The concept, structure, and midpoint tables of the eco-costs for LCA

Theoretical background

Eco-costs are a measure to express the amount of environmental burden of a product on the basis of prevention of that burden. It are the (marginal) costs which should be made to reduce the environmental pollution and materials depletion in our world to a level which is in line with the carrying capacity of our earth.
For example: to prevent 1000 kg CO2 emission, one should invest € 123,- in offshore windmill farms (and the other CO2 reduction systems at that price or less). When this is done consequently, and all possible prevention measures which are less expensive are taken as well, the total CO2 emissions in the world will be reduced by 70% compared to the emissions in 2008. As a result global warming will stabilize. In short: “the eco-costs of 1000kg CO2 are € 123,-“.

Similar calculations can be made on the environmental burden of acidification, eutrification, summer smog, fine dust, eco-toxicity, and the use of metals, rare earth,

fossil fuels, water and land (nature). As such, the eco-costs are virtual costs, since they are not yet integrated in the real life costs of current production chains (Life Cycle Costs). The eco-costs should be regarded as hidden obligations: this is also called “external costs”.
The business relevance of eco-costs is that it is the financial risk of non-compliance with future governmental regulations. Cleaver entrepeneurs are proactive and reduce the eco-costs of their products and services by innovation: ecoefficient value creation supported by circular business models.

The practical use of eco-costs is to compare the sustainability of different product and/or services with the same functionality. This is done by Life Cycle Assessment (LCA), see Fig. 2.1a. The eco-costs can be used in classical LCA, applying standard software like Open LCA or Simapro. However, the eco-costs system provides also a practical method for LCA, which is called “Fast Track LCA“. This is an innovative method

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Figure 2,1a. The Life cycle “chain” in LCA.

for designers and business managers, based on Excel look-up tables. Fast Track LCA enables accurate calculations is a short time span (hours, rather than weeks), and is as accurate as the classical calculations with standard computer software. Complex issues as recycling and combustion at the End of Life are facilitated in an easy and logical way by means of these tables (see the webpage with excel data).The advantage of eco-costs is that the output of these calculations is expressed in a monetary value (€ or US$), which appears to be easily understood ‘by instinct’.

The analysis of all emissions of a life cycle (Fig. 2.1a) results in long lists of toxic substances. Such a long list of emissions does not make sense, so these lists have to be ‘compressed’ to 1 ‘single indicator’. Eco-costs is such an indicator. There are many other ‘single indicators’ for LCA. Basically they fall in three categories: (1) single issue (2) damage based (3) prevention based.

The best known ‘single issue’ indicator is the carbon footprint: the total emissions of kg CO2, or kg CO2 equivalent (taking methane and some other greenhouse gasses into account as well). The advantage of this single issue indicator is, that its calculation is simple and transparent, without any complex assumptions. It is easy as well to communicate to the public. The

disadvantage is that is ignores the problems caused by other pollutants and it is not suitable for cradle to cradle calculations (because materials scarcity is not taken into account).

The most common single indicators are damage based. This stems from the period of the 1990s, when LCA was developed to make people aware of the environmental damage of production and consumption. The advantage of damage based single indicators is, that they show people that they should consume less, and make companies aware that they should produce cleaner. The disadvantage is that these damage based systems are very complex, not transparent for others than who make the computer calculations, need many assumptions, and suffer from the subjective weighting procedure at the end. Communication of the result is not easy, since the result is expressed in ‘points’ (attempts to express the results in money were never very successful, because of methodological flaws and uncertainties).
Prevention based indicators, like the system of the eco-costs, are relatively new. The advantage, in comparison to the damage based systems, is that the calculations are relatively easy and transparent, and that the results can be explained in terms of money and in measures to be taken. The system is focused on the decision taking

processes of architects, business people, designers and engineers. The disadvantage is that the system is not focused on the fact that people should consume less.

The classical way to calculate a ‘single indicator’ in LCA is to group pollutants in ‘classes’, multiplied by a ‘characterisation’ factor to account for their relative importance within a class. Then, the pollutants are totalised to the level of their ‘midpoint’ effect (global warming, acidification, nutrification, etc.). The classical problem is then to determine the relative importance of each midpoint effect. This is done by ‘normalisation’ (= comparison with the pollution in a country or a region) and ‘weighting’ (= giving each midpoint a weight, to take the relative importance into account) by an expert panel.

The calculation of the eco-costs is based on classification and characterisation tables as well, however has a different approach to the normalisation and weighting steps. See the Fig 2.1b below.
‘Normalisation’ is done by calculating the marginal prevention costs for a region (i.e. the European Union), as described at the web page on the eco-costs of emissions. The weighting step is not required in the eco-costs system, since the total result is the sum of the eco-costs of all midpoints.

