# Eco-costs: Wikis

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# Encyclopedia

Fig 1: Calculation structure of the eco-costs 2007.

Eco-costs is a measure to express the amount of environmental burden of a product on the basis of prevention of that burden. They are the costs which should be made to reduce the environmental pollution and materials depletion in our world to a level which is in line with the carrying capacity of our earth.
For example: for each 1000 kg CO2 emission, one should invest € 135,- in offshore windmill parks (or other CO2 reduction systems at that price or less). When this is done consequently, the total CO2 emissions in the world will be reduced by 65% compared to the emissions in 2008. As a result global warming will stabilise. In short: "the eco-costs of 1000kg CO2 are € 135,-".
Similar calculations can be made on the environmental burden of acidification, eutrification, summer smog, fine dust, eco-toxicity, and the use of metals, fossil fuels and land (nature). As such, the eco-costs are virtual costs, since they are not yet integrated in the real life costs of current production chains (Life Cycle Costs). The eco-costs should be regarded as hidden obligations.
The eco-costs of a product are the sum of all eco-costs of emissions and use of materials and energy during the life cycle "from cradle to cradle". The widely accepted method to make such a calculation is called Life Cycle Assessment (LCA), which is basically a mass and energy balance, defined in the 14040 and ISO 14044.

The practical use of eco-costs is to compare the sustainability of several product types with the same functionality. The advantage of eco-costs is that they are expressed in a standardized monetary value (€) which appears to be easily understood ‘by instinct’. Also the calculation is transparent and relatively easy, compared to damage based models which have the disadvantage of extremely complex calculations with subjective weighting of the various aspects contributing to the overall environmental burden [1][2].

The system of eco-costs are part of the bigger model of the EVR[3]

## Contents

### Background information

The eco-costs system has been introduced in 1999 and published in 2000-2004 in the International Journal of LCA[4][5], and in the Journal of Cleaner Production[6][7]. In 2007 the system was updated. The concept of eco-costs has been made operational with general databases, and is described at www.ecocostsvalue.com of the Delft University of Technology.
The method of the eco-costs is based on the sum of the marginal prevention costs (end of pipe as well as system integrated) for toxic emissions, material depletion, energy consumption and transport, and conversion of land. For a visual display of the system see figure 1.

The classical way to calculate a “single indicator” in LCA is based on the damage of the emissions. Pollutants are grouped in “classes”, multiplied by a “characterisation” factor to cope with their relative importance within a class, and totalised to the level of their “midpoint” effect (global warming, acidification, nutrification, etc.). The classical problem is then to determine the relative importance of each midpoint effect. This is done by “normalisation” (= comparison with the pollution in a country or a region) and “weighting” (= giving each midpoint a weight, to take the relative importance into account) by an expert panel.

The calculation of the eco-costs is based on classification and characterisation tables as well (combining tables from IPCC, the Universities of Leiden and the University of Michigan), however has a different approach to the normalisation and weighting steps. Normalisation is done by calculation the marginal prevention costs for a region (i.e. the European Union), to reduce the pollution to the “no observable adverse effect level” (often the threshold level of a toxic substance). The weighting step is not required in the eco-costs system, since the total result is the sum of the eco-costs of all midpoints. The advantage of such a calculation is that the marginal prevention costs are related to the cost of the most expensive Best Available Technology which is required to meet the target, and the corresponding level of future Tradable Emission Rights. Example: For reduction of CO2 emissions to a sustainable level, the marginal prevention costs is the cost of replacement of coal fired power plants by windmill parks at the sea.

The eco-costs have been calculated for the situation in the European Union. It might be argued that the eco-costs are also an indication of the marginal prevention costs for other parts of the globe, under the condition of a level playing field for production companies. A group of universities in Japan is developing a set of data for Japan as well.

### Eco-costs 2007

The method of the eco-costs 2007 comprises tables of over 3000 emissions, and has been made operational by special database for Simapro, based on LCIs from Ecoinvent v2 and Idemat 2008 (over 5000 materials and processes), and a database for CES (Cambridge Engineering Selector). Excel look-up tables are provided at www.ecocostsvalue.com.

