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Economic Input-Output Life Cycle Analysis

Lester Lave, Chris Hendrickson, & Scott Matthews

Green Design InstituteCarnegie Mellon University

June 2005

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Why Life Cycle Analysis?

• Social Goal: Better environmental quality & a more sustainable economy

• Focusing on one phase is misleading: Battery powered cars, hydrogen cars

• Need to examine all materials & energy going in & all discharges coming out from “cradle to grave” – extraction to disposal

• ISO 14000 has defined a protocol for LCA

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Life Cycle Analysis:Extraction to End of Disposal

Need to Account for Indirect Inputs

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Process Analysis: SETAC

• Until recently, LCA was done only by doing detailed materials & energy balances of each relevant process

• This is time consuming & expensive, e.g., multi-million dollar US automobile study

• Cannot examine all contributing processes & so need to draw, arbitrarily, a boundary as to what is considered – most is left out

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Simplified Process Analysis:Materials Balance for Coke Oven

Source: McMichael & Polenske

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LCA Too Complicated!

• Materials & energy balances for thousands (millions?) of processes?

• Can’t we just approximate an LCA?• LCA proportional to cost, weight, or

petroleum use of a good or service• Is each dollar of economic activity equally

consumptive of resources• Is each pound of a product?• Is each liter of petroleum used?

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Approximations to LCA

0

20

40

60

80

100

120

140

Computers Automobiles Banking Air Travel Electricity Shoes

Air Pollutants per $ 1M (metric ton)

Air Pollutants per lb of production (hg)

Air Pollutants per TJ of petroleum (metric tons)

Toxic Discharges per $ 1M (metric tons)

Toxic Discharges per lb (g)

Toxic Discharges per TJ of petroleum (kg)

Energy used per $ 1M (TJ)

Energy used per lb (TJ)

Energy used per TJ of petroleum (TJ)

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From I-O to EIO-LCA• To US Input-Output table we append

government data bases available by I-O sector: Inputs of energy, fuels, emissions of air pollutants & greenhouse gases, water use, occupational injury & death, waste discharged, etc.

• To do an LCA, we approximate each input by an I-O sector

• We observe direct, & compute indirect, inputs with implied outputs & discharges

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Supply Chain: Making $1 million of Computer Peripherals Equipt. in 1997 ($)

Total for all supply sectors 2,985,000Computer peripheral equipment 1,083,000Semiconductors & related devices 347,000Wholesale trade 241,000Other electronic components 211,000Noncomparable imports 73,000Motors & generators 60,000Miscellaneous plastics products 48,000Real estate 45,000Advertising 43,000

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$1 million of Computers

48,000.1Semiconductors & related devices

37,000.1Other electronic components8,800.2Paper & paperboard mills

450.3Air transportation9,900.3

Industrial inorganic & organic chemicals

900.3Trucking & courier services, except air

14,000.4Blast furnaces & steel mills17,000.4Wholesale trade

110,000.5Computer peripheral equipment

362.6Electric services (utilities)440,0006.8Total for all sectors

KWhTJElectricity Total Energy

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From SETAC & EIO-LCA to Hybrid

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Making EIO-LCA More Useful• Hybrid LCA: Use process analysis as

inputs (composition of a car) or outputs (PM produced by air emissions)

• Technical change: Modify coefficients• Disaggregate sectors• Location of activity & discharges• Materials flows: Physical units for metals• Valuing environmental discharges• Enterprise I-O models• Uncertainty modeling

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Some EIO-LCA Outputs

• What follows are some examples of analyses done with EIO-LCA

• First, a look at which sectors of the economy use the most resources & are most polluting

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Per Million Dollars of Economic Output

0

100

200

300

400

500

600

700

800

900

1000

Ener

gy

(10^

6Ter

ajoule

s)

RCRA h

azar

dous

was

tes

gen

erat

ed(1

0^

6 m

etric

tons)

Glo

bal

War

min

gPote

ntial

(10^

5 m

tCO

2 e

quiv

.)

