A quick guide to and

LCA

Life Cycle Assessment

CBA in waste Cost Benefit Analysis

management

Foreword New sophisticated and ever more refined tools and models are popping up regularly in today’s waste management world, a world which is getting more and more complex. It is difficult for non-expert stakeholders in this busy and rapidly changing setting to distinguish between rock-solid science, belief and conviction. Who and what should we believe? What is the right decision for our concrete waste management challenges? Why can’t experts just provide us with the right answers? And how can we explain to our citizens why the eco-friendly solution which was correct yesterday, is suddenly no longer valid?

The waste disposal company of 1898 – R98 – and the City of Copenhagen cooperate closely in the planning and safeguarding of waste management services in Copenhagen. We make use of various decision support tools and invest significant resources into planning our services. As you will see later in a case study from a recent project, this is not an easy task. Therefore we have supported this booklet financially in the hope that it will bring some clarification and better understanding into the sometimes vigorous debate over what is right and what is wrong. We wish you pleasant reading!

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Niels Jørn Hahn

Klaus Bondam

Managing Director R98 Foundation

Mayor for the Environment City of Copenhagen

A Q U I C K G U I D E TO LC A A N D C B A I N WA S T E M A N A G E M E N T

Introduction In Europe, waste managers and waste policy-makers are increasingly demanding tools that can offer them science-based arguments to support their decisions. This booklet explains the use of two of the most popular decision support tools today: Life Cycle Assessment (LCA) and Cost Benefit Analysis (CBA). The use of these tools has been challenged recently because they can apparently lead to contradictory answers to the same questions, for instance some CBAs recommend that waste paper is recycled while other CBAs recommend that it is incinerated. The Danish Topic Centre on Waste and Resources is happy to present this booklet to non-expert stake-

A Q U I C K G U I D E TO LC A A N D C B A I N WA S T E M A N A G E M E N T

holders in the waste management sector, be it policymakers, decision-makers in industry, consultants or journalists. Drawing from the Topic Centre’s expertise with these tools, this booklet explains the basic theory of the tools, the reasons for these apparent contradictions, possible pitfalls, and how the tools can and should be used in the waste management sector. It is not the purpose of this booklet to compare LCAs and CBAs, but to make the non-expert stakeholder wiser about the advantages and limitations of both tools, and how to use the results in a critical and informed manner.

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Looking for the right tools Sometimes, a citizen can put a waste management expert into real trouble by formulating a very simple question such as: should I throw my used paper in the waste bin, or into a special recycling container?

PA P E R

Choice ON

LY

The question is simple, but a waste management expert requires a profound knowledge of the local waste management system in order to produce a simple answer such as of course, recycle! or don’t bother, just throw it to the dustbin! Our environmental intuition tells us that we live in a world with limited resources, and we should recycle paper, like many other resources. For almost two decades, this belief has been the guiding principle of waste policies in the EU, and has told us that we should follow the so-called waste hierarchy. 4

This hierarchy, however, is more a general principle than a concrete methodology to be followed to the letter in modern waste management. Nowadays, waste managers have to answer complex questions such as whether it is environmentally preferable to use refillable glass bottles, or single-use metal cans. In such cases, the hierarchy is too simple a concept to provide an answer since both options lie at the same level in the hierarchy. There are other specific cases where the hierarchy is too general to be of any use, such as the treatment of waste glass. Glass incineration with energy recovery is in fact no better environmentally than landfilling, as the hierarchy would otherwise indicate. The European Commission is aware of this deficit, and is in the process of developing new European waste policies which attempt to tackle the limitations of the waste hierarchy by promoting the use of life cycle thinking and solid environmental and socio-economic documentation as a foundation for future waste management choices. In Europe, LCA and CBA stand out as two of the most frequently used decision support tools for waste management. These tools can make use of life cycle concepts, and establish comparisons between waste management systems before policies are set, and considerable investments made. Their use, however, is not without controversy. Being A Q U I C K G U I D E TO LC A A N D C B A I N WA S T E M A N A G E M E N T

Waste prevention

Reuse/ Recycling/ Energy recovery

Incineration without energy recovery/ Landfilling

Conclusions from reviewed LCAs and CBAs on waste paper management(1): Most LCAs concludes that: Paper recycling is in most cases preferable to incineration (with or without energy recovery) or landfilling, and incineration is preferable to landfilling Most CBAs concludes that: In some studies, recycling is preferable to incineration (with or without energy recovery), while incineration with energy recovery is preferable to recycling in other studies. Landfilling is the worst option. (1) Villanueva et al. (2006) ‘Paper and Cardboard – Recovery or Disposal?. Technical report Nr. 5, European Environment Agency, Copenhagen, Denmark

