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Ecospace Audit - An input Analysis for Products

2. Analysing resource use at the company level

2.1 A sustainable company?

Following the same line of reasoning of Chapter 1 for sustainable resource use level at the national level, one could try to set sustainability targets at the company level as well. For example; if a company emits 100 tons of CO2 per year in 1990 then a sustainable level would be 50 tons of CO2 per year in 2010. This approach, however, is far too simple. It is not possible to do this as straightforwardly as we might want.

1. First of all we need to focus our attention not at the production level alone but at the whole life cycle of products. Energy use and material use during the consumption phase are often as important - sometimes more important - than resource use during the extraction and production phase. One can take account of this fact by analysing energy and material consumption during each phase in the assessment. This approach is taken in the Ecospace Audit in Chapter 3.
2. A reduction in absolute terms of resource use at the company level does not say anything about the development of the levels of absolute net primary resource use in a society, let alone globally. On the other hand, if at the same production volume of products and services, all the companies in the entire world were to use 75% fewer resources over the whole life cycle of each product, then production levels would be headed in a sustainable direction. The argumentation is the same at the level of the individual. If others are not demonstrating sustainable behaviour, we do not then say that an environmental friendly person living within his or her fair share is not living sustainably. Rather, we would say that he or she is living a sustainable lifestyle whereas others should change their lifestyle in a more sustainable direction.
3. Reductions in resource use at the company level are often described in RELATIVE terms. As production levels increase in absolute terms the performance of the company is perhaps becoming environmentally friendlier than before but is not becoming sustainable overall. This criticism of eco-efficiency efforts is absolutely correct. Efficiency improvements per product do not necessarily make production and consumption patterns more sustainable if continually more products/services are consumed. Here the question of current and future market penetration becomes essential. If global market penetration is 100% (the product being present in all households) and no increase in this market penetration can be expected on reasonable grounds, then a factor four decrease in materials, energy, etc. use will finally bring the consumption of this good by 10 billion consumers within the fair share of the environmental space for the consumer. However, most people in the world will still be hoping ‘to become a consumer’ in the coming decades.
4. For some products or services, an increase in absolute terms is to be expected when society develops in the direction of sustainability. For example, a factory producing trains is to be expected to increase its levels of resource use in absolute terms (producing more trains). For a company such as this, monitoring an increase in resource use would be a good development for a society developing in a sustainable direction rather than a bad result. However, a precondition for this to be sustainable is that at the level of a company producing a product/service that fulfils the same need a reduction in resource use is monitored - at a car manufacturing company, for example. In this sense it would be helpful for companies when addressing the challenge of absolute resource use reduction to ask the question: what need does our product fulfil and can this need be addressed in a different way. For example by leasing a product or by delivering a service.
5. Finally, even if a company is realising in both relative terms (per product/service delivered) and absolute terms a factor four or even ten improvement it does not show the social structure and position of a company. The socio-political position of a company is not revealed by these indicators. A company supporting an oppressive regime or a company suppressing its labourers or indigenous peoples may (in theory) achieve factor four or factor ten and still cannot be named sustainable. Companies have to make sure that their own locations, but also their suppliers in developing countries are still behaving in a environmentally and socially responsible way. Social and environmental sustainability needs to be considered over the whole life cycle!

2.2 Important elements to be considered when assessing the sustainability challenge of a product/service

1. Consider the whole chain

It is always desirable to increase the efficiency of production, but the aim should be to increase the efficiency over the whole chain. For example it is not useful to make a large effort in the production process in the situation expressed in table 2. In this example efforts clearly need to be focused at the consumer phase.

Table 2
Indicative resource use at different levels of a product/service for different situations.

Look here!

2. Consider expected future penetration in the market

The issue of market penetration seems to be key in assessing the sustainability challenge of a product/service. This element forms the linchpin to constructing the Ecospace Audit that incorporates the notion of sustainable consumption or end use levels.

It is important to distinguish between products that have full market penetration and products/services that are still increasing their market share. A factor 10 improvement of a product that is fully penetrated into the market at a global level (so for 6 billion consumers) indeed leads to a factor 10 reduction in final consumption of resources in an absolute sense. If a product has a low market penetration this is not the case. For example, think of computers with a penetration level of somewhere around 20-30% in industrialised countries. At the global market level this is probably only 5%. Here it is clear that a factor 10 improvement in this technology will not be sufficient if we accept the fact that in the long term we will be living in a world with 10 billion consumers with (on average!) relatively high levels of free disposable income.

Table 3 presents the development in market penetration in Dutch households since 1990.

Table 3
Possession of durable consumption goods in the Dutch household

Look here!

From table 3 it becomes clear that the dematerialisation demand for solariums in the Netherlands will be different than for washing machines. Washing machines have an almost 100% market penetration and factor four in that case means producing washing machines that use 75% less energy and materials over the whole life cycle. Extending the product’s average lifetime from 15 to 30 years would already contribute to a 50% reduction in material use. In combination with complete material reuse, a 75% target is clearly feasible. For solariums, full market penetration in combination with sustainability demands will mean a factor 40 improvement in energy and material requirements. It is highly doubtful whether that is achievable but that is not the point of the discussion here. Each producer will have to find its own ways how to contribute to sustainability and the Ecospace Audit worked out below is only instrumental in pointing out and monitoring progress or failure of achieving this challenge.

3. Consider rebound effects and income effects

Adapted products/services need to be assessed on their rebound effects as well. To illustrate, the combination of a computer with a copying machine, video cassette recorder, scanner, fax and telephone might lead to a huge reduction in materials used. But it might also stimulate households to buy a product which they might not have bought otherwise. The result is a stimulation in additional energy and material use rather than a reduction. On the other hand, if the TV and PC were to be combined than this would reduce material use as instead of two monitors only one monitor would be needed.

Some efficient products will lower the cost of purchasing or using them, providing the consumer with extra savings that can be used - or will stimulate using more of the product or service: such as efficient light bulbs which can help poor people to pay their energy bills but which can stimulate wealthy households to light their gardens at night.

4. Be realistic about the boundaries of input/resource use analysis at the company level

An important complicating factor of assessing the resource use at the company level is the emergence of a new product or a new company. Bringing a new, extra product on the market automatically leads to increased levels of resource use. Let’s take the hypothetical case that the world has become sustainable. 10 billion people are consuming sustainable products produced by sustainable companies. The environmental space for fossil fuels, renewable energy, wood, non-renewables, land, water, etc. is being used completely. So any extra activity will have an impact on nature, climate, etc. This can only work when another product or activity is replaced by this product (Steady Flow Economy). Monitoring at the factory level, however, does not bring this option in sight.

Sustainable levels of (resource) consumption can in the end only be monitored at the national, continental (EU) and global level. Even a dematerialisation by a factor 10 of a mattress can contribute to increased resource use in other areas. If the dematerialised product leads to reductions in household expenditure, the savings could be used to buy energy and material intensive goods/services. Having said that, it would still be very useful if companies took their responsibility to dematerialise as well as to promote policies which encourage dematerialised production and consumption patterns.

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