Consequential LCA

Question 1

What is consequential LCA?

Answer 1

• different definitons –> 3 key words: decisions/changes; market mechanisms; consequences
• > CLCA describes/accessed what environmental consequences decisions/changes can have by inlcuding market mechanisms

Question 2

What kind of decisions/changes are considered?

Answer 2

– Political decisions, e.g. Nuclear power phase out
– Economic decisions, e.g. investment in new technologies
– Market constraints, e.g. barriers of trade on rare earth metals from China
– Market shifts, e.g. Brexit
– Increased demand for a product, e.g. smart phone, electric vehicles
– Technology development, e.g. hydrogen strategy

Question 3

Why market mechanisms?

Answer 3

Decisions/changes can lead to a series of dependencies (consequences) in other product systems, that are not necessarily linked to the product life cycle

Question 4

When to model consequential?

Answer 4

In very general CLCA is appropriate if…
– Consequences of decisions shall be analyzed
– Long term effects are of interest
– Large scale consequences are involved
– A big (economic) size of the object of investigation
– Extended realism needs to be added to the analysis, which leads to inclusion of market mechanisms

Question 5

How to model consequential

Answer 5

• The life cycle inventory of a CLCA should reflect changes within and outside
the product system that result from a decision –> Consequential part usually effects the LCIA (inventory analysis)
• Goal: Estimate how elementary flows to and from the environment
will change as a result of decisions
• In order to identify changes, market mechanisms shall be included
• Market relations or mechanisms are derived from economic models or outlooks
in specific sectors

Question 6

Modelling market mechanisms

Answer 6

• There is a wide range of mechanisms , which cause different consequences
–> Rivals (Konkurrenz), Entrants, Customers, Regulation, Resources

– For example, a change in demand and/or supply may influence prices that determine what is produced (substitution mechanisms) and who can afford to consume it (income effects).
– Rebound effects or ripple effects causes consumers to increase their demand for other goods
– Causing the need to build new production plant in consequence of additionally
required materials, parts etc.
– Market displacement of competing products due to marginal market price changes,
consumer behaviour changes, …

Question 7

Rebound effects

Answer 7

• Rebound effect”: mechanisms that counteract and partly or fully may compensate the consequences in the market
• Such secondary consequences may also increase the effect of the identified consequence or lead to fully different consequences than the direct ones modelled in classical consequential modelling
• Among these mechanisms:
– increasing demand for a (co –)product if its market price is reduced,
– decreasing demand for competing products due to the decreased price of a (co -)product,
– changed consumption patterns due to efficiency increases
– changed consumption patterns due to more time availability by consumers

Question 8

Modelling market mechanisms - examples

Answer 8

•Economic models used:

– partial equilibrium models (PEM):
“What product flows are affected by a change?”

– General equilibrium models
“Which rebound effects can occur?”
“Which markets are linked?”

– Dynamic optimizing models
“Which marginal effects in dynamic production systems exist?”

• In fact, usually only one market situation is modelled and only one affected process/technology is identified.

Question 9

Processes to include

Answer 9

• Only (but all relevant) affected processes need to be included, defined as those that respond to changes in demand and/or supply driven by the decision at hand.
• Identification of the processes to be included in the analyzed system is one of the main issues of CLCA
• For identification of the affected processes, there are supporting procedures
– ILCD handbook (decision tree)
– Schmidt 2008 (particular for agricultural CLCA)
– Weidema et al. 2009 ( schematised into a decision tree)

Question 10

Allocation

Answer 10

• In CLCA multifunctional processes have always to be handled with system expansion, never with allocation

• -> This can lead to multiple functional units, which causes difficulties if a comparative analysis has to be considered!
• also system expansion with substitution can be regarded as consequential modelling

Question 11

Data requirements

Answer 11

• If an increased or decreased demand does not lead to a linearly increased/ decreased production of all technologies contributing to the production mix, marginal data instead of average data shall be used, e.g.:
– Electricity: natural gas power plant instead of grid mix
– Lithium: potentially mining & smelting instead of salt lakes

• Consideration of developments and improvements of technologies in future
– Specify the adopted time perspective (mostly > 10 years)

Question 12

Uncertainties

Answer 12

• CLCA is regarded as less transparent and very sensitive to assumptions
• It is necessary to determine (which requires high expertise from other fields)
– whether the market of the specific superseded product is growing, stable, or falling
– which of the available production technologies and routes are the most (or least)
cost efficient ones in long term perspective
– future market and technology developments
– in how far the theoretical, direct consequences are fully or partly counteracted by rebound effects of all kind

–> CLCA causes higher system complexity and, thus, uncertainty

Question 13

How to deal with uncertanties?