WA ST E H I E R A R C H Y powerful tools, both LCA and CBA are able to tackle complex problems of comparison of waste scenarios, and can provide detailed and useful insights to help waste authorities make choices over available management alternatives. However, the complexity of the tools and the ambitious nature of the questions they aim to answer carry a risk of obtaining differing results, dependent on the numerous assumptions such studies have to include. Some published LCAs and CBAs have presented quite different recommendations for the same set of circumstances. In addition, when reporting on the main conclusions of a CBA or LCA study, the media, in the quest for a black and white message, often exclude critical qualitative A Q U I C K G U I D E TO LC A A N D C B A I N WA S T E M A N A G E M E N T

observations and warnings with respect to assumptions that have been made during the study. Such simplifications contribute even further to the confusion. This booklet presents the basic concepts of LCA and CBA, and identifies and summarises the strengths, weaknesses and apparent contradictions of these tools within waste management and waste policy making. Waste paper management is used as an example to illustrate how LCAs and CBAs have been applied. The message for policy makers and waste managers is clear: these tools are useful and are among the most comprehensive we currently have, but their results often need careful and nuanced interpretation in order to be applied correctly. 5

LCA

What is LCA and CBA? LCA and CBA are two methodologies that can be used to assess the environmental and/or socio-economic consequences of a decision, for instance whether the citizens in a community or a country should recycle or not their waste paper, glass bottles, and beverage cans. However, these two tools provide the decision-makers with different information. A CBA’s objective is to maximise the overall utility to society, whereas an LCA aims at minimising the harmful impacts on the environment. Since the methodologies are answering different questions, they should not be considered as competing, but rather as complementary tools.

An LCA evaluates all known environmental impacts of a product, material or service throughout its entire lifetime. It is an ambitious methodology, and it covers all stages in the life cycle of the products or systems investigated, from the cradle (material extraction) to the grave (final disposal). It attempts to cover all physical exchanges in the life cycle of a product with its surroundings, be it inputs of auxiliary materials and energy consumption, or outputs of emissions, waste and usable energy. The results are collected in a so-called life cycle inventory, which for a 40g paper sheet, for example, may be expressed as the consumption of 100g of wood and of 0.25kWh energy, generation of 0.1kWh energy, emission of 64g CO2 and 0.1g SO2 , along with a host of other inputs and outputs. In an ideal LCA, all inputs and outputs should be covered in the inventory. In practice, the completeness of the inventory is limited by the analyst’s knowledge of the interactions of the waste management system with society and the environment.

LCAs and CBAs are decision support tools and not decision making tools, because they provide information that normally needs to be complemented with legal, social, economic or technical information before decisions are made. 6

A Q U I C K G U I D E TO LC A A N D C B A I N WA S T E M A N A G E M E N T

Life cycle stages of paper

INPUT Energy consumption, materials, chemicals

Energy production, secondary materials, emissions to air, water and soil

Forestry

100 g wood 0.25 kWh

OUTPUT

Production Recycling

0.1 kWh 64g CO2

...

0.1g SO2

Use

5.7g CH4

...

...

Disposal

...

...

...

...

...

Incineration / landfillling

100 g g 100 100 g wood 0,25 wood 100 g wood kWh0,25 wood

SUM OF INPUTS

+

0,164g kWh CO2

=

T O TA L S U M ( L I F E C YC L E I N V E N TO R Y )

SUM OF OUTPUTS

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Once an inventory of all inputs and outputs has been collected, these are grouped into potential impact categories such as resource consumption, climate change, acidification or toxicity, and translated into environmental impacts following natural science causality knowledge. For instance, with respect to climate change, methane emissions are multiplied by a factor of 21 to convert them to carbon dioxide (CO2) equivalents, since the climate change impact potential of 1 kg of methane is 21 times that of a kg of carbon dioxide. The impacts may be grouped further and weighted against each other to derive a single impact potential score such as eco-points or ecological footprint, which is easier to communicate in a decision-making context. For this aggregation process, an LCA would use references for comparison based on the functionality of the products or services being compared, and would use units such as person equivalents (that is, the amount that a citizen emits of a given substance per year), to convert emissions to a single indicator. Such aggregation inevitably carries with it a certain degree of subjectivity, and requires decisions over which impact is more important in a policy context - for instance is climate change more or less important than human toxicity?