Ener

gy

(10^

6Ter

ajoule

s)

RCRA h

azar

dous

was

tes

gen

erat

ed(1

0^

6 m

etric

tons)

Glo

bal

War

min

gPote

ntial

(10^

5 m

tCO

2 e

quiv

.)

Ener

gy

(10^

6Ter

ajoule

s)

RCRA h

azar

dous

was

tes

gen

erat

ed(1

0^

6 m

etric

tons)

Glo

bal

War

min

gPote

ntial

(10^

5 m

tCO

2 e

quiv

.)

Ener

gy

(10^

6Ter

ajoule

s)

RCRA h

azar

dous

was

tes

gen

erat

ed(1

0^

6 m

etric

tons)

Glo

bal

War

min

gPote

ntial

(10^

5 m

tCO

2 e

quiv

.)

Manufacturing Services Utilities Other

IndirectDirect

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For Total Sector Economic Output

0

50

100

150

200

250

300

350

400

Ener

gy

(10^

6Ter

ajoule

s)

RCRA h

azar

dous

was

tes

gen

erat

ed(1

0^

6 m

etric

tons)

Glo

bal

War

min

gPote

ntial

(10^

5 m

tCO

2 e

quiv

.)

Ener

gy

(10^

6Ter

ajoule

s)

RCRA h

azar

dous

was

tes

gen

erat

ed(1

0^

6 m

etric

tons)

Glo

bal

War

min

gPote

ntial

(10^

5 m

tCO

2 e

quiv

.)

Ener

gy

(10^

6Ter

ajoule

s)

RCRA h

azar

dous

was

tes

gen

erat

ed(1

0^

6 m

etric

tons)

Glo

bal

War

min

gPote

ntial

(10^

5 m

tCO

2 e

quiv

.)

Ener

gy

(10^

6Ter

ajoule

s)

RCRA h

azar

dous

was

tes

gen

erat

ed(1

0^

6 m

etric

tons)

Glo

bal

War

min

gPote

ntial

(10^

5 m

tCO

2 e

quiv

.)

Manufacturing Services Utilities Other

IndirectDirect

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Table 15.2 Fatality risk per $100 million of output.

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

Agric

ultu

re, f

ores

try a

nd fi

sher

y

Metal

min

ing

Coal

min

ing

Oil an

d ga

s ex

tract

ion

Nonm

etal

lic m

ater

ials

Cons

truct

ion

Food

and

kin

dred

pro

duct

s

Direct fatality rate per 1000 wor

Direct fatalities per $100M outp

Total fatalities per $100M outpu

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An Automobile LCA

• Automobiles are 1/7 of GDP• Use large amounts of gasoline & materials

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Vehicle Life Cycle

Vehicle Design &

Development

Raw Materials Sources

Vehicle Manufacture

Vehicle Use

Vehicle End-of-Life

Fuel Distribution

Service, Maintenance

Fixed Costs

Fuel Production

Primary Energy Sources

Waste Management

Scrap/ Recycle

Landfill

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Life Cycle Assessment of a Car by Life Cycle Stage

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1053310800 95418

1100211

413337215160676191432

0

200000

400000

600000

800000

1000000

1200000

Manufacture

Operation

Petroleum R

efining

RepairFixe

d Costs/In

surance

Vehicle Life Cycle Stage

Ener

gy U

se (M

J)SuppliersIndustry/Vehicle

Energy Use

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274361869095921304773

73087

106848785

0

10000

20000

30000

40000

50000

60000

70000

80000

Manufa

cture

Vehicle

Ope

ration

Petrole

um Refining

Repair

Fixed Cost

s/Insu

rance

Vehicle Life Cycle Stage

Gre

enho

use

Gas

Em

issi

ons

(kg

CO

2-eq

uiva

lent

/veh

icle

life

time)

SuppliersIndustry/Vehicle

Greenhouse Gas Emissions

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Producing Electricity in Remote Locations

• 52% of electricity is produced from coal• Coal deposits are generally not close to

electricity demand• The Powder River Basin produces more

that 1/3 of U.S. coal, 350 million tons shipped by rail up to 1,500 miles

• Should PRB coal be shipped by rail?

