Abstract
Purpose
The aim of this paper is to describe life cycle costing (LCC) practices in some Swedish organisations, investigate probable changes and determine whether and how environmental costs (internal and/or external) are considered in current LCC.
Methods
This paper is based on interviews with LCC practitioners working in authorities and companies in Sweden, mainly the Swedish defence sector, but also other sectors to broaden the study.
Results and discussion
Those interviewees who use LCC all employ their own particular method, adjusted from case to case. Inclusion of future costs and use of interest rate is also decided from case to case.
Conclusions
The inclusion of direct, indirect, contingent and intangible costs differs between organisations. Even when environmental costs are considered in the LCC, not all the internal (environmental) costs are included. All interviewees believe that LCC can be important for decision making and most also believe that environmental costs, like other costs, influence final decisions, but still LCC is not always performed or used. The companies represented are large, and a particular individual cannot have insights into all methods or procedures used in different departments. The results are thus based upon interviews with individuals representing the companies and the responses might have been different if different individuals had been interviewed. However, since the answers between the different time periods and between the organisations point in the same direction, we found no need to make further interviews.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Bengtsson S, Sjöberg L (2004) Environmental costs and environmental impacts in a chemical industry, eLCC and LCA on two colorants. Akzo Nobel Surface Chemistry, Sweden
Carlsson Reich M (2005) Economic assessment of municipal waste management systems –case studies using a combination of life cycle assessment (LCA) and life cycle costing (LCC). J Clean Prod 13:253–263
COM (2001, 274) Commission interpretative communication on the Community law applicable to public procurement and the possibilities for integrating environmental considerations into public procurement. Brussels: Commission of the European Communities
COM (2008, 397) Communication from the commission to the European parliament, the council, the European economic and social committee and the committee of the regions on the Sustainable Consumption and Production and Sustainable Industrial Policy Action Plan Brussels: Commission of the European Communities
CWRT (2000) Total cost assessment methodology, internal managerial decision making tool. Center for Waste Reduction Technologies, American Institute of Chemical Engineers, New York
EU Directive (2009) EU Directive 2009/33/EC of the European parliament and of the council, of 23 April 2009, on the promotion of clean and energy-efficient road transport vehicles
Gluch P, Baumann H (2004) The life cycle costing (LCC) approach: a conceptual discussion of its usefulness for environmental decision-making. Build Environ 39:571–580
Hochschorner E (2008) Life cycle thinking in environmentally preferable procurement. Doctoral Thesis: ISSN 1653–6126. Royal Institute of Technology, Stockholm
Hunkeler D, Lichtenvort K, Rebitzer G (eds) (2008) Environmental life cycle costing. SETAC
Kicherer A, Schaltegger S, Tschochohei H, Ferreira Pozo B (2007) Eco-efficiency. Combining life cycle assessment and life cycle costs via normalization. Int J Life Cycle Assess 12(7):537–543
Kvale S (1997) Den kvalitativa forskningsintervjun. Lund, Sweden: Studentlitteratur (in Swedish)
Nordlund P, Wickberg P, Eriksson NB (2005) Principer och modeller för ekonomiberäkningar i perspektivplaneringen -övergripande kravspecifikation. Swedish Defence Research Agency: FOI-1623--SE (in Swedish)
Norris GA (2001) Integrating life cycle cost analysis and LCA. Int J Life Cycle Assess 6:118–120
PricewaterhouseCoopers (2009) Collection of statistical information on Green Public Procurement in the EU, Report on data collection results http://ec.europa.eu/environment/gpp/pdf/statistical_information.pdf
SAF (2003) Handbok Miljö för Försvarsmakten (H Miljö), Swedish Armed Forces (in Swedish)
Senthil KD, Ong SK, Nee AYC, Tan RBH (2003) A proposed tool to integrate environmental and economical assessments of products. Environ Impact Asses Rev 23(1):51–72
Sterner E (2000) Life-cycle costing and its use in the Swedish building sector. Build Res Inf 28(576):387–393
Sundkvist Å, Eriksson O, Glaumann M, Bergman S, Finnveden G, Stenbeck S and Wintzell H (2006) Miljöklassning av byggnader – Inventering av metoder och intressenters behov, Stockholm (in Swedish)
Tysseland BE (2008) Life cycle cost based procurement decisions A case study of Norwegian Defence procurement projects. Int J Proj Manag 26:366–375
Acknowledgements
More thorough versions of the studies discussed here are presented in Hochschorner (2008). We are thankful for discussions with Göran Finnveden and Cecilia Håkansson, KTH, for comments from the anonymous reviewers and to the interviewees for their time and interest in this study. Financial support from the Swedish Armed Forces is gratefully acknowledged.
Author information
Authors and Affiliations
Corresponding author
Additional information
Responsible editor: Gerald Rebitzer
Rights and permissions
About this article
Cite this article
Hochschorner, E., Noring, M. Practitioners' use of life cycle costing with environmental costs—a Swedish study. Int J Life Cycle Assess 16, 897–902 (2011). https://doi.org/10.1007/s11367-011-0325-3
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11367-011-0325-3