Figure 2.1b. The Model of the eco-costs and the s-eco-costs for E-LCA and S-LCA.
Note. Additional eco-costs for Total Cost Accounting (TCA), i.e. the extra eco-costs of Natural and Social Capital, are provided at the webpages for TCA

The advantage of such a calculation is that the marginal prevention costs are related to the cost of the most expensive Best Available Technology which is needed to meet the target, and the corresponding level of Emission Allowances which is required in future. Example: For reduction of CO2 emissions to a sustainable level, the marginal prevention costs are the costs of replacement of coal-fired power plants by windmill farms at the sea.

The eco-costs have been calculated for the situation in the European Union. It might be argued that the eco-costs are also an indication of the marginal prevention costs for other parts of the globe, under the condition of a level playing field for production companies.

Table 2.1 below provides data for emissions of toxic substances as applied in the eco-costs 2022 and 2023 system. The midpoint tables are in line with the Ecological Footprint.
The eco-costs of metals depletion (Table 2.2) are based on the financial risk of supply chain disruption, in line with the philosophy of the CRM (critical raw materials) of the EU. See resource scarcity.

Eco-costs and inflation

In normal circumstances it is not recommended to update eco-costs by the yearly inflation rate since these marginal prevention costs might decrease significantly because of technical learning curves, economies of scale, and increased efficiencies. Instead of a regular inflation correction, recalculations were done every 5 years (2001, 2007, 2012, 2017, 2022) and scientific papers were checked at these intervals.
An example (based on European data) of the stability of actual prices is the eco-costs of carbon footprint: it was 0.118 €/kgCO2eq in 2001, 0.135 euro €/kgCO2eq in 2012 and decreased to 0.116 EUR/kgCO2eq in 2022, because of better efficiencies of bigger windmills.
However, the year 2022 appeared to be an exception. Because of the Ukraine war, energy prices exploded temporarily, causing a core inflation of approximately 6%, at hardly no gain in productively. So it was decided to introduce a correction of the eco-costs by a factor 1.06 from 2022 to 2023. An exception has been made to the Disability Adjusted Life Years (DALY): for the past decade it has stayed at 80,000 €/DALY as improved efficiencies in hospitals have counteracted the inflation rate.

Category	Eco-costs 2022 (marginal prevention costs)	Eco-costs 2023 (marginal prevention costs)	Midpoint table
eco-costs of global warming (carbon footprint)	0.116 €/kg CO2 equivalent	0.123 €/kg CO2 equivalent	IPPC 2021, 100 years, (also applied in EF)
eco-costs of acidification	8.75 euro / kg SO2 equivalent (= 6.68 euro / mol H+ eq)	9.275 euro / kg SO2 equivalent (= 7.08 euro / mol H+ eq)	EF table (including EU country factors)
eco-costs of eutrophication	4.70 euro / kg PO4 equivalent (= 14.40 euro / kg P eq)	5.0 euro / kg PO4 equivalent (= 15.32 euro / kg P eq)	EF table (including EU country factors)
Photochemical oxidant formation (‘summer smog’)	5.35 Euro/ kg NOx equivalent	5.67 Euro/ kg NOx equivalent	table from ReCiPe (since EF does not have this midpoint table)
eco-costs of fine dust	35.0 €/kg fine dust PM2.5 equivalent	37.1 €/kg fine dust PM2.5 equivalent	UNEP/CETAC table
eco-costs of ecotoxicity	340.0 €/kg Ni equivalent	360 €/kg Ni equivalent (in fresh water) = 1.33E-2 €/CTUe	UseTox 2 (recommended plus interim), freshwater ecotoxicity (EF version)
eco-costs of human toxicity cancer	3750 €/kg Benzo(a)pyrene equivalent	3754 €/kg Benzo(a)pyrene equivalent = 920000 €/ CTUh	UseTox 2 (recommended plus interim), cancer (EF version)
eco-costs of human toxicity non-cancer	25500 €/kg Mercury. equivalent	27560 €/kg Mercury equivalent = 216000 €/ CTUh.	UseTox 2 (recommended plus interim), non-cancer (EF version)

Table 2.1 The midpoint characterization tables and the multipliers in the model of the eco-costs for emissions (for details see webpage eco-costs of emissions).
Note. Eco-costs of emissions of individual substances (Scope 1 emissions) can be found at webpage Idemat Excel files the excel file Ecocosts2023_V1-0_midpoint_tables.xlsx