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CBA A CBA evaluates the costs and benefits to society of a project, policy or programme, for example implementing a given waste policy or building a treatment facility. If the net benefit is positive, the project should, as a general rule, be implemented. A clear advantage of the CBA is that the result is expressed in a well-known measure, money. A CBA also starts with a description of the system, its inputs and outputs, and an inventory of these. A CBA includes all effects related to the implementation of the project or policy, i.e. the same inputs and outputs as the LCA, but in addition it includes investments, manpower, employment, and effects on human health and safety. Subsequently, a value is ascribed to all these effects, converting them into monetary units. The various costs and benefits may occur at different times in the future, which is why a so-called net present value is calculated to illustrate the aggregated value in today’s prices. For this calculation, a discount rate is used which reflects the degree to which society prefers to consume and gain benefits today rather than tomorrow. The higher the discount rate the lower the weight assigned to future costs and benefits compared to costs and benefits experienced today.

A Q U I C K G U I D E TO LC A A N D C B A I N WA S T E M A N A G E M E N T

Inventory INPUTS

OUTPUTS

100 g g 100 100 g wood 0,25 wood 100 g wood kWh0,25 wood

+

And for CBA also: • Investment • Man-hours • ...

LCA: aggregation in impact categories, normalisation • Resource input (person-reserves) • Climate change (kg CO2-equivalents/capita/year) • Acidification (kg SO2-equivalents/capita/year) • Human toxicity (m3 air/capita/year) • ... • ... • ...

100 g g 100 5,7g CHSO 100 wood 4g 2 0,1g wood 0,164g kWh wood CO2

And for CBA also: • Health effects • Landscape value • ... • ... CBA: aggregation, monetisation, discounting • Investment (euro) • Man-hours (euro/hr) • CO2 (euro/kg) • SO2 (euro/kg) • Human life losses (euro/accident) • Man-hours in paper sorting (euro/hr) • Exports/imports (euro) • ...

Evaluation

Evaluation

Sensitivity analysis and Interpretation of results

Sensitivity analysis and Interpretation of results

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Objective Focus Time scope

Geographical scope

LCA

CBA

Goal and scope definition

Goal and scope definition

Minimise the environmental impact

Maximise the utility to society

Environmental impacts

Economic impacts

Different impact horizons for different impact categories

The project’s time horizon

Most offen national, but can be broader if there are international treaties or ethical reasons to do so

Global

System scope

All known interactions in the life cycle

Interactions with known economic impact

Impact scope

All known physical exchanges

All known physical exchanges and nonphysical impacts

Inventory Direct and indirect exchanges with the physical surroundings are followed iteratively

Evaluation of impacts Basis of comparison

Intermediate steps

Result

Sensitivity analysis

Based on functionality

Characterisation, Normalisation, Weighting

Mainly direct effects

Evaluation of impacts Based on market relation (individual’s preferences) Monetisation of inputs and outputs, aggregation, definition of discount rate, calculation of net present value and indirect known effects.

Set of environmental impacts

Net benefit

Compulsory

Recommended. Lack of data is represented by zero

Interpretation

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Inventory

Interpretation

Like in LCA, an actual CBA differs from an ideal CBA. This is, for example, seen in the geographical coverage of CBAs, which most often cover the activities and emissions inside the national or regional borders of interest. Emissions and resulting impacts in other countries are usually ignored, mostly because traditionally a government is only concerned with maximising the socio-economic benefits for its own citizens. There can be exceptions when an international treaty has been joined, or ethical reasons recommend it. The similarities in the stages of LCA and CBA are illustrated on the previous page. Both methodologies have a first phase of goal and scope definition, followed by the assembly of an inventory of inputs and outputs. Both have a stage of evaluation of impacts, and with an interpretation of the results. However, it is in the detail of the methodologies such as in their focus, perspective, scope, and basis for comparison that the differences are observed, justifying the remark that these methodologies are not perceived as competing, but as complementary. A Q U I C K G U I D E TO LC A A N D C B A I N WA S T E M A N A G E M E N T

Standardising the tools Both methodologies are vulnerable to misuse in their current status of development, through, for example, changing some assumptions, or selecting certain data sets. This was one of the reasons for the standardisation process of LCA, which was initiated in the early 90s and has resulted in the ISO 14040 standard series. Standardisation has made LCA less manipulable, and CBA methodology might gain from going through a similar standardisation process. Nevertheless, standardisation will not eliminate all problems, because making assumptions and data choices is an intrinsic part of these comparative studies. However, such assumptions and data choices can be better or worse documented and justified. Standardisation only makes sure that these assumptions are fully documented and are justified with respect to certain criteria.

