Download Costs and Benefits

Costs and Benefits:
using
Life Cycle Assessment
and
Cost Benefit Analysis
to measure the
environmental effectiveness
of waste regulation
Gary Parker
Pira
IWM & LCA Workshop
13 April 2004
Pira’s use of CBA and LCA
• RDC and Pira undertook a study* for the
Commission in 2003 to analyse the costs
and benefits of packaging recycling
• Ecolas and Pira are undertaking a study
currently for the Commission on assessing
the environmental, economic and social
impacts of the EU Packaging Directive
• Pira is looking at environmental aspects
such as re-usable packaging and
environmental indicators
* “Evaluation of costs and benefits for the achievement of reuse and
recycling targets for the different packaging materials in the frame of
the packaging and packaging waste directive 92/62/EC”
Pira’s use of Life Cycle CBA
• Pira produced a Life Cycle Cost Benefit
Analysis model to compare recycling with
disposal options
• The model combined LCA and economic
valuation to determine environmental costs
and benefits
• The environmental cost was combined
with actual economic costs to produce a
total social cost
• The waste management option with the
lowest total social cost was considered to
be the preferable option
Pira’s use of Life Cycle CBA
• Pira produced specific case studies using
the model
• RDC extrapolated the findings of Pira’s
case studies to cover all packaging in the
EU
• Taking account of member states’ varying
population densities, waste disposal
options and packaging mixes, RDC
calculated optimal recycling targets for
each member state
CBA Methodology
DETERMINE SCENARIOS
MODEL
EXTERNAL
COSTS
MODEL
INTERNAL
COSTS
COMPILE
TOTAL
SOCIAL
COSTS
UNCERTAINTY/
SENSITIVITY ANALYSIS
INTEPRETATION
MODEL + VALUE
GROSS
EMPLOYMENT
CBA Methodology
“CBA attempts to quantify the total costs
and total benefits of a given policy option in
order to determine whether the policy is
worth pursuing”
• CBA includes costs which are external to
traditional direct monetary costs
• CBA is, in effect, trying to overcome the
fact that traditional economics are
imperfect
• CBA makes decision-making more
apparent
Economic Valuation of LCA:
How it works
LCA
Inventory
CO2
CFCs
Classification/
Characterisation
CBA
Economic
Valuation
Global warming in Kg of CO 2
equivalent
Ozone layer depletion (in Kg of
CFC11 equivalent)
HCFCs
CH4
‘Environmental score’
Photochemical oxidant formation
(in Kg of C2H4 equivalent)
HC
NOx
SO2
Acidification (in KG of SO2
equivalent)
Economic Valuation of LCA:
How it works
Unit
Valuation
GWP (kg CO2 eq)
€/KG CO2
Ozone depletion (kg CFC 11
eq)
Acidification
€/kg CFC11
0,68
€/kg H+
8,70
Toxicity Carcinogens (Cd
equiv)
€/kg Cadmium (carcinogenic effects only)
22
Toxicity Gaseous non
carcinogens (SO2 equiv)
€/kg SO2 from electricity production
1
Toxicity Metals non
carcinogens (Pb equiv)
€/kg Pb
62
Toxicity Particulates &
aerosols (PM10 equiv)
€/kg PM10 from electricity production
24
Smog (ethylene equiv)
€/kg VOC
0,73
Black smoke (kg dust eq)
€/kg smoke
0,66
0,01344
Economic Valuation of LCA:
How it works
Unit
Valuation
Fertilisation
€/kg expressed as NO2 mass equivalents
Traffic accidents (risk equiv)
€/1000km travelled on an average road
17
Traffic congestion (car km
equiv)
€ per 1000 car km equivalents
86
Traffic noise (car km equiv)
€ per 1000 car km equivalents
3
Water Quality Eutrophication
(P equiv)
€/kg P
Disamenity (kg LF waste
equiv)
€/kg waste in landfill
-0,7
4,7
0,037
Economic Valuation of LCA:
Limitations
• Lack of standardised methodology
• Imperfect raw data
• Wide range of valuation figures and
environmental cost figures
• Complex real-world economics
• Member states (and regions within
member states) differ greatly
• Any model of a complex reality is by
definition imperfect - but the alternative is
non-transparent, non-fact-based decisionmaking
“The only perfect model of the universe is the universe itself” - Einstein
Life Cycle CBA: Results
