offs are made How uncertainty is handled

7 What is included in the EPS default method? Impacts on five safeguard subjects: –Human health –Biodiversity –Bioproductivity –Abiotic resources –Recreational values Temporal and spatial system boundaries –As long as the impact exists, global

8 How is trade-off made? WTP to avoid changes in the safeguard subjects No discounting of future impacts All WTP values representative for OECD countries

9 How is uncertainty handled? Impacts included even if uncertain Best estimate and uncertainty quantified Monte Carlo simulations used for assessing uncertainty in technical choices Uncertainty in choice means inefficiency (=costs) in sustainability measures

10 Product calculation Manufacturing Use Waste management Product calculation Manufacturing Use Waste management WTP for materials and processes Manufacture of PE Material recycling of PE Incineration of PE Heat recovery of PE Land fill of PE etc WTP for materials and processes Manufacture of PE Material recycling of PE Incineration of PE Heat recovery of PE Land fill of PE etc EPS in practice WTP for emissions Carbon dioxide Carbon monoxide Nitrogen oxides Sulphur oxides VOC etc. WTP for emissions Carbon dioxide Carbon monoxide Nitrogen oxides Sulphur oxides VOC etc. Willingness to pay for env. assets Preserved species Crop Wood Meat/fish Decreased mortality Etc Willingness to pay for env. assets Preserved species Crop Wood Meat/fish Decreased mortality Etc Impact models Inventory I Inventory II

11 Safe guard subjectImpact categoryCategory indicatorIndicator unitWeighting factor (ELU/indic ator unit) Uncer -tainty factor Human healthLife expectancyYOLLPerson-years Human healthSevere morbidity Person-years Human healthMorbidity Person-years Human healthSevere nuisance Person-years Human healthNuisance Person-years1003 Ecosystem production capacity Crop growth capacityCropkg0.152 Ecosystem production capacity Wood growth capacityWoodkg Ecosystem production capacity Fish and meat production capacity Fish and meatkg12 Ecosystem production capacity Soil acidificationBase cat-ion capacity of soil mole H+ - equivalents Ecosystem production capacity Production capacity for irrigation water Irrigation waterkg Ecosystem production capacity Production capacity for drinking water Drinking waterkg0.036 Abiotic stock resourcesDepletion of oil reservesFossil oilkg Abiotic stock resourcesDepletion of coal reservesFossil coalkg Abiotic stock resourcesDepletion of natural gas reserves Natural gaskg1.12 Monetary values for Environmental Assets

12 Abiotic stock resourcesDepletion of Ag reserves Ag reserveskg of element Abiotic stock resourcesDepletion of Al reserves Al reserveskg of element Abiotic stock resourcesDepletion of Ar reserves Ar reserveskg of element01 Abiotic stock resourcesDepletion of As reserves As reserveskg of element Abiotic stock resourcesDepletion of Au reserves Au reserveskg of element Abiotic stock resourcesDepletion of B reserves B reserveskg of element Abiotic stock resourcesDepletion of Ba reserves Ba reserveskg of element4.453 Abiotic stock resourcesDepletion of Bi reserves Bi reserveskg of element Abiotic stock resourcesDepletion of Be reserves Be reserveskg of element9583 Abiotic stock resourcesDepletion of Br reserves Br reserveskg of element01 Abiotic stock resourcesDepletion of Cd reserves Cd reserveskg of element Abiotic stock resourcesDepletion of Ce reserves Ce reserveskg of element45.23 Abiotic stock resourcesDepletion of Cl reserves Cl reserveskg of element01 Abiotic stock resourcesDepletion of Co reserves Co reserveskg of element2563 Abiotic stock resourcesDepletion of Cr reserves Cr reserveskg of element84.93 Abiotic stock resourcesDepletion of Cs reserves Cs reserveskg of element5123 Abiotic stock resourcesDepletion of Cu reserves Cu reserveskg of element2083 Abiotic stock resourcesDepletion of Dy reserves Dy reserveskg of element10203 Monetary values for Environmental Assets

13 Example of calculation of a damage cost In EUR/kg of CO2

14 Substance flow group Impact index, (ELU/kg) Substance flow group Impact index, (ELU/kg) As95.3HCl2.13 Benzene3.65HF2.07 Butadiene10.7Hg61.4 Cd10.2N2ON2O38.3 CH 2 O6.47NH CH Ni0 CO0.331NOx2.13 CO PAC (PAH)64300 Cr20.0Pb2910 Cu0PM Ethylene3.45Propylene2.64 H2SH2S6.89SO Zn0 WTP for impacts from emissions to air From CPM report 1999:5, available at

15 SubstanceGlobal emission or reserve depletion, kg/year EPS default index, ELU/kg Added global value % of adjusted global GNP CO22.20E E SO21.70E E NOx1.53E E Fossil oil3.40E E Fossil coal3.17E E Natural gas1.56E E Ag-ore1.30E E Al-ore2.11E E Au-ore1.46E E E Cu-ore9.03E E Fe-ore5.07E E Pt-ore1.24E E E Pd-ore9.90E E E Pb-ore2.80E E P-minerals1.73E E Validation

16 MaterialActivity Environmental cost/unit (ELU)unit ABSComposting0,033kg ABSEnergy recovery0,15kg ABSIncineration0,34kg ABSLandfill0,0005kg ABSProduction2,07kg ABSReuse-material-1,04kg GMT 40% GFComposting0,03kg GMT 40% GFEnergy recovery0,19kg GMT 40% GFIncineration0,57kg GMT 40% GFLandfill0,14kg GMT 40% GFProduction0,63kg GMT 40% GFReuse-material-0,32kg PBTComposting0,033kg PBTEnergy recovery0,24kg PBTIncineration0,28kg PBTLandfill0,0005kg PBTProduction3,18kg PBTReuse-material-2,54kg Polyamide (PA)Composting0,0327kg Polyamide (PA)Energy recovery0,0462kg Polyamide (PA)Incineration0,342kg Polyamide (PA)Landfill0,0005kg WTP for environmental impacts of materials and processes

17 Simple excel version of the EPS default method is available at design/ Aluminium bonnet for a car

18 Monte Carlo simulation Env. Damage cost for A - B Probability in % for A-B being less than the value on the Y-axis Damage cost for A is highest Damage cost for B is highest A is an Al bonnet for a car, B is a steel bonnet for a car

19 Data whose precision is most important for the precision in priority Standard deviation Critical change factor

20 Looking ahead How to define the ”monetary value” of environmental impacts? How to put the ethical dimension on the agenda? An IPCC for ”right prices”?


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