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A transdisciplinary review of the role of economics in life cycle sustainability assessment

Abstract

Purpose

This paper reviews the use of economic values in life cycle assessment (LCA) and the justification for environmental life cycle costing (ELCC) as the ‘economic pillar’ of life cycle sustainability assessment (LCSA).

Methods

A transdisciplinary review of economic values in LCA was undertaken and structured with a series of research questions. The review considered the philosophy of science and focussed on the concept of value as a point of synthesis among the disciplines of LCA, economics and ethics. An example from the ELCC Code of Practice was reviewed to highlight the challenges and alternative approaches explored.

Results and discussion

‘Value choices’ and the role of decision makers have been a long-standing and largely unresolved discussion in LCA. Over the past two decades, LCA has been dominated by a utilitarian concept of ethics and valuation based on willingness to pay. This has a number of limitations which are further exacerbated in ELCC and its accounting definition of cost. ELCC struggles to address social costs, and the focus on the decision maker may define values that are not compatible with sustainability. John Rawls’ ‘justice as fairness’ and Amartya Sen’s capability approach were considered to reappraise the use of UN Conventions considered in early LCA literature on values. It was argued that there is an ethical basis to prioritise minimum standards in LCSA to address primary social goods as well as uncertainty in evaluations.

Conclusions

This paper questioned the reliance of LCA on utilitarianism and valuation using willingness to pay and, in particular, the claim of ELCC as the economic pillar of LCSA. Concepts of fairness and capability may overcome some of these limitations and provide a basis for integration of social, economic and environmental pillars of sustainability. Although the ethical justification of prescriptive values may only reach agreement on minimum conditions for social and economic cooperation, it was argued that this may provide a reasonable starting point given the global sustainability challenges over the coming decades. A two-stage approach for the implementation of economic values in LCSA was suggested for further debate and discussion.

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Acknowledgments

Many thanks to Professor Anthony Halog from the University of Queensland for his support. Particular thanks to Justine Lacey, CSIRO, for detailed comments.

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Correspondence to Murray R. Hall.

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Responsible editor: Thomas Swarr

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Hall, M.R. A transdisciplinary review of the role of economics in life cycle sustainability assessment. Int J Life Cycle Assess 20, 1625–1639 (2015). https://doi.org/10.1007/s11367-015-0970-z

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Keywords

  • Capability approach
  • Consequentialism
  • Ecological economics
  • Economics
  • Environmental life cycle costing
  • Ethics
  • Fairness
  • Life cycle assessment
  • Life cycle sustainability assessment
  • Planetary boundaries
  • Rawlsian social contract
  • Sustainability
  • Utilitarianism
  • Value