Materials	Eco-costs scarcity’23 (euro/kg)	Materials	Eco-costs scarcity’23 (euro/kg)	Materials	Eco-costs scarcity’23 (euro/kg)	Materials	Eco-costs scarcity’23 (euro/kg)	Materials	Eco-costs scarcity’23 (euro/kg)
METALS
Aluminium Antimony Arsenic Barium Beryllium	0.95 8.41 1.00 0.067 247.76	Cobalt Copper Gallium Germanium Gold	44.93 3.92 122.39 922.37 25164	Magnesium Manganese Mercury Molybdenum Nickel	0.12 0.48 37.50 47.94 12.52	Rhodium Ruthenium Rhenium Selenium Silicon	8617 8617 5313 94.15 1.09	Thorium Tin Titanium Tungsten Vanadium	118 18.96 14.06 32.10 22.05
Bismuth Boron Cadmium Caesium Chromium	23.52 0.36 18.01 54367.38 1.00	Hafnium Indium Iron Lead Lithium	252 664 0.077 1.51 2.96	Niobium Platinum Palladium Iridium Osmium	37.27 8617 8617 8617 8617	Silver Strontium Tantalum Tellurium Thallium	602 0.38 624 107 3045	Zinc Zirconium	1.50 0.62
RARE EARtH						ENERGY
Cerium Dysprosium Erbium Europium Gadolinium	106.32 1183.76 176.85 2334.19 42.10	Lanthanum Neodymium Praseodynium Samarium Scandium	107 200 104 111 3276	Terbium Ytterbium Yttrium	1707 62.09 146	Oil Natural gas Nat gas for tra Diesel for tra Petrol for tra	0.85 0.85 0.47 0.47 0.47	U 500 GJ/kg U 560 GJ/kg U 451 GJ/kg U 2291 GJ/kg U 332 GJ/kg	3414 3824 3080 15642 2267

Table 2.2 The midpoint characterization table in the model of the eco-costs for resource scarcity (for details see webpage eco-costs of resource scarcity).
Note. Eco-costs of scarcity of water and the eco-costs of land-use can be found at webpage Idemat Excel files the excel file Ecocosts2023_V1-0_midpoint_tables.xlsx

The abovementioned marginal prevention costs at midpoint level can be combined to ‘endpoints’ in three groups, plus global warming as a separate group:

– eco-costs of human health = the sum of carcinogens, summer smog, fine dust
– eco-costs of ecosystems = the sum of acidification, eutrophication, ecotoxicity
– eco-costs of resource scarcity = the sum of abiotic depletion (scarcity of metals, REE, and energy carriers), land-use, water, and land-fill
– eco-costs of global warming = the sum of CO2 and other greenhouse gases (the GWP 100 table)
– total eco-costs = the sum of human health, ecosystems, resource depletion and global warming

Since the endpoints have the same monetary unit (e.g. euro, dollar), they are added up to the total eco-costs without applying a ‘subjective’ weighting system. This is an advantage of the eco-costs system (see also ISO 14044 section 4.4.3.4 and 4.4.5). So called ‘double counting’ (ISO 14044 section 4.4.2.2.3) is avoided in the eco-costs system.

The eco-costs of global warming (also called eco-costs of CO2) can be used as an indicator for the carbon footprint. The eco-costs of resource depletion can be regarded as an indicator for ‘circularity’ in the theory

of the circular economy. However, it is advised to include the eco-costs of human toxicity, the eco-costs of eco-toxicity, and include the eco-costs of global warming in the calculations on the circular economy as well. The eco-costs of global warming are required to reveal the difference between fossil-based products and bio-based products, since biogenic CO2 is not counted in LCA (biogenic CO2 is part of the natural recycle loop in the biosphere). In C2C this is the biggest advantage of the biosphere in contrast to the technosphere. Therefore, total eco-costs is a robust scientific indicator for cradle-to-cradle calculations in LCA for products and services in the theory of the circular economy. Since the economic viability of a business model is also an important aspect of the circular economy, the added value of a product-service system should be part of the analysis. This requires the two dimensional approach of Eco-efficient Value Creation, also described at the Wikipedia page on the model of the Ecocosts/Value Ratio, EVR.

The eco-costs system is in compliance with ISO 14008 (“Monetary valuation of environmental impacts and related environmental aspects”), and uses the ‘averting costs method’, also called ‘(marginal) prevention costs method’ (see section 6.3).

The eco-costs method is not the only prevention based indicator system. The eco-costs are calculated for the situation of the European Union, but are applicable worldwide under the assumption of a level playing field for business, and under the precautionary principle. There are two other prevention based systems, developed after the introduction of the eco-costs, which are based on the local circumstances of a specific country:
– In the Netherlands, ‘Milieu Kosten Indicator’ (Environmental Costs Indicator system), a kind of system for ‘shadow prices’ have been developed in 2004 by TNO/MEP on basis of a local prevention curves: it are the costs of the most expensive prevention measure required by the Dutch government for each midpoint. It is obvious that such costs are relevant for the local companies, but such a shadow price system doesn’t have any meaning outside the Netherlands, since its ‘performance reference point’ is not based on the ‘No-Observed-Adverse-Effect-Level’ (NOAEL = equilibrium of the eco-systems of mother earth)
– In Japan, a group of universities (Kyoto, Bunkyo, Kobe) have developed a set of data for maximum abatement costs, for the Japanese conditions. The development of this set of abatement costs started in 2002 and has been published in 2005. The so-called avoidable abatement cost (AAC) in this method is comparable to the eco-costs.

