From Life Cycle Costing to Economic Life Cycle Assessment—Introducing an Economic Impact Pathway

Abstract

Economic activities play a key role in human societies by providing goods and services through production, distribution, and exchange. At the same time, economic activities through common focus on short-term profitability may cause global crisis at all levels. The inclusion of three dimensions-environment, economy, and society-when measuring progress towards sustainable development has accordingly reached consensus. In this context, the Life cycle sustainability assessment (LCSA) framework has been developed for assessing the sustainability performance of products through Life cycle assessment (LCA), Life cycle costing (LCC), and Social life cycle assessment (SLCA). Yet, the focus of common economic assessments, by means of LCC, is still on financial costs. However, as economic activities may have a wide range of positive and negative consequences, it seems particularly important to extend the scope of economic assessments. Foremost, as the limitation to monetary values triggers inconsistent implementation practice. Further aspects like missing assessment targets, uncertainty, common goods, or even missing ownership remain unconsidered. Therefore, we propose economic life cycle assessment (EcLCA) for representing the economic pillar within the LCSA framework, following the requirements of ISO 14044, and introducing an economic impact pathway including midpoint and endpoint categories towards defined areas of protection (AoPs). We identify important target ratios by means of economic AoPs, which drive economic activities on the macro-and microeconomic level. Furthermore, we provide suggestions for midpoint and endpoint indicators representing the defined categories. With the presented EcLCA framework, a first step towards the inclusion of economic impacts within LCSA has been made. Relations between economic activities and resulting consequences are displayed, going beyond the cost-driven view of classical LCC. Further research and fine-tuning of the identified midpoint and endpoint categories and related indicators is, however, needed to enable a valid and consistent assessment basis for fostering the practical implementation of EcLCA and LCSA.

Life Cycle Sustainability Assessment Approaches for Manufacturing

“…They are, for example, oversimplifying the economic dimension down to a matter of costs, ignoring causalities, or unreliable data in connection with conceptual confusions (Neugebauer et al 2016). To date, LCC in the context of LSCA is still not commonly implemented in industry, due to methodological confusion with other similar concepts, such as "total cost accounting" (Glucha and Baumann 2004).…”

“…Yet, to date, SLCA and LCC have not yet reached a mature level of assessment. Their main methodological difficulties lie in insufficient guidance on indicator selection, missing sets of defined impact categories and areas of protection (AoPs, also called safeguard subjects), as well as missing links between indicators, impacts and AoPs (Valdivia et al 2012;Lehmann 2013;Neugebauer et al 2015Neugebauer et al , 2016. To overcome these challenges, new approaches have been proposed.…”

Trade-Off between the Social and Environmental Performance of Green Concrete: The Case of 6 Countries

“…Social LCA is relatively a newer tool related to life cycle thinking (LCT) [20], where various efforts are being made such as the development of social impact assessment methods [21,22]. Product Social Impact Life Cycle Assessment database [23] (hereafter PSILCA) is one of the few databases available that compiles the life cycle inventory (LCI) for social issues which is defined in the guideline from UNEP-SETAC life cycle initiative [24].…”

A New Dynamic Pricing Model for the Effective Sustainability of Perishable Product Life Cycle

“…The studies are contributed to the literature by introducing different points such as price sensitive customer approach, return products, stock levels and also seasonal products. Although Elmaghraby and Keskinocak [12] provide a detailed review of dynamic pricing in different scenarios for different inventory situations and customer classification, the same area continues to be discussed in recent years [4,[13][14][15][16][17][18][19][20][21]. However, the discounting and replenishment decisions are not modeled in these studies, except Geoffrey et al In addition to these areas of works, some studies categorized the selling price time periods into terms; however, generally short term is preferred [22][23][24].…”