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Input/Output analysis - Shortcuts to life cycle data?

15. Report from discussion

15.1 General discussion

This chapter summarises the general discussion, which followed the presentations.

The debate was structured around the following issues:

This chapter is based on notes taken during the discussion. It may contain errors or interpretations, which are solely the responsibility of the authors of this report.

15.2 What role should IOA play in relation to LCA?

Anders Schmidt, dk-TEKNIK, felt that Manfred Lenzen had exaggerated the incompleteness of process-based LCA and the need for IO-data to expand the system studied. He suggested that the data left out in some cases might be similar in all studied systems, and therefore not important for the final assessment. He asked if similar products, like two plastic cups could be compared on 1st tier process-data?

Manfred Lenzen rejected the possibility for short cuts with the words: "you don’t know how wrong or right you are, before you have done the calculations". Greg Norris agreed that traditional LCA leave out processes in depth as well as in breadth, and that magnitude of this error is unknown.

Tapio Pento, University of Jyväskylä, saw other ways to increase certainty of LCA. He referred to his own research working with LCA on paper and steel for 10 years, in the last 5 years partly using IO-data. His experience was that IO-data was mainly relevant for services, while for materials IO-data would in some cases increase the error of the assessment compared to process data, since it hides the underlying variation of factor 2 to 10 in the measured data, both within and between mills. Many LCA data are published with little information on the conditions and limitations of the measurement. Also allocation gives rise to uncertainty, also or maybe even especially within IO-data, since there is little reason to believe that emissions are related to monetary costs.

Manfred Lenzen answered that process-based data are biased because of the truncation error. Proces-data will always be too low, whereas IO-data may be either too high or too low. He asserted that IOA should not be used as a stand-alone tool but in the form of hybrid tools.

Bo Weidema pointed out that the questions to be solved by LCA and IOA are not the same. Referring to Marianne Wesnæs’ presentation he argued that product development was hardly possible based on IO-data alone.

Greg Norris pointed out that the applicability of national statistics in respect to environmental assessments varies considerably between countries. In e.g. USA and Finland the organisations collecting production and trade data are different from the ones collecting the environmental data, and also applying different classification systems. In e.g. Denmark and Canada the national statistics to some extent collect both types of data, making it easier to combine the knowledge.

Ole Gravgård Pedersen, Statistics Denmark, explained about international work on standardising the system of classification, in order to facilitate usage of data on the national as well as international level. The work is done within EUROSTAT, and the task for now is to harmonise systems for national accounting matrices and environmental accounts (NAMEA). He suggested that IOA and LCA should be used in combination, researching the differences to adjust the results. In this way IOA should be used to scope the LCA.

Sangwon Suh argued that in spite of improvements in the classification system, classification problems would persist since IO table is constructed based on input homogeneity while emission data are available on an establishment basis. He also pointed that the Monte-Carlo type of uncertainty analysis in IOA will result in more certain outcomes than individual parameters that were used in the assessment because of the cancellation effects which can be characterised as "Garbage in, fancy things coming out".

Bo Weidema concluded that the answer to the first question on the discussion agenda was that the role of IO-data in relation to LCA is to be used as a supplement, to give an overview of effects and to validate process data.

15.3 Advantages and disadvantages of increased use of IOA and IO-data in LCA

Marie Münster, Rambøll, feared that the use of IO-data could be a sliding-lane leading to decreased accuracy. If we allow filling gaps with cheap IO-data, performers of LCAs with big gaps will be rewarded.

Manfred Lenzen responded by referring to a method introduced by Graham Treloar, Deakin University in Victoria, based on previous work by C. Bullard. First, the assessment is carried out merely with IO-data. Secondly, the chains are ranked according to the relative contribution to the total result, thus implying a data collection strategy. Third and finally, process data can be collected until the desired level of accuracy is reached.

Jesper Munksgaard said that the model’s level of complication should equal the level of details inherent in the questions asked by the decision makers. Anders Schmidt added that in his view most decision-making was done on basis of quite rough indicators, and that a certainty level of 75 % would satisfy most. Tapio Pento argued that decision makers regulate at industry level, and does not need much more detail with regard to single products.

Bo Weidema raised the question whether knowledge from IO-tables can be extrapolated geographically, or whether the data will differ from country to country.