Other monetized indicator systems

Other monetized indicator systems for LCA are:
– the system of CE Delft which is damage based (in fact it started as a new calculation set of the ExterneE project); the advantage of damage based systems is that they appeal to the awareness of the issue, however, the disadvantage is that the calculation is highly uncertain (inaccuracies of a factor 3 – 10 are common).
– the EPS systems which is based on the Willingness to Pay in Sweden to resolve the effects of pollution.
– the Stepwise system, which is a so called budgetary system: the part of the GNP that we can spend reasonably well on specific environmental issues, in Denmark.
– Marginal Abatement Costs, which are not applied in LCA, but in governmental policies.

Although these other indicator systems differ from philosophies, they have a lot in common in practice.
At this moment, the eco-costs is the most applied system in science. (based on the number of peer reviewed scientific papers).

The choice of midpoints, endpoints and single score indicators

ISO 14044 Section 4.4.2.2.1 has a statement that “The selection of impact categories, category indicators and chacterisation models shall be both justified and consistent with the goal and the scope of the LCA”. That means that the total eco-costs might not always the right choice in every LCA study (that is the reason that the Idemat tables provide columns for midpoints scores, not only for eco-costs but also for ReCiPe and Environmental Footprint).
It is common sense that, when a greenhouse study is done for a government, that CO2 equivalent is chosen as indicator. The same applies for NOx equivalent for a study on eutrofication of protected areas of nature. In such “one-issue” LCAs it is clear which corresponding indicator has to be selected in the first (‘goal and scope’) stage of the study, prior to the actual calculations.
In general, the classical argument is that midpoints are less inaccurate than endpoints. But there is a disadvantage of taking midpoints instead of endpoints or single score systems, as midpoint score systems in LCA appear to be highly subjective, and often manipulative, in the Interpretation phase. It is common practice in LCA to postpone the choice of the indicator to the end of the study: only a few, out of the more than 20 midpoints in the output, are selected then that support the desired outcome (for companies this is a cleaver way of greenwashing, for NGOs it is a cleaver way of spinning in their PR). Hence the requirement in the ISO for “both justified and consistent” indicators, that have to be selected in the goal and scope stage.
In LCA studies on innovation of materials, products, and services, endpoints and single indicators are advised (either eco-costs, ReCiPe, or Ecological Footprint), to avoid the aforementioned manipulation of conclusions. These endpoints and single score systems are solutions for an “integral” environmental approach. These systems are less accurate, however, are well defined and transparent, which is much more acceptable than the subjective selection of a LCA practitioner. Although the objections of ISO 14044 in Section 4.4.3.4 and 4.4.5 are clear (“Weighting …. shall not be used in LCA studies intended to be used in comparative assertions …“, the majority of the modern scientist abandoned the idea that weighting is forbidden in LCA: it cannot be avoided in damage based systems (See Kägi et al. Session “Midpoint, endpoint or single score for decision-making?”—SETAC Europe 25th Annual Meeting, May 5th, 2015. Int J Life Cycle Assess (2016) 21:129–132)
Eco-costs, however, does not have the issue of weighting, since the issue of “different individuals, organizations, and societies may have different preferences“(section 4.4.3.4) does not play a direct role in the calculation system.
Note that single score systems have each their own assumptions in modelling (as midpoint systems have). Therefore all these systems have their inherent value choices, and areas of application.

Summarizing pro’s and con’s of eco-costs

eco-costs are:
– less accurate than midpoints (the calculation pathway is longer)
– more accurate than damage based endpoints, i.e. the 3 endpoints for the 3 Areas of Protection (since the calculation pathways of these endpoints are much longer and need a lot of extra assumptions)
– more accurate than damage based single indicators, i.e. the sum of the weighted endpoints that requires the choices of groups of people
– less suitable for ‘awareness building’, since that can better be based on damage
– more suitable for business people, since they “understand money” and are interested in the costs of prevention
– more suitable for governments that must design implementation strategies for the coming 30 years, since such strategies are restricted by the available budget in society
– more suitable to C2C calculations (together wit ReCiPe and Ecological Footprint), since they combine material scarcity indicators (the issue of materials depletion) and carbon footprint (the issue of the preference of the biosphere).
– suitable for people who are convinced that the required targets can be reached by innovation in combination with governmental regulations (i.e. by building a cleaver, new, economy)
– not suitable for groups of people that are convinced that it is fundamentally not possible to reach the required targets with innovation in a society that is based on money.