PARENT SESSION

6C - LCA and Economics: Input/Output Analysis
Poster Hall
8:30 AM - Tuesday, 29 April 2003
Chair: Huppes, G.¹, ¹
Co-chair: Norris, G.², ²

(TUP/218) Tools for consequential modelling.

Ekvall, Tomas¹, ¹ Chalmers University of Technology, Göteborg, Sweden, Sweden

ABSTRACT- Most decisions potentially affect material and energy flows in the society in a most complex manner. Life cycle assessment takes little or no account of these diverse consequences. If, for example, a manufacturer takes actions to reduce the electricity consumption, the electricity production will be reduced in the power plants at the marginal of the electricity supply system. Marginal effects can be analysed using static models or, more accurately, using dynamic optimising models. The reduced electricity demand of the manufacturer will contribute to keeping the electricity price down. This may result in an increase in the electricity demand of other consumers, offsetting part of the energy savings originally made. Consequences of elasticity can be analysed using partial equilibrium models that describe the relation between supply and demand of specific goods through the use of the concept price elasticity. Net energy savings and reduced electricity price means that less money is spent on electricity in the society. The money saved can be used for other activities that, most likely, use electricity as well as other energy and materials. This rebound effect also offsets part of the energy savings originally made. Impacts on economic activity can be analysed using general equilibrium models that describe the connection between capital, labour and resources in the economy. However, if knowledge of the actions taken by the manufacturer is spread, other manufacturers may be more prone to take similar actions because they become better informed about the more energy-efficient options. The efforts of the first manufacturer may also affect the values of other electricity consumers, inspiring them to focus more on energy-efficiency. Such effects will strengthen the effects of the energy savings originally made. Impacts on knowledge and values can possibly be analysed using tools of marketing experts. Hence, a more accurate modelling of the consequences of decisions requires a series of economic tools and concepts to be integrated into the tools for environmental systems analysis.

Key words: consequential modelling, life cycle assessment, economic models