For emissions of toxic substances, the following set of multipliers is used in the eco-costs 2007 system:

• prevention of acidification 7.55 €/kg SOx equivalent
• prevention of eutrophication 3.60 €/kg phosphate equivalent
• prevention of ecotoxicity 802 €/kg Zn equivalent
• prevention of carciogens 33 €/kg PAH equivalent
• prevention of summer smog (respiratory diseases) 8.90 €/kg C2H4 equivalent
• prevention of fine dust 27.4 €/kg fine dust PM2.5
• prevention of global warming (GWP 100) 0.135 €/kg CO2 equivalent

The eco-costs of abiotic depletion is 0.7 €/kg for fossil fuels. The eco-costs of material depletion of tropical hardwood are based on the change of biodiversity before and after harvesting.

The charaterisation tables which are applied in the eco-costs 2007 system:

• IPPC 2007, 100 years, for greenhouse gasses
• CML-2, for acidification, eutrification and summer smog (respiratory diseases)
• IMPACT 2002+, for aquatic eco-toxicity (inc. heavy metals), fine dust and carcinogens

### Prevention costs versus Damage costs

Prevention measures will decrease the costs of the damage, related to environmental pollution (e.g. damage costs related to human health problems in terms of QALYs). The savings which are a result of the prevention measures are of the same order of magnitude as the costs of prevention. So the total effect of prevention measures on our society is that it results in a better environment at virtually no extra costs, since costs of prevention and costs of savings will level out.

### Discussion

There are many “single indicators” for LCA. Basically the fall in three categories:

• single issue
• damage based
• prevention based

The best known “single issue” indicator is the carbon footprint: the total emissions of kg CO2, or kg CO2 equivalent (taking methane and some other greenhouse gasses into account as well). The advantage of a single issue indicator is, that its calculation is simple and transparent, without any complex assumptions. It is easy as well to communicate to the public. The disadvantage is that is ignores the problems caused by other pollutants and it is not suitable for cradle to cradle calculations (because materials depletion is not taken into account.
The most common single indicators are damage based. This stems from the period of the 1990th, when LCA was developed to make people aware of the damage of production and consumption. The advantage of damage based single indicators is, that they make people aware of the fact that they should consume less, and make companies aware that they should produce cleaner. The disadvantage is that these damage based systems are very complex, not transparent for others than who make the computer calculations, need many assumptions, and suffer from the subjective weighting procedure at the end. Communication of the result is not easy, since the result is expressed in “points” (attempts to express the results in money were never very successful, because of methodological flaws).
Prevention based indicators, like the system of the eco-costs, are relatively new. The advantage, in comparison to the damage based systems, is that the calculations are relatively easy and transparent, and that the results can be explained in terms of money and in measures to be taken. The system is focused on the decision taking processes of architects, business people, designers and engineers. The disadvantage is that the system is not focused on the fact that people should consume less.

## References

1. ^ M. Bengtsson, B. Steen.: Weighting in LCA, approaches and applications. Environmental Progress 2000; 19(2): 101-109
2. ^ G. Finnveden; On the Limitations of Life Cycle Assessment and Environmental Systems Analysis Tools in General. Int. J. LCA 5, pp 229-238, 2000
3. ^ J.G. Vogtländer;EVR, LCA-based assesment of sustainability , VSSD, 2009
4. ^ J.G. Vogtländer, A. Bijma;The 'virtual pollution costs ‘99', a single LCA-based indicator for emissions , Int. J. LCA, 5 (2), pp.113 –124, 2000
5. ^ J.G. Vogtländer, H.C. Brezet, Ch.F. Hendriks; The Virtual Eco-costs ‘99, a single LCA-based indicator for sustainability and the Eco-costs / Value Ratio (EVR)model for economic allocation, Int. J. LCA, 6 (3) pp 157-166, 2001
6. ^ J.G. Vogtländer, A. Bijma, H. Brezet; Communicating the eco-efficiency of products and services by means of the Eco-costs / Value Model, J. of Cleaner Production Volume 10, 2002, pp. 57-67
7. ^ J.G. Vogtländer, E. Lindeijer, J.-P. M. Witte, Ch. Hendriks; Characterizing the change of land-use based on flora: application for EIA and LCA, J. of Cleaner Production, accepted 2002, Volume 12, Issue 1, February 2004, Pages 47-57