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The Eco-Costs/Value Ratio for Quantitative, LCA-based, Combined Assessment of the P of Planet and the P of Prosperity

Dr Joost Vogtlander | TU Delft

The Eco-Costs/Value Ratio for Quantitative, LCA-based, Combined Assessment of the P of Planet and the P of Prosperity

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The ever growing economy seems to be one of the major root-causes of the continuing deterioration of our environment. The question is: what can be done? Stopping the economic growth seems no realistic option, so the solution must be found in a better eco-efficiency of our systems for production and consumption ('de-linking of economy and ecology'). Future products and services need to have a high value/costs ratio combined with a low burden for our environment. An LCA (Life Cycle Analyses) based model has been developed to assess the eco-efficiency of products and services: the model of the Eco-costs/Value Ratio, in short EVR. The basic idea of the EVR model is to link the ?value chain' of Porter to the ecological ?product chain'. In the value chain, the added value (in terms of money) and the added costs are determined for each step of the product ?from cradle to grave'. Similarly, the ecological impact of each step in the product chain is expressed in terms of money, the so-called ?eco-costs'. The ratio of ?eco-cost? and ?value? is defined in each step in the chain as: EVR = eco-costs / value . The eco-costs have been defined in terms of marginal prevention costs (?end of pipe? as well as ?system integrated?) for pollution and materials depletion. The eco-costs are ?virtual' costs: these costs are related to measures which have to be taken to reduce pollution to the ?No Effect Level'. The value in the model is the market value: the ?fair price? as perceived by customers. The advantage of using value in the definition of eco-efficiency (instead of using costs) is that the consumer behaviour is incorporated in the model. This paper shows examples of ?eco-efficient value creation': design of green products and services that will thrive in our free market economy because they have a good value for the consumers. It is shown how the selection of the right materials is one of the key issues in this ?eco-efficient value creation' of product design.