Environmental Life Cycle Costing

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ISBN: 9781420054705 | 1420054708
Cover: Hardcover
Copyright: 5/29/2008

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Responding to the need for clarification and benchmarks, Environmental Life Cycle Costing provides the fundamental basis on which to establish a definitive methodology. Clearly defining environmental LCC, this book balances scientific and economic points of view and thoroughly addresses the management perspective.

List of Figures	p. xiii
List of Tables	p. xv
About the Editors	p. xvii
Contributors	p. xix
Preface: About This Book	p. xxi
A Dialog, over Coffee, about Life Cycle Costing	p. xxiii
Executive Summary	p. xxviii
Three Categories of Life Cycle Costing	p. xxvii
System Boundaries in Environmental Life Cycle Costing	p. xxviii
Example Calculations in Environmental Life Cycle Costing	p. xxx
Introduction: History of Life Cycle Costing, Its Categorization, and Its Basic Framework	p. 1
History and Development of Conventional LCC	p. 1
Types of LCC	p. 4
Conventional Life Cycle Costing	p. 6
Environmental Life Cycle Costing	p. 7
Societal Life Cycle Costing	p. 8
Two Key Limitations of LCC to Be Tackled by Environmental LCC	p. 9
Need for Different Perspectives	p. 9
Life Cycle Costing Planning versus Life Cycle Costing Analysis	p. 11
The Requirement and General Framework for Environmental Life Cycle Costing	p. 12
Goal and Scope Definition	p. 12
Information Gathering	p. 13
Interpretation and Identification of Hotspots	p. 15
Sensitivity Analysis and Discussion	p. 16
Modelling for Life Cycle Costing	p. 17
Introduction	p. 17
Cost Models	p. 18
Cost Categories	p. 19
Cost, Revenue, and Benefits	p. 19
Market Prices and Value Added	p. 20
Four Levels of Cost Categories	p. 21
Cost Estimation	p. 24
Cost Bearers	p. 25
Uncertainties and Inconsistencies in Cost Data	p. 28
Definitions of Cost Collection Methods	p. 28
Geographical Differences and Exchange Rates	p. 29
Confidential Information	p. 29
Cost Aggregation	p. 29
Discounting	p. 30
Long-Term Discounting of Costs and Environmental Impacts in Societal LCC	p. 31
Environmental Life Cycle Costing	p. 35
Objectives of Environmental LCC	p. 35
System Boundaries and Scope	p. 36
Market Structure, Environmental Taxes, and Subsidies	p. 36
Product Life Cycle from Economic and Environmental Perspectives	p. 37
Scope of Environmental LCC	p. 39
What Environmental LCC Is Not	p. 40
Calculating Life Cycle Costs Based on the Process LCI of LCA	p. 41
General Procedure	p. 41
Specific Methodological Issues: Similarities and Differences between LCA and LCC	p. 42
Definition of Functional Unit and Reference Flows	p. 42
Definition of Unit Processes, Data Aggregation, and Data Availability	p. 42
Allocation in Environmental LCC	p. 43
Use of Discounted Cash Flow	p. 44
Data Compilation and Aggregation	p. 44
Interpretation of Environmental LCC Results	p. 48
Environmental LCC in Relation to Conventional and Societal LCC	p. 49
Calculating Life Cycle Costs Based on Hybrid LCA	p. 51
Input-Output Methodology	p. 51
Costs and Prices in Input-Output Analysis	p. 51
Introducing the Use Cost	p. 52
Introducing the End-of-Life Cost	p. 52
Internalizing External Costs	p. 53
Numerical Example of I-O-Based LCC for the Washing Machine	p. 54
I-O Data for the Washing Machine Case	p. 54
I-O Results for the Washing Machine Case	p. 54
Integrating External Effects into Life Cycle Costing	p. 59
Introduction	p. 59
Definition, Identification, and Categorization of Externalities	p. 60
Selection of External Cost Categories for Inclusion	p. 60
