Integrating economic mechanisms into Life Cycle Analysis: what to consider and how? A. Zamagni, R. Buonamici, P. Masoni, D. Quaglione, A. Raggi, A. Sarra 4th International Seminar on Society & Materials 28-29 April, Nancy
Today’s menu To show why economic evaluations are extremely important and relevant even when the analysis is narrowed to the environmental aspects; To discuss a working method to deal with the problem, articulated into three steps: Framing the question Selection of appropriate methods and models Their application and interpretation of results
To show preliminary elements of the analysis, sketched at conceptual level. Starting by a case study on a new technology development, the purpose is to make the approach applicable whenever a question of “sustainability” evaluation arises. 28-29 April 2010
2
Why do we focus on economic relations? • •
An old story: different schools of thought have recognised the importance of working at the environment-economy interface The introduction of a new technology in the market sets off multiple dynamics, giving potentially rise to secondary effects:
– by offsetting recource saving from improved production process by increased and less expensive consumption; – on other technologies, leading to cheaper production and higher production volume elsewhere. The related environmental impacts look different. Simple example: plastic packaging in Italy • 2.2 million t plastic packaging every year: 50% recycled, 50% energy recovery. • If we want to compare two scenarios, 100% recycling vs 100% energy recovery, this cannot be done without considering the interrelations with technology systems and the markets. • 100% recycled: reduced cost of plastic substitution of plastic with other materials effect on energy market (the energy recovered from incineration should be produced by other sources and/or with other technologies.) etc.
28-29 April 2010
3
What’s the problem? • Starting point: – Innovative technology system (TyGRE) that produces valuable ceramic materials (SiC) starting from end-of-life tyres.
• Our ambition: – to understand the influence of new technologies on environmental and economic systems;
• Main and general question: – Which are the environmental consequences due to the introduction of technology TyGRE into the market?
• The question is still too general and the scope is not well framed • We need to identify a suitable approach and working method to deal with the problem. 28-29 April 2010
4
Procedural approach • The procedure articulates into three phases: 1. Framing the question What the problem is, what the system does, what the expected impacts of the decision at hand are.
2.
Selection of the appropriate methods and models Analysis of methods and models available and of ways to integrate/combine them.
3. Applications of the methods and interpretation of results. The approach has been developed in CALCAS project. A life cycle sustainability framework has been defined: a trans-disciplinary framework, aimed at linking life cycle sustainability questions to the knowledge needed for addressing them. [Heijungs et al. (2010) Life cycle sustainability analysis of products, materials and technologies. Towards a scientific framework for sustainability life cycle analysis. Polym Degrad Stab 95(3):422-428]
28-29 April 2010
5
Framing the question • Why is it important focussing on this phase? – Different types of sustainability questions exist, which require different methods and models (Guinée et al. 2009): micro
meso
macro
• Is Jatropa-based biodiesel from plants cultivated on set-aside land at a Brasilian farm for local use more sustainable than fossil-based diesel? • Should Sweden shift to 25% biofuel for road transport? At which time horizons? • Should the world economy endorse on a path to biofuels as major fuel for mobile applications?
• Framing the question means identifying at which level we set out our analysis: – What is the expected impact of the decision at hand? • Does the system analysed simply replace other systems on a small scale? • Is the technology expected to expand to many more applications on a large scale?
