Integrating Economic Analysis into LCA
In nearly all private industry applications of LCA, the decision making situations which LCA addresses must also eventually take the economic consequences of alternative products or product designs into account. However, neither the internal nor external economic aspects of the decisions are within the scope of developed LCA methodology, nor are they properly addressed by existing LCA tools. This traditional separation of life cycle environmental assessment from economic analysis has limited the influence and relevance of LCA for decision making, and left uncharacterized the important relationships and trade-offs between the economic and life cycle environmental performance of alternative product design decision scenarios. This presentation demonstrates how full-scale, standard methods of LCA can and have been tightly, logically, and practically integrated with standard methods for cost accounting, life cycle cost analysis, and scenario-based economic risk modeling. The result is an ability to take both economic and environmental performance – and their tradeoff relationships – into account in product/process design decision making. We review and compare the design philosophies behind two different tools for integrating economics and LCA, and present illustrative case studies of the application of each to real-world problems.