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Green Net Value Added as a Sustainability Metric Based on Life Cycle Assessment: An Application to Bounty® Paper Towel
Citation:
Demeke, B., W. Ingwersen, A. Wiesbrod, M. Ceja, AND B. Weber. Green Net Value Added as a Sustainability Metric Based on Life Cycle Assessment: An Application to Bounty® Paper Towel. Presented at 2016 AIChE Annual Meeting, San Francisco, CA, November 13 - 18, 2016.
Impact/Purpose:
To evaluate sustainability of a product system in a supply chain using economic valuation methods based on Life Cycle Assessment. The paper develops a method for full cost accounting for value chains. The methods developed in this paper will be used as input for value chain sustainability tool to be included in OpenLCA.
Description:
Sustainability measurement in economics involves evaluation of environmental and economic impact in an integrated manner. In this study, system level economic data are combined with environmental impact from a life cycle assessment (LCA) of a common product. We are exploring a costing approach that captures traditional costs but also incorporates externality costs to provide a convenient, easily interpretable metric. Green Net Value Added (GNVA) is a type of full cost accounting that incorporates total revenue, the cost of materials and services, depreciation, and environmental externalities. Two, but not all, of the potential environmental impacts calculated by the standard LCIA method (TRACI) could be converted to externality cost values. We compute externality costs disaggregated by upstream sectors, full cost, and GNVA to evaluate the relative sustainability of Bounty® paper towels manufactured at two production facilities. We found that the longer running, more established line had a higher GNVA than the newer line. The dominant factors contributing to externality costs are calculated to come from the stationary sources in the supply chain: electricity generation (27-35%), refineries (20-21%), pulp and paper making (15-23%). Health related externalities from Particulate Matter (PM2.5) and Carbon Dioxide equivalent (CO2e) emissions appear largely driven by electricity usage and emissions by the facilities, followed by pulp processing and transport. Supply chains for other facility purchases, product distribution, and end-of-life management (landfilling/incineration) contribute the least to the environmental health-related costs.