Answer 13

• Modelling arguments have to be reasonable, with evidences, and transparent
• To increase the robustness of the studies, processes and rules have to be defined. For that sensitivity analysis and the use of scenarios are unavoidable.
• Is it better to use an uncertain CLCA than an attributional LCA, which is not intended for the analysis of large scale decision?

Question 14

How to model consequential - database

Answer 14

• Ecoinvent database version 3 is ready for consequential modelling (as a first version to model CLCA)

Question 15

How to model consequential?

Answer 15

• Large product system can influence the background situation
–> assumption of marginal impacts still valid?

• the impact assessment can be affected by large scale decisions

Question 16

Differences between attributional and consequential LCA -Question the method aims to answer

Answer 16

ALCA: What are the total emissions from the processes and material flows directly used in the life cycle of a product?
CLCA: What is the change in total emissions as a result of a marginal change in the production (and consumption and disposal) of a product?

Question 17

Differences between attributional and consequential LCA -

Application

Answer 17

ALCA: ALCA is applicable for understanding the emissions directly associated with the life cycle of a product. ALCA is also appropriate for consumption-based emissions accounting.

CLCA: CLCA is applicable for Inorming consumers and policy-makers on the change in total emissions from a purchasing or policy decision.

Question 18

Differences between attributional and consequential LCA - System boundary

Answer 18

ALCA: The processes and material flows directly used in the production, consumption and disposal of the product.

CLCA: All processes and material flows which are directly or indirectly affected by a marginal change in the output of a product.

Question 19

Differences between attributional and consequential LCA - Double-counting and accounting for absolute emissions

Answer 19

ALCA: No double-counting of emissions. The emissions allocated to one product in an ALCA will not to allocated to other products in other ALCAs.

CLCA: Double-counting of emissions. The scope of different CLCAs may overlap and the emissions may be counted in mutiple CLCAs.

Question 20

Differences between attributional and consequential LCA - data

Answer 20

ALCA: ALCA tends to use average date.

CLCA: tends to use marginal data

Question 21

Differences between attributional and consequential LCA - market effects

Answer 21

ALCA: does not consider the market effects

CLCA: considers the market effects

Question 22

Differences between attributional and consequential LCA - allocation methods

Answer 22

ALCA: allocates emissions to co-products based on either economic value, energy content or mass

CLCA: uses system expansion to quantify the effect of co-product on emissions

Question 23

Differences between attributional and consequential LCA - non-market indirect effects

Answer 23

ALCA: does not inlude other indirect effects

CLCA: should include all other indiret effects, such as the interactions with existing policies

Question 24

Differences between attributional and consequential LCA - time-scales

Answer 24

ALCA: aims to quantify emissions at a given time

CLCA: it is necessary to specify the time-scale of the change

Question 25

Differences between attributional and consequential LCA - uncertainty

Answer 25

ALCA: has low uncertainty, because the relationships between inputs and outputs are generally stoichiometric

CLCA: is nearly always highly uncertain because it relies on models that seek to represent complex socio-economic systems that include feedback loops and random elements

Question 26

CLCA and ISO 14040/44

Answer 26

• ISO 14040/44 (2006) doesn’t distinguish between attributional and consequential models.
• But it points out that
– System boundaries shall be set in a way to allow for analyzing the goal of the study
– Allocation hierarchy prioritizes avoiding allocations
• CLCA developers interpret this as the ISO standard being in favor for CLCA…

Question 27

CLCA and the ILCD handbook

Answer 27

• special section in ILCD: 7.2.4 “Identifying processes in consequential modelling”

• ILCD handbook dissuades (rät ab) the use of consequential modelling with 7 arguments:
– involves considerable subjectivity,
–require more data, currently lacking,
– has higher uncertainty,
– has a higher complexity,
– includes uncertain rebound effects,
– is difficult to communicate,
– is more costly.