10 May 2009

Life Cycle Assessment vs. Green Pricing

AG sent this interesting article from Scientific American:
"Very few green products have been systematically assessed for how much good they actually do," says Gregory Norris. "First you have to do an LCA, and that's rare." Maybe thousands of products of any kind have gone through these rigorous impact evaluations, he adds, "but that's a tiny fraction—millions are sold. Plus, consumers don't realize how interconnected industrial processes are," let alone their myriad consequences.

"The bar is too low for green products," Norris concludes. Our current fixation on a single dimension of "green" ignores the multitude of adverse impacts that shadow even the most seemingly virtuous of items. As Life Cycle Assessment of just about anything shows, virtually everything manufactured is linked to at least trace quantities of environmental toxins of one kind or another, somewhere back in the vast recesses of the industrial supply chain. Everything made has innumerable consequences; to focus on one problem in isolation leaves all the other consequences unchanged.

As one industrial ecologist confided, "The term 'eco- friendly' should not ever be used. Anything manufactured is only relatively so."

This shadow side of industry has been overlooked in the value chain concept, which gauges how each step in a product's life, from extracting materials and manufacture through distribution, adds to its worth. But the notion of a value chain misses a crucial part of the equation: while it tracks the value added at each step of the way, it ignores the value subtracted by negative impacts. Seen through the lens of a product's Life Cycle Assessment, that same chain tracks a product's ecological negatives, quantifying its environmental and public health downsides at each link. This window on a company or product's negative ecological footprint might be called the "devalue chain."
I have two comments:
  1. The folks who said reduce, reuse, recycle were are right.
  2. The "devalue chain" can be factored in to the price of a product (and its components) by adding the cost of negative externalities. Since prices are MUCH easier to reconcile, add and compare, "Green Pricing" would do away with the need to do (or understand) LCA for any product. Read Hayek to understand just how powerful prices are.
Bottom Line: Knowledge is power, and it's easier to "do the right thing" with the proper information at hand.

2 comments:

  1. Yes, exactly. I think first of all it is important to not purchase anything you can get away without purchasing, then to get it used if you have to, and as a final ditch to think carefully and get the most durable, responsible option you can. To me, green isn't installing a new bamboo floor in your remodel, drinking organic milk, and buying an organic cotton skirt. To me, green is making a compost pile out of trashed pallets, growing your potatoes in trashed tires, and catching water off your roof in used containers to water it all. That doesn't mean that I have totally lived within these ideals, and building codes etc do a lot to hamper real greenness...

    Anyway, insightful article for the yuppy green!

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  2. True, but I've seen one study of a product in which every aspect of the company's "eco-friendliness" - in this case it was wine from Australia and they had a CO2 emission LCA done - was not valued by consumers, while the things consumer valued were the most CO2 emitting activities. Result: the company was getting no competitive advantage in the good stuff they were making, and were very reasonably asking themselves if the cost was worth it.

    An opinion movement has come along that blames companies for everything and sees them as the source of all evil. However, supply and demand has two sides. The right incentives must be in place - we've been repeating the 3R mantra for a long time, and many consumers still have no incentives to take notice.

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