– Which is the time frame involved? 28-29 April 2010
6
Framing the question - Proposed approach • Use of qualitative and quantitative analyses; • Iterative process; • Involvement of different expertise
Qual. analysis
SUB-PHASE
MAIN ASPECTS TO CONSIDER
Technology characterisation
Technology description Performance characteristics Applications Time frame Technological relations
Analysis of interrelations with the sourrounding systems
Identification of trade-offs
28-29 April 2010
Environmental relations Physical relations Economic relations Cultural, institutional and political relations Scale and time frame of the expected changes Resources level Consumption level
Quant. analysis
7
Framing the question - Proposed approach (cont.ed) Technology characterisation How the technology works • technology of gasification treatment of waste tyres and utilisation of the carbon-rich char fraction obtained, together with a source of silica, for the synthesis of ceramic materials (SiC). The syngas obtained will be used for energy production. Its performances • Technology still at lab scale Its foreseen applications • SiC employed in a number of applications. Our interest: is SiC for filters for micro- and ultrafiltration: upcoming products not yet on the market. Time frame considered 28-29 April 2010
Analysis of interrelations Env. and tech. Relations • A preliminary and screening LCA study allowed the identification of those relations. Starting point for further refining the analysis. Economic relations • Preliminary and qualitative identification of main markets involved in TyGRE: cement, rubber, silica, alumina and silicon carbide produced via concenventional production. • Analysis of approaches in LCA literature and iIdentification of open questions. • Proposal to test different aproraches.
•
•
•
Trade-offs The introduciotn of a new technology in the market can meet already existing needs or hidden ones. IN both cases the structure of cnsumption is affected. Resource availability and patterns of consumption need to be considered. In TyGRE still to be done.
8
Economic relations - 1 • Economic relations describe the link between a product and the market, in which several interrelated mechanisms occur that have to be dealt with simultaneously. In TyGRE: • Use of analytical techniques to refine the analysis and to have more precise information related to: – The economic relevance of the markets directly involved, and the potential penetration; – Identification of the markets which – even if indirectly linked – might affect our system; – The technology-penetration scenarios, in order to understand the resulting product (thanks to the specific product characteristics resulting from the appplication of the new technology). 28-29 April 2010
9
Economic relations - 2 Different approaches have been proposed and need to be tested: • Industry sector analysis – Specific of the technology analysed, it does not seem to be as generalizable as required.
• Econometric models – The effects on a limited number of markets would be analysed, that of the main product, those of the env.-relevant inputs, and other linked market.
• IO analysis • Dynamic Systems and Complexity – A simulation model could be built where the introduction of a new technology is an exogenous shock in a nonlinear dynamic system. Results useful, for examples, to evaluate the effects of technology diffusion.
• “Target costing” – assumed target level of penetration of the new technology on the market, and related time frame in which this should be achieved possibility to estimate a target price and the resources that the technology can generate on the market and their ability to meet the investment required in the preparation and adaptation of the production structures presented. 28-29 April 2010
10
Rephrasing our question • Initial question: – Which are the environmental consequences due to the introduction of an innovative technology for waste-tyres treatment in the market?”
• New questions:
– Is the production of SiC by end-of-life tyre treatment more environmentally sustainable than the energy production from incineration of end-of-life tyre? – Would the technology developed for producing SiC for filters expand towards many more applications in an environmentally sustainable way? – To what extent can we meet our need for SiC in an environmentally sustainable way with TyGRE technology? High complexity Ceteris paribus assumption does not hold Several methods and models exist which can be applied Rebound effects need to be evaluated
28-29 April 2010
11
Preliminary conclusions and outlook • Besides modelling, the phase of framing the question is one of the most critical: here we define the question and the object of the analysis that determine which models and indicators should be adopted; • We suggest to use an iterative approach in this phase, which combine experts’ judgment with analytical models and methods contribution of different disciplines • More than one could provide useful insights: for this reason during the project different analytical approaches will be tested; • Next step: selection of models for evaluating the economic effects • Challenge: to find out or develop models which can reconcile the bottomup and the top-down approach: – The first would allow taking into account the specificities of the technology under study; – the second would allow a wider overview of the system, capturing the interrelations in which the technology is embedded. 28-29 April 2010
12
Thank you for your attention! Alessandra Zamagni LCA & Ecodesign Lab – ENEA Dipartimento Scienze Aziendali, Statistiche, Tecnologiche e Ambientali, G. d’Annunzio University – Pescara (Italy)
[email protected] +39 051 6098427
28-29 April 2010
13
1-Introduction
2-Method and analysis
3-Analysis: main findings
4-Conclusions
LCSA framework Goal and scope definition
Modelling
Interpretation
28-29 April 2010
14
