1 Systems Analysis Laboratory Helsinki University of Technology How to Benefit from Decision Analysis in Environmental Life Cycle Assessment Pauli Miettinen and Raimo P. Hämäläinen Otakaari 1 M, FI Espoo European Journal of Operational Research, Vol. 102, 1997, pp

2 Systems Analysis Laboratory Helsinki University of Technology What is Environmental Product Life Cycle Assessment A tool to support environ- mental decision making Quantification of energy, material and waste flows over the product’s whole life cycle Evaluation of environmen- tal impacts of those flows

3 Systems Analysis Laboratory Helsinki University of Technology LCA Organisations and Journals Organisations: –ISO - International Standardisation Organisation –SETAC - Society for Environmental Toxicology and Chemistry Journals: –Chemosphere –Environmental Toxicology and Chemistry International Journal of Life Cycle Assessment –Journal of Cleaner Production

4 Systems Analysis Laboratory Helsinki University of Technology Goal Definition and Scoping Planning part of an LCA study –Purpose –Scope –Basis for comparison, i.e. the functional unit –Data collection and quality assurance plan Determines the following phases

5 Systems Analysis Laboratory Helsinki University of Technology Inventory Analysis Quantification of inputs and outputs crossing the system boundary Problem areas: –Data amount and quality –Cut-off rules –Allocation Result is a long list of inputs and outputs of different nature –Difficult to interpret

6 Systems Analysis Laboratory Helsinki University of Technology Product Life Cycle Assessment and System Boundaries

7 Systems Analysis Laboratory Helsinki University of Technology Impact Assessment Interpretation of the inventory results –Methods: Critical volumes, EPS, Eco-scarcity, Tellus,... –Environmental theme method: classification, characterisation, (normalisation) and valuation How far to aggregate the inventory results? –One figure or contribution to a set of environmental problems Objective and subjective information should be used separately

8 Systems Analysis Laboratory Helsinki University of Technology Impact Categories

9 Systems Analysis Laboratory Helsinki University of Technology Improvement Assessment Systematic search for effective ways to reduce the total environmental load –Ensure that improvement in one part of the product’s life cycle doesn’t lead to larger increase of impacts in the others

10 Systems Analysis Laboratory Helsinki University of Technology Three Types of Data in LCA Process data for inventory analysis –Material and energy requirements as well as emissions per unit output Impact data for transforming the inventory results to environmental impacts –Impacts of substances to different environmental problems Preference data for planning the study and interpreting the results –Values and preferences of the actual decision makers –Overlooked in the current LCA practice

11 Systems Analysis Laboratory Helsinki University of Technology Role of Decision Analysis in Life Cycle Assessment (LCA) Needed in the subjective steps: –Goal definition and scoping –Impact assessment (valuation) Helps planning the study to meet the needs of the decision makers Increases the transparency of public decision making

12 Systems Analysis Laboratory Helsinki University of Technology Decision Analysis in Goal Definition and Scoping: Understanding the Process Who are the DMs? What is the related decision or choice problem? What are the alternatives? What are the attributes, i.e. the impact categories? What data will be needed?

13 Systems Analysis Laboratory Helsinki University of Technology LCA Study of Eight Finnish Beverage Packaging Systems (Virtanen et al. 1995) Objectives: –General: to produce environmental information for political and economical decision making –Specific: To support in an environmental tax decision concerning beverage in aluminium cans The study was unable to show the best alternative We analysed in retrospect: –How LCA information was used in decision making –What benefits might have come from the explicit use of decision analysis

14 Systems Analysis Laboratory Helsinki University of Technology Benefits from Value Tree Presentation and Explicit Prioritisation Seeing the decision problem in a general context –Include also other dimensions than environment Identification of the decision alternatives –Not the beverage packaging options but different tax levels Identification of data collection needs –For example analysis of market shares resulting from different tax levels should have been done

15 Systems Analysis Laboratory Helsinki University of Technology Value Tree for Beverage Packaging

16 Systems Analysis Laboratory Helsinki University of Technology Decision Analysis in Impact Assessment: Weighting the Impact Categories Impact weight should depend on: –General seriousness of the environmental impact –How alternatives differ in each impact category General weights suggested by the LCA community not acceptable –Address only part of the problem –Do not change if the decision problem, i.e. alternatives change Weighting should be case specific Behavioral problems exist in weighting

17 Systems Analysis Laboratory Helsinki University of Technology A Compromise: Weights as a Function of the Impact Range Motivation: w i represents the importance of moving from the worst to the best outcome in the i th impact –Should never be interpreted without referring to some specified change R and W are the reference range and weight –The reference weights elicited by considering the reference ranges Weights explicitly as a function of the range, w i (r i ) –w i = W i *r i /R i, if the value function is linear

18 Systems Analysis Laboratory Helsinki University of Technology Dynamic Weights in Case of Linear Value Function

19 Systems Analysis Laboratory Helsinki University of Technology Conclusions LCA a promising tool for environmental management, especially in public use Important application area for decision analysis Goal definition and scoping: value tree construction –Putting the decision problem into overall context –Understanding the components of the decision problem Impact assessment: weights must depend on the attribute ranges –Problem specific weighting –Explicit functional dependency