1 LCA/CBA Project Update Steve Sides and David Allaway 4/30/08

2 LCA/CBA Project Update BACKGROUND Project launched Spring 2006 GOAL: To develop a model to explore the life- cycle environmental impacts of six waste paint end-of-life management methods and complete a cost-benefit analysis that would help guide ongoing efforts. These methods included: –Consumer-based methods: “Re-use” and “Dry and Dispose” –Collection-based methods: “Re-use”, “Consolidation”, “Re-processing”, and “Dry and Dispose”

3 LCA/CBA Project Update BACKGROUND PROGRESS: Project launched after an initial “scoping document” and contractor proposals –Initial understanding was the modeling would evaluate CURRENT infrastructure –Development of the PPSI Dialog Infrastructure Report spawned interest in having the model inform FUTURE management practice. –Initial DRAFT report on LCA aspects (9/2006) inconsistent with current approach and modeling assumptions

4 LCA/CBA Project Update BACKGROUND Since September 2006, intense discussion followed by seeming inactivity (“reflection”) Final push in early 2008 to build feasible consensus on a new approach proposed by the contractor (ERG/Franklin) Today’s report is intended to represent the consensus approach that has been reached by representatives from government and industry

5 New Approach to LCA/CBA Due to perceived uncertainty of some input values, the contractor proposed to develop an “interactive model” that would allow for exploring wider range of inputs (essentially build-in a sensitivity analysis capability for certain inputs) Model would address both “current infrastructure” and “expanded infrastructure” (the latter being a requirement not anticipated in the initial LCA/CBA, nor identified in the original scoping document) –Approach provides flexibility –Increases cost –Still does not address continued issues with respect to inputs Initial reaction by all parties was positive, with certain reservations

6 Consensus Inputs General agreement on modified methods including percent suitable and sensitivity analysis General agreement on establishing impacts for “limited” and “expanded” infrastructure General agreement on most transportation impacts (for waste management) “Virgin Paint Offset” issues have been resolved domestically through sensitivity analysis, and for export by limiting LCA/CBA accounting to “point of export” or “point of import”

7 Unresolved Inputs How to account for the California landfill restriction on collected waste Transportation “allocation” in general for the “limited” and “expanded” infrastructure (especially self-haul, “swap shop” purchases, “recycled” paint purchases) Paint management “frequency” (6 years vs. 8 years)

8 Contractor Input Process Inputs are only to be provided when requested by the contractor NPCA to announce contractor request to the PPSI dialog Interested parties are free to submit requested input directly to the contractor in a timely fashion Contractor will consider the information received and may/may not use it in making the final determination on how to proceed Notes in the report will detail the contractor’s rationale If no information is received within the specified timeframe, the contractor will press forward using professional judgment

9 Expected Work Product A DRAFT LCA report will be provided including the contractor’s recommendations for modified scenarios to be used in the CBA analysis –Expected June 2008 –Timely comments on the Draft LCA report will be accepted A DRAFT Final LCA/CBA report will be provided –Expected Fall 2008 and will include individual methods and scenarios –Timely comments on the DRAFT Final LCA/CBA report will be accepted NEW GOAL: Project completed by December 2008 –Interactive model to be made available for future use

10 Clear Understanding Completion of the LCA/CBA is critical to several stakeholders –NPCA Board (MOU Commitment) –Retailers (Broaden Support) –Minnesota Legislature (Part of Required Annual Report)

11 Use of the LCA/CBA Findings There has been no collective speculation on the LCA/CBA findings Expectations should be measured –Results could indicate direction and magnitude of potential improvements (i.e. show the way towards gaining environmental benefits and justifying costs) –Results are still “just modeling” –Interactive model development, however, provides opportunities for doing future work

12 Use of the LCA/CBA Findings Having said all that…. –LCA/CBA modeling is specific to inputs and assumptions made and the model design itself To the extent the metrics from the Minnesota pilot provide additional information to confirm or dismiss the inputs and assumptions, it can help inform the validity of the modeling (i.e. “can fill” data, transportation distances, frequency of paint management, percent suitable) To the extent some of these metrics can be used as replacement values for variables in the “interactive” portion of the model, additional insights may be gained (i.e. better idea of a more “successful” mix of various disposal methods for program modification and future roll-out efforts)