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Environmental Accounting and Life Cycle Analysis

Environmental Accounting and Life Cycle Analysis. What is Life Cycle Analysis?. A tool to understand environmental impacts associated with products, processes, and activities LCA is a systems approach to evaluating environmental consequences of a product or process

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Environmental Accounting and Life Cycle Analysis

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  1. Environmental Accounting and Life Cycle Analysis

  2. What is Life Cycle Analysis? • A tool to understand environmental impacts associated with products, processes, and activities • LCA is a systems approach to evaluating environmental consequences of a product or process • It takes a “cradle to grave” or “cradle to cradle” perspective. • A systematic set of procedures for examining the environmental impacts of a product or service throughout its life cycle

  3. Applications • Alternative Fuels/energy sources • Alternative materials(Aluminum vs. Steel body, Asphalt vs. concrete, wood vs. brick • Alternative processes (Corn-biomass ethanol) • Alternative products (cloth diapers vs. disposable diapers) • Alternative packaging (cans vs. tetra-packs) • Alternative end of life management options (recycle, incinerate, dispose) • Environmental, economic tradeoffs

  4. Components of an LCA • Defining the purpose and scope • Life-cycle Inventory • Life-cycle Impact Assessment • Life-cycle Improvement Analysis

  5. Steps in LCA • Describe product life cycle • Inventory raw material inputs and waste output • Assess environmental impacts • Identify improvements

  6. Product Life Cycle Product Intermediate Inputs

  7. Example: Plastic Bottles

  8. Inventory Inputs and Wastes Raw Material Extraction Material Processing Amount of Water, Energy, Raw Materials, and Land Use Amount of Gaseous, Liquid, Solid Waste Manufacturing Distribution Consumption Waste Management

  9. Life Cycle Inventory • All materials used identified • Listed and quantified • Data is collected on extraction, intermediate inputs, manufacturing, transportation, use and end of life management processes. • Impact on environment defined at each stage in the life cycle (extraction, make, use, and dispose) • A number of environmental impacts considered (air emissions, water emissions, solid waste, acidification,global warming etc) • Allocation procedures in case of multiple products

  10. Example Inventory for 1 Kg of PVC Plastic

  11. Impact Assessment • From emission inventory to effects • Classification, Characterization (relative effects) and Valuation • Resource effects • Human Health Effects • Non-Health effects (Aesthetics, material damage, Crop damage) • Ecological effects • Aggregation/ tradeoffs • Valuation with $

  12. Examples of Environmental Impact Categories Developed by Five International Organizations

  13. Improvement Analysis • Systematic evaluation of needs and opportunities to reduce environmental burden associated with entire life cycle of the product. • Can be both quantitative and qualitative. • Lifecycle costing {private and public costs at each stage}

  14. Using Life Cycle Analysis Results • Remember the 2-sector input-output model? Electricity Water Electricity 0.333 0.167 Water 0.286 0.375 • What is the total output of different sectors needed to meet an exogenous electricity demand of $1?

  15. $1 Electricity Direct-Requirement 0.333 Electricity 0.286 Water 0.333*.333Elect 0.333*0.286 Water 0.286*0.167Elect 0.286*375 water Tot. Electricity = $1 +0.333+ (0.333*.333 +0.286*.167) +……=1.693 Total Water = 0.286 + (0.333*0.286 +0.286*0.375) +…….= 0.775

  16. Economic input-output life cycle analysis [EIO-LCA] • What if we know how much SO2 is emitted for each $1 of electricity produced? Electricity Water Electricity 0.333 0.167 Water 0.286 0.375 SO2 g/$ 25 5 • What are total S02 emissions when demand for electricity increases by $1?

  17. Algebraic Method • X1=1+0.333X1+0.167X2 ---------(1) • X2 =0 +0.286X1+0.375X2--------(2) • Solving for X1 and X2 we get • X1=1.6932, X2=0.7748 • These represent total requirement to meet $1 electricity demand • Total SO2 emissions = 1.6932*25 +0.7748*5 = 46.204 grams

  18. EIO-LCA Software • EIO-LCA does this type of calculations for 498 sectors and a large number of environmental impacts • Fuel use (11 fuels) • Non-renewable ores use (Fe, Cu, Au, Ag, Al….) • Conventional air pollutants • Toxic Releases (TRI) • Hazardous solid waste generation (RCRA) • Fertilizer use (eutrophication) (7) • Summary indicators: Energy, CMU-ET(toxicity weighting), GWP, ODP, Acidification Potential • Web version available athttp://www.eiolca.net

  19. Steps in using EIO-LCA software • Develop a list of inputs expressed in $ cost • Identify appropriate commodity sector using the search function on the software (simple version) • Select the commodity sector and enter the $ value for one input at a time. Click on “Display results” • You can also look at individual impacts by selecting them in the prior screen • Note down summary results for that input • Repeat for other inputs and then sum all impacts.

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