Life Cycle Assessment: New Developments And Multi-disciplinary Applications by Khoo Hsien Hui;Tan Reginald B H;

Author:Khoo, Hsien Hui;Tan, Reginald B H;
Language: eng
Format: epub
Publisher: World Scientific Publishing Company
Published: 2022-05-15T00:00:00+00:00

Cost for Product Manufacturer

Cost for Product User

Production

Materials

Energy

Machinery and factories

Labour

Waste management

Emission controls

Transports

Marketing activities

Purchase

Use

Maintenance/repairs (warranty)

Infrastructure

Liabilities

Transports

Storage

Materials

Energy

Maintenance/repair infrastructure

End of life

Waste collection, disassembly, recycling, and disposal

Waste collection

Disassembly

Recycling

Waste disposal

•cost incurred in relation to physical and immaterial processes, deemed significant from the viewpoint of the product’s environmental impact,

•cost deemed significant in relation to the objectives and the scope of environmental impact evaluations determined by LCA in the inputoutput aspect,

•social costs,

•the external environmental costs.

As suggested by the above information, the fundamental property offered by ELCC is the correlation between the process system of LCA methodology, the product, the existing material and energy flows, and a number of other variables. Consequently, ELCC terminology is based on more or less the same terms and notions as LCA concept and may safely be applied to both products and services, as the calculation methodology is the same in both cases. An example of a cradle-to-gate production system, starting from fossil fuel extraction to refinery, other material production stages, final product manufacture, use and disposal with costing factors associated with each LCA stages, is illustrated in Figure 3. Simplified ELCC factors involved are external environmental costs of pollution generated.

The combination of I/O-based and process-based LCA, also known as hybrid LCA or I/O-LCA, may prove to be of enormous value in environmental life cycle costing [19]. Hybrid LCA typically employs two input–output methods: the quantitative model and the Leontief price model. The former may be used for calculations of the so-called sectoral production level and the correlated environmental load associated with a given production output. The price model, on the other hand, allows for the calculation of prices for output products against specific indicator levels, with consideration of their added value or the estimated cost per unit of production [20]. In practice, and from a mathematical standpoint, both models (quantitative vs. price) are treated as separate and independent [21].

From the ELCC standpoint, the physical relations between inputs and outputs, in a processual approach, improve the utility of the quantitative model in LCA as basis for the investigation of costs identified in the price model, while the latter places emphasis on the calculation of costs and prices. Initial determination of the input–output matrix provides a better understanding of the ELCC calculation system and is constrained by a number of principles designed to ensure cohesiveness of system operation. Of those, the most important one — at least with reference to cost analysis — is the principle stating that the corresponding values on the input and output side of the equation should be equal. Let us assume a simple scenario of a national economy comprising three industrial sectors; calculation of the above principle in the I/O matrix approach may be obtained from Equations (4)–(6):

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