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C A S E STU DY C A S E STU DY C A S E STU DY C A S E STU DY C A S E STU DY Real-life use of environmental and economic assessments Due to new statutory requirements on separate collection of

2. Collection for recycling at the existing glass bottle banks

plastic and metal packaging, R98 - the company carrying out

(also implemented at pilot scale).

waste collection in Copenhagen, the City of Copenhagen, and

3. Kerbside collection for recycling.

the Technical University of Aalborg have carried out a pilot scale

4. Centralised collection at recycling centres.

experiment where beverage containers of plastic and metal

5. Separate collection in containers placed next to the existing

were collected together with glass waste in the existing glass

glass bottle banks.

bottle banks. The results of the experiment were subsequently extrapolated and compared with alternative collection options to

Methods and results

assess how collection of single use beverage packaging of

An environmental assessment, conducted as an LCA, and an

plastic and metal from the 500,000 inhabitants can be carried

economic assessment, mapping all direct economic costs and

out with the lowest environmental and economic costs.

benefits, were carried out separately, and the results were compared in a combined environmental and economic assessment.

The environmental and economic aspects of five scenarios were studied:

The environmental evaluation using the LCA method conclu-

1. Collection together with residual waste, which is then inci-

ded that the third scenario, kerbside collection of plastic and

nerated (current situation).

metals, is preferable from an environmental point of view.

RESULTS. Change compared to the baseline situation (scenario 1)

Environmental assessment Scenario (compared to scenario 1)

Plastic and metal waste collected for recycling (% of potential)

Climate change (tonne CO2-eq.)

Acidification (tonne SO2-eq.)

-0.40

Economic assessment Total cost of the scheme (1000 € per year)

6.4

Cost of avoided climate change (1000 € per tonne avoided CO2-eq.)

2.4

Cost of avoided acidification (1000 € per tonne avoided SO2-eq.)

2

4.3

-110

3

13

-230

-0.60

1063

8.7

4.6

1772

4

0.9

-30

-0.10

94

10.5

3.1

940

5

3.2

-70

-0.20

558

18.4

8.0

2790

12

260

Cost per amount of collected metal and plastic (1000 € per tonne)

Combined assessment (cost per avoided environmental effect)

650

C A S E ST U DY

C A S E STU DY C A S E STU DY C A S E STU DY C A S E STU DY C A S E STU D

Defining the system boundaries This case study exemplifies the importance of system boundary definition. The system boundaries of the LCA are wider than in the economic assessment, because the latter only includes changes in activities that are carried out by the City of Copenhagen or their subcontractors. For example, the emissions from transportation to a public collection site are included in the LCA, while the expenses for this are not included in the economic assessment.

Unfortunately, this scenario was identified as the most expen-

Another surprising lesson was that the amount of plastic used

sive collection scheme in the economic evaluation. The highest

for the manufacture of bottle banks is relatively large compa-

recycling rate per Euro used was achieved in the second

red to the amount of plastic bottles collected for recycling. In

scenario, collection at the existing bottle banks.

the future, bottle banks used in the City of Copenhagen will therefore be recycled, instead of incinerated.

The combined environmental and economic assessment was performed as a cost-effectiveness analysis, where the results

Furthermore, during the analysis of the results, it became clear

from the environmental and economic assessments are kept in

that factors not included in the study had great importance

their original units instead of converting all costs and benefits

when decisions are made at the political level. These additional

to monetary units as in a CBA.

factors included service level, the need of space in building courtyards, or aesthetic issues such as placement of containers

The second scenario, collection of plastic and metal at the exi-

in the urban landscape.

sting bottle banks, proved to be the scenario with the lowest environmental impacts per Euro. This was eventually chosen as

Being decision support tools with limited scope, real-life envi-

the new scheme for Copenhagen.

ronmental and economic assessments cannot always encompass all factors necessary for decision-making. However, in the