Categorization of Externalities	p. 61
Consideration of 3rd Parties and Possible Sanctions	p. 62
History and Ethics	p. 62
Environmental Impacts	p. 63
Social Impacts	p. 63
External Economic Impacts	p. 64
Monetization	p. 64
Some Quantitative Examples of Monetized Impacts	p. 66
Damage Cost	p. 66
Prevention Cost	p. 67
Monetization of Social Impacts	p. 68
Internalizing Externalities	p. 69
Sustainability's Potential Impact on Profitability and Shareholder Value	p. 73
Revenue	p. 75
Operational Efficiency	p. 75
Access to Capital	p. 76
Life Cycle Costing in Life Cycle Management	p. 77
Corporate Perspective	p. 77
Integrating LCC into Management	p. 78
Long-Term Costs	p. 78
Indicators and Their Normalization	p. 80
Indicator Validation and Supply Chain Issues	p. 81
Presentation of LCC Results	p. 82
Interfaces to Sustainable Development, IPP, and Social Aspects	p. 82
Environment and SMEs	p. 84
Continuous Product Improvement	p. 85
LCC and LCIA in EcoDesign	p. 85
Evaluation Techniques, Complementary Tools, and Trade-Offs	p. 87
Discussion of the Case Studies from a Corporate Perspective	p. 90
A Survey of Current Life Cycle Costing Studies	p. 91
Intention	p. 91
Relation of This Chapter to the Other Chapters	p. 92
Parameters and Settings of LCC Studies in Practice	p. 92
Sampling Procedure of Studies for the Survey	p. 94
Summary of Results	p. 94
Overview of the Statistics	p. 95
Costs Considered, and Not Considered, in the Case Studies	p. 98
Data Sources and Calculation Method Used	p. 100
Uncertainty and Discount Rate	p. 100
Selected Goal and Scope, Approaches, and Result Patterns from the Survey	p. 102
Use Cases per LCC/LCA Method	p. 102
Total Life Cycle Costs, and the Method of Cost Estimation, per Type of LC Approach	p. 104
Duration of Life Cycle Considered and Duration of Study, by the Type of LCC	p. 105
Life Cycle Duration and LCC Discount Rate	p. 106
Addressees of the Studies per Type of Application	p. 107
Source of the Approach per Type of Study	p. 107
Outlook: Toward an LCC Case Study Library	p. 108
Analysis of the Survey's Results	p. 108
Conclusions and Questions	p. 109
Time-Related Questions	p. 109
Result-Related Questions	p. 109
Functional Unit-Related Questions	p. 110
Tentative Answers	p. 110
Life Cycle Costing Case Studies	p. 113
Introduction	p. 113
Organic versus Conventional Extra-Virgin Olive Oil	p. 118
Summary	p. 118
Definition of the Case Study	p. 118
Entry Gate and Drivers	p. 118
Implementation	p. 118
Overview of Tools Used	p. 120
Wastewater Treatment	p. 121
Summary	p. 121
Definition of the Case Study	p. 121
Entry Gate and Drivers	p. 124
Implementation	p. 125
Overview of Tools Used	p. 126
A Comparison of Energy Saving and Incandescent Light Bulbs	p. 126
Summary	p. 126
Definition of the Case Study	p. 126
Entry Gate and Drivers	p. 127
Implementation	p. 127
Overview of the Tools Used	p. 128
Double-Deck Carriage Floor (BAHNKREIS Project)	p. 129
Summary	p. 129
Definition of the Case Study	p. 129
Entry Gate and Drivers	p. 130
Implementation	p. 131
Overview of the Tools Used	p. 132
Washing Machine	p. 132
Summary	p. 132
Definition of the Case Study	p. 134
Entry Gate and Drivers	p. 136
Implementation	p. 138
Overview of Tools Used	p. 139
Hypothetical Case: A High-Capacity Glass Cable Network for Data Transmission	p. 139
Summary	p. 139
Definition of the Case Study	p. 139
Entry Gates and Drivers	p. 140
Implementation	p. 142
Overview of the Tools Used	p. 143
Passenger Car	p. 143
Summary	p. 143
Definition of the Case Study	p. 143
Entry Gate and Drivers	p. 147
Implementation	p. 148
Overview of Tools Used	p. 148