There was a general scepticism towards geographical extrapolation. Sangwon Suh pointed that many developing countries are using IPPS of the World Bank (http://www.worldbank.org/nipr/polmod.htm) for emission data compilation; however, this system was originally based on US TRI data so that there is very limited applicability to other countries where technologies are different. Marie Münster added that many environmental problems are related to behaviour, and that behaviour therefore also should be similar.

Tapio Pento once more pointed to the value of process-based data by pointing to the national focus of IOA, giving rise to a geographic truncation error. In IOA all import is assumed produced using technologies similar to the domestic production.

There was a general agreement that IO-tables aggregated on international level could help to solve this import problem, and thus increase the reliability of IO-data. Sangwon Suh referred to the project at CLM, where an international IO-table is produced, covering 80 % of global production.

Christian Poll, Danish Environmental Agency, was concerned about the consequences for sustainable development, and asked whether the implicit economic focus in IO-data would not mean that the use of IO-data would work counter to the decoupling of economic growth and environmental problems.

Greg Norris answered that the current type of IOA could only be static, and give snapshots of current situation. Ole Gravgård Pedersen supplemented that IOA does have a static, historic perspective, but it consists of many different parts, which change. Therefore it is possible to distinguish between factors as level of consumption, energy demand in different sectors, energy efficiency etc.

Bo Weidema pointed out that traditional process LCA often leave out the actual economic implications of shifts between products, namely that a shift to an expensive product will prevent some other consumption. He felt that an IO-based analysis would be less likely to make this mistake, since it measures consumption in monetary terms.

15.4 Market based LCA and IOA. Possibilities for more economic modelling and forecasting?

A question from the floor raised the issue of co-product allocation.

Greg Norris explained that IO-data by default are allocated according to value, and that this could imply errors. When using the data for LCA, some kind of physical modelling should therefore be preferred.

Bo Weidema added, that modelling is essentially what everybody wants, but whether it is actually done depends upon the resources available for the specific study. For LCA, co-product allocation is unnecessary, because it is possible in most cases to define the marginal technology, i.e. the technology that is actually affected and will increase or decrease the production capacity in order to accommodate the change in demand related to the product under study.

However, Bo Weidema raised the question whether such marginal analysis can be integrated in IOA.

There was a general agreement from the panel that it is possible in principle to make such integration, and that it is mainly a data problem to identify the constraints that the technologies are subject to.

Sangwon Suh pointed out that it was a difficult and time-consuming question. At the Dutch institute RIVM, a special group is employed to deal with the question about effects of consumption changes.

Greg Norris pointed out that there are two parameters for the dynamic modelling: average/marginal and linearity. The models closest to reality might be marginal and non-linear, but taking into account that the traditional approach is average and linear, the scientific standard is improved significantly by moving to linear, marginal modelling.

15.5 Need for further initiatives?

Anders Schmidt pointed out that for practical use it was necessary to have a clear method for how little data was necessary to reach a reasonable certainty of the study. Thus a quantification of the uncertainties by speed of conversion per sector (or per input) is needed. Bo Weidema suggested to this end that Treloars’ method should be tested and developed in a practical case study with Danish data.

Manfred Lenzen was curious about the audience´s reasons to show up. In response to this, Arne Egelund, Technical University of Denmark, said that he had hoped for an easy method to make traditional LCAs more complete.

Greg Norris launched the vision of a computer program for environmental assessments with a default IO-database as fallback, still offering the opportunity to insert process-data. Tapio Pento and Sangwon Suh pointed to the program KCL ECO, which uses the IO-relevant inverted matrix calculation.

Bo Weidema asked what plans Statistics Denmark had for producing IO-tables with physical units. Ole Gravgård Pedersen answered that the NAMEA work continues, but that there are no present decisions on whether the work on complete physical input-output tables will be continued. He pointed out that degree of external demand would be taken into account before work continues.

15.6 References

Bullard et al. (1978). Net energy analysis – handbook for combining process and input-output analysis. Resources and Energy, 1, pp. 267-313.

Treloar, G.J. (1997). Extracting embodied energy paths from input-output tables: Towards an input-output-based hybrid energy analysis method. Economic Systems Research, vol.9, no.4.

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