Lessons learned

light of the importance such additional factors had in this study,

The study provided useful information on environmental and

the lesson here is that efforts should be made to spot these

economic consequences of choosing a new collection scheme,

factors as early as possible and if possible before the studies

and in addition important lessons were learned. For instance,

are undertaken, to avoid that the study’s results become use-

the experiments made with collection of plastic and metal

less, and the considerable investments made in them are lost.

containers in the glass bottle banks indicated that the rate of breakages of glass bottles and jars would decrease, because plastic bottles cushioned the impacts of glass. C A S E ST U DY

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Using LCAs and CBAs in waste management LCAs and CBAs translate the environmental (CBAs also the non-environmental) benefits and costs of the different options into measurable physical or economic units. Waste policy makers and waste management experts can use LCA and CBA for several purposes. Most frequently, to compare two or more alternative options for the treatment of a waste stream, such as the disposal or recycling of paper. The questions answered by such studies have been complex, examples being: •

•

•

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When diverting paper waste from landfills, should a local authority invest in a recycling plant, a composting plant, or an incinerator? In which activities should a local authority concentrate its budget: A prevention campaign? An increase in capacity of the recycling centres? A modernisation of the flue gas cleaning system of the local incineration plant? In which of these areas can the largest environmental improvement be achieved? In which of these areas is there most value for money, that is, the largest environmental improvement per euro invested? Which is the material with largest environmental benefits through recycling, is it paper, plastic, steel, aluminium, glass, or other?

Applied to single products, policies or projects, LCAs and CBAs can be relatively trouble-free. The difficulty often begins when they are used to compare waste management systems, heat, power, secondary materials such as recyclables and emissions. Waste management options are complex systems of collection, distribution, treatment, and disposal, and are connected to the rest of society through inputs and outputs (see overleaf). Comparing such complex systems requires that the systems compared are actually comparable, that is, that they deliver exactly the same service and benefits to society. Tradition has it that one cannot compare apples and pears. However, LCA and CBA can do precisely that, provided that the properties of both fruits, which can be quantified and thereby compared, are identified. An LCA would limit the comparison to measurables such as the content of water, calories and vitamins, excluding from the comparison the properties which give no meaning to compare in physical units, such as colour, flavour, or texture. Conversely, a CBA would overcome this hurdle by assigning a monetary value to all properties, thereby making it possible to include them in the comparison.

A Q U I C K G U I D E TO LC A A N D C B A I N WA S T E M A N A G E M E N T

The rest of the technosphere and the environment Energy generation Use of land and wood for other purposes

The paper system Emissions Incineration and landfillling

Emissions

Forestry

Effects on the treatment capacity

Virgin paper manufacture Energy consumption/ generation

Choice

Recycling

Emissions

Energy consumption

An LCA analyses all known physical interactions of the paper system with its surroundings.

A Q U I C K G U I D E TO LC A A N D C B A I N WA S T E M A N A G E M E N T

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The rest of society and the environment Landscape alteration Energy generation Use of land and wood for other purposes

The paper system Emissions Incineration and landfillling

Emissions

Energy consumption/ generation

Forestry

Effects on the treatment capacity

Virgin paper manufacture

Choice

Nuisance due to odours, noise, NIMBY, landscape alteration

Loss of human lives in accidents Employment

Recycling

Balance of imports/exports Time used for home sorting and transport to containers Emissions

Energy consumption

A CBA analyses all known physical interactions of the paper system and includes all relevant effects which can be monetised. 16

A Q U I C K G U I D E TO LC A A N D C B A I N WA S T E M A N A G E M E N T

If asked for the best option for the management of 1 kg of waste paper, both LCA and CBA would isolate and quantify the properties of interest to the system, and would both include benefits such as the energy generated in the incineration of the paper, and the additional emissions from the paper recycling process. Including all such properties makes the comparison possible, relevant, and fair. The CBA methodology would in addition include interactions with the surrounding system such as the losses of human lives, employment, effects on landscape, odours, or the time used by citizens for sorting the waste paper (see figure on previous page). These issues cannot currently be quantified in LCAs. Complete LCAs and CBAs require that the analyst knows the connections between the waste system and its surroundings. Two different expert analysts working on the same project may report transparently the assumptions that have been made following ISO standards or guidelines, but they may still make different

A Q U I C K G U I D E TO LC A A N D C B A I N WA S T E M A N A G E M E N T

choices in a large number of issues (see figure next page). Among the most relevant is the definition of the system boundary surrounding the processes which are to be included in the study. Differences in these boundaries are one of the most frequent reasons why two studies can arrive at different conclusions despite trying to provide answers to the same questions. The results of CBAs and LCAs are always dependent on the data used and the assumptions made. The extent to which such choices have influence on the final results can be unveiled through an external review and a sensitivity analysis, quantifying the importance of each assumption and/or omission. The two fundamental requirements of an LCA or CBA to ensure robustness and reliability are: • •

That the study is transparent That the study includes a sensitivity analysis of key assumptions, if possible followed by an external independent review.