Min recycling rate
Max recycling rate
PET Bottles
450
400
Total social cost
350
300
250
200
150
100
50
0
Landfill
Separate
Kerbside
Collection /
Landfill
Bring
Scheme
Incineration
Separate
Kerbside
Collection /
Incineration
Bring
Scheme /
Incineration
Recycled at a sensible rate, all types of PET bottle recycling
are preferable to landfilling (in contrast, in the case of mixed
plastics, disposal is probably better than recycling)
Life Cycle CBA:
Sensitivity Analysis
Min recycling rate
Max recycling rate
PET Bottles
Total social cost
600
500
400
300
200
100
0
Landfill
Separate
Kerbside
Collection /
Landfill
Bring
Scheme
Incineration
Separate
Kerbside
Collection /
Incineration
Bring
Scheme /
Incineration
Sensitivity analysis reveals that the results are reversed if
landfill costs are low (eg UK or accession countries) and
economic valuation of PM10s (ie transport) is high
Optimum Recycling Rates?
• RDC used Pira’s case study results to
generate EU optimal recycling rates
Packaging
PET bottles
Steel packaging
Aluminium cans
Non-can alu packaging
Paper/board packaging
Beverage cartons
Mixed plastics packaging
Optimum Recycling Rate
Minimum
Maximum
35%
80%
15%
80%
31%
76%
3%
50%
55%
71%
0%
0%
0%
0%
Current Pira-Ecolas Study
• The new study* revolves around two
basic questions: has the Directive worked
in sustainable development terms, and how
can it be improved?
• The study looks at environmental, social
and economic impacts of the Directive
• Pira is focusing on environmental
aspects, Ecolas on economic aspects
* “Study on the implementation of Directive 92/62/EC
on packaging and packaging waste and options to strengthen
prevention and re-use of packaging”
Current Pira-Ecolas Study
The type of questions Pira is working on ...
Has the Directive achieved a positive, neutral or negative
effect on the environment?
Is any environmental effect of the Directive significant in terms
of the overall impacts of packaging and products?
What has been the effect of member states' packaging
prevention efforts?
Have fees such as the DSD’s encouraged packaging
minimisation?
How could packaging prevention be encouraged?
How could re-use of packaging be encouraged?
Have the Essential Requirements been effective?
How could a packaging environmental indicator work?
Packaging Environmental
Indicator (PEI)
• The PEI concept was championed by
Dorette Corbey MEP
“We should not continue to
encourage recycling as an end to itself.
It is environmental impact that
must be reduced”
• The aim was to measure packaging
environmentally and so contribute to a
Directive that encourages sustainability
rather than recycling
• The PEI is based on streamlined LCA
methodology
Packaging Environmental
Indicator (PEI)
• The concept may be difficult in practice:
 Packaging systems are as complex as the economic
and material systems of the products contained
 Environmental impact is difficult to measure even for
relatively simple systems
 In reality the most sustainable pack is that which
most efficiently facilitates the sustainability of the
product
• Recognising the conceptual and practical
difficulties, Pira is developing three PEI
systems for trialling by industry
LCA, CBA, PEI: DOA?
• LCA is at the root of developments such
as CBA and PEI
• All techniques share the same strengths
and weaknesses
• LCA and its derivatives will never be an
exact science and will inevitably arouse
controversy when applied to regulation
• The attempt is worth making, however,
because the alternative might be decisionmaking based on assumptions, emotive
responses, hidden agendas or political
expediency
LCA and Sustainable
Development
Developing new policy tools is never easy or
without controversy, but let us not lose sight of
the fact that the ultimate aim is Sustainable
Development in line with the EU’s Sixth
Environmental Action Programme:
“Environmental policy must
be innovative in its approach and
seek new ways of working”