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Wyoming to Texas Coal Transport

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Transporting Energy from WY to Texas: All New Infrastructure

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50

100

150

200

250

300

350

400

450

Capital O&M Fuel Externalities Total

Ann

ual C

ost (

$mill

ion)

Coal by Rail Coal by Wire Coal to Gas by Pipeline Coal to Gas by Wire

Annual Cost ($millions

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Emissions from Transporting Energy

0

5000

10000

15000

20000

25000

30000

35000

40000

SO2 CO NO2 VOC PM10 GWP(Thousands

of MT)

Emis

sion

s (M

T)

Coal by Rail Coal by Wire Coal to Gas by Pipeline Coal to Gas by Wire

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What Is Best Mode as Scale Increases? Lessons for CA

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500

1000

1500

2000

2500

3000

0 2000 4000 6000 8000 10000 12000Capacity (MW)

Ann

ual C

ost (

$ m

illio

n)

Coal-by-Rail Coal-by-WireCoal-to-Gas-by-Pipeline Coal-to-Gas-by-Wire

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Evaluating Nanotechnogy’sPotential

• The ability to manipulate atoms has the potential for tremendous gains in efficiency, material strength & other properties, lowering energy & materials use, & lowering environmental discharges

• Improving environmental quality & making the economy more sustainable

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Nanotech: Improving Catalytic Converters in Cars

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PGM Requirement for Cat. Converters

Figure 8.2. Estimated annual PGM requirements for vehicles sold in the U.S. (excluding California)

0

50

100

150

200

250

2005 2010 2015 2020 2025 2030

103 k

ilogr

ams

BaselineNew emissions standards with current technologyMaximum improvement with fully effective nanotechnology

51

139

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Estimated annual energy required to produce Platinum Group Metals with EIO-LCA & a Process Model (GaBi) for Three Scenarios

3 0

4 0

5 0

6 0

2 0 0 5 2 0 1 0 2 0 1 5 2 0 2 0 2 0 2 5 2 0 3 0

103

TJ

B a s e lin e s c e n a r io : E IO -L C A , G a B i

N e w e m is s io n s s ta n d a rd s c e n a r io : E IO -L C A , G a B i

F u lly e ffe c tiv e n a n o te c h n o lo g y s c e n a r io : E IO -L C A , G a B i

0

1 0

2 0

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LCA for the Service Sector

• As shown above, the service sector is responsible for a large proportion of energy & materials use & discharges

• We examine whether traditional book distribution is better than E-commerce distribution

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Current vs. E-Commerce Book Distribution

Traditional Book Distribution

E-Commerce Book Distribution

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TABLE 9.8 Estimates of effects of traditional and e-commerce logistics, per book

0

100

200

300

400

500

600

700

800

Energy (MJ) Conventional Air Pollutants (g) RCRA Hazardous Waste (g) Greenhouse Gas Emissions(CO2 dg)

Traditional With ReturnTraditional No ReturnsE-commerce

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Conclusion• LCA is a valuable approach for informing

decisions to improve environmental quality & sustainability

• EIO-LCA has made LCA practical. • Hybrid LCA gives as accurate an answer as

you are willing to spend time & money on• EIO-LCA sparked interest in I-O among

non-I-O professionals: 200,000 web hits• Similar models in EPA, Canada, Japan,

Netherlands, Germany, etc.

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Making EIO-LCA Accessible

• www.eiolca.net makes the software available to everyone at no cost

• Offers 1992 & 1997 benchmark tables • More than 200,000 uses since 2001

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An Invitation• Visit our web site: www.eiolca.net• Papers at www.gdi.ce.cmu.edu• Environmental Life Cycle Assessment

of Goods & Services: An Input-Output Approach explains the method & gives many examples of how to use it. The book will be published by Resources for the Future in December 2005.

• Fliers are available or contact me at lave@cmu.edu