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Analyst 1 has focused on paper disposal and its effects, but has excluded the upstream phases of paper production, as well as time consumption in paper sorting and transport to containers.

The rest of society and the environment

Landscape alteration

The paper system

Energy generation

Use of land and wood for other purposes Incineration and landfillling

Emissions Emissions

Forestry

Virgin paper manufacture Energy consumption/ generation

Choice

Nuisance due to odours, noise, NIMBY, landscape alteration

Loss of human lives in accidents

Employment

Effects on the treatment capacity

Recycling

Balance of imports/exports Time used for home sorting and transport to containers Emissions Energy consumption

Analyst 2 has included all lifecycle phases of paper, but does not describe the impacts of disposal by assuming that paper disapears for unlimited time in landfills. 18

Heaps and heaps of waste … data The previous sections have shown how difficult it can be to give a qualified answer based on life cycle thinking to an apparently simple question such as recycling versus disposal. A good understanding of the links between the waste system and its surroundings is not the only challenge the analyst faces. Once such links have been identified, they must also be quantified. For example, where paper is being incinerated to produce electricity, how much electricity is actually generated per kg of paper? Which energy sources would otherwise be used to produce that electricity if the paper was recycled instead? Would it be coal, natural gas, nuclear fuel, wind power, or hydropower?

•

The amount and composition of paper waste. From the total amount of waste paper generated, how much is generated in households? How much in industry? How much in offices? How much is collected in different systems; bring and kerbside? How much is incinerated and how much recycled? What is the content of wood fibres and the content of ink? LCAs and CBAs require very specific waste data which are frequently not available, and have to be calculated, or assumed.

•

The fate of the chemicals in paper. When a bag full of mixed municipal waste containing plastics, food, paper, wood, and textiles is landfilled, how much of the methane gas from landfills originates from paper? Will the methane from paper be released immediately or with a time lag? What about the chlorine emissions to rivers from paper manufacture? Do they have effects on human mortality? Science’s current knowledge about such cause-effect relationships is limited, and the best mathematical models capture only parts of the complex environmental systems, sometimes with large uncertainty ranges.

•

The interactions of the paper system with the surroundings. Our societies are complex, and our knowledge of the interactions in them is limited. What happens when a community switches waste

Providing a qualified answer is about identifying and quantifying flows in waste management systems and other related systems such as electricity, which are indeed complex. Defining a system such as the life cycle of a paper sheet requires collection of data on:

A Q U I C K G U I D E TO LC A A N D C B A I N WA S T E M A N A G E M E N T

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paper management from incineration to recycling? Incineration energy decreases, so what is the type of energy source that covers the gap created by paper? Is it coal, natural gas, hydropower, nuclear power, wind power, or a mix of them? What are the consequences for the incineration plant, which now has free capacity? Is this filled with mixed waste from neighbour communities, which otherwise would be landfilled? How much energy for production of virgin paper pulp is saved? Does this wood saving take place in Finland or in the Amazon? •

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Valuation of interactions. In the CBA, each resource input and output is assigned a price. For traded goods and services such as a sheet of paper, the prices are usually known from market prices. However, for the goods and services that are not traded in the market such as clean air or the beauty

of a landscape, a value has to be estimated. How precise is the valuation? Representative valuations are costly to produce, and therefore valuations are often used, and reused, for years in many other studies. This practice implies uncertainties: can valuations be transferred to another system, another country, and for how many years is a valuation valid? The need for such large data mountains is the consequence of the ambition of LCA and CBA to be holistic tools, addressing all environmental impacts, and following the lives of all substances from cradle to grave. Real-life studies tackle this by using expert assumptions and simplifications to cover the data gaps. Current reallife LCAs and CBAs are therefore still a step away from an ideal and complete coverage of the environmental and economic impacts of projects and policies.

