Inderscience Publishers

Opportunity cost principles for life cycle assessment: toward strategic decision making in agriculture

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Courtesy of Inderscience Publishers

Life cycle assessment (LCA) is increasingly used for products that require natural resources as important inputs. Relating environmental impacts to the whole production chain makes the method often interpreted as holistic and useful for environmental policy and strategic decision-making. The authors of this paper argue that there are limitations of using LCA for such purposes in food production. Using a product context as basis for the functional unit and the system boundaries may result in false indications of total environmental impacts. Therefore, we suggest that opportunity cost (OC) principles should be included into the LCA method. The significance of the OC principles is shown by using a published case study comparing a conventional and an organic milk production system. The LCA-OC assessment shows that extensive organic farming may result in higher outputs of greenhouse gases than more intensive conventional methods when related effects of alternative land use are considered.

Keywords: life cycle assessment, LCA, land use, opportunity cost, strategic decision-making, policy, conventional milk production, organic milk production

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