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Can one make use of the results of these tools today? The answer is: yes, but with a pinch of salt. LCA and CBA are among the most comprehensive and ambitious tools currently developed for decision support. These tools often provide valuable and interesting information for waste management. Nevertheless, they have important limitations. LCA is a systematic accounting of all known quantifiable inputs and outputs of a project, both national and international. The aim is ambitious, and it comes at a cost, namely large difficulties in getting reliable information on all exchanges between the waste system of interest and the rest of society. Interpretation is not easy either, because we do not know enough about the actual effects of the different emissions on humans and the environment, and because the methodologies to aggregate all emissions and impacts are still controversial. Among the major benefits of a CBA is its theoretical capability to comprise all relevant monetary effects. Monetary valuation is a powerful approach that allows the aggregation and comparison of very non-homogeneous impact categories. Subsequently, the results of a CBA can be presented using a single monetary value such as euro, which is readily understandable and convenient for decision-making.

A Q U I C K G U I D E TO LC A A N D C B A I N WA S T E M A N A G E M E N T

The backside of this euro coin is that some environmental effects cannot be assigned a value, either because of ethical reasons or because the effect is irreversible whereby it may not make sense to value the loss of it. Moreover, some effects such as odours cannot be quantified, which is an obstacle to valuation. As a result, a CBA rarely includes all environmental effects. A way of partly overcoming this problem is to present all the non-monetised environmental effects together with the result. However, such information may be ignored and the monetary value may often be considered as the bottom line. From time to time, CBAs and LCAs are presented as objective tools, serving results ready for use to waste managers. However, the reader should now be aware that there is always a gap between an ideal, complete description of waste systems and its interactions, and how far current LCA and CBA analysts can describe these systems. Frequently, both methodologies provide only partial environmental and economic pictures of waste systems, and as a result it is important to bear in mind that they are decision support tools, not decision making tools.

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Next time you read ... ... an LCA on waste management, remember to check: • Is it compliant with the ISO 14040 standards?

22

•

Does it analyse a single waste option (usually problem-free) or does it compare different options (usually tricky)? Are the properties that are the basis of the comparison clearly described?

•

Waste management LCAs are usually geographysensitive. If you wonder about the application of the results to your area/region/country, are there any important assumptions that may limit this extrapolation?

•

Are the boundaries of the systems clearly described? For instance, are the connections to the energy supply system, and the energy sources substituted by incineration and landfill gas combustion, clearly described and justified?

•

Are all upstream processes of material production included? Is the material production reduced appropriately when materials are recycled?

•

Does disposal mean forgetting, or are for instance all the long-term emissions from landfilling included?

•

Does the study include a sensitivity analysis to the main assumptions made?

•

Has a critical, independent review been performed?

... a CBA on waste management, remember to check: • Are effects that occur outside the geographical boundary included? For instance, are the effects of exporting waste for treatment included? •

Does it cover all relevant exchanges with the surroundings? Does it for instance include substitution of energy from incineration and savings of material production through recycling?

•

Does it include the citizens’ time spent on separation/transport of waste? Does it value this appropriately?

•

What is the social discount rate used?

•

Which valuation studies are used to monetise the environmental effects? Are they old? Do they represent well the situation in the other country? Which adjustments have been made before the results from other studies have been transferred to the present study?

•

Are the non-monetised environmental effects presented together with the result?

A Q U I C K G U I D E TO LC A A N D C B A I N WA S T E M A N A G E M E N T

Looking for more information? Read more about the use of LCA and CBA on waste management on the websites of the European Topic Centre on Resource and Waste Management: http://waste.eionet.europa.eu/ and the OECD: www.oecd.org

© Danish Topic Centre on Waste and Resources Højbro Plads 4 DK-1200 Copenhagen K Phone: +45 33 92 76 90 Fax: +45 33 32 22 27 Email: [email protected] Website: www.wasteandresources.dk Main authors: Alejandro Villanueva, Karen B. Kristensen and Nanja Hedal. With thanks to our colleagues of the Topic Centre for their input. Printed by TrykTeam A/S on Swan labelled paper. Printed in Denmark Layout: Design Konsortiet Illustrations: Lasse Bo No of copies: 1,000 First edition 2006 Financed by The R98 Foundation and The City of Copenhagen A Q U I C K G U I D E TO LC A A N D C B A I N WA S T E M A N A G E M E N T

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• Learn what LCA and CBA is all about • Understand why experts arrive at different conclusions • Learn to read and use waste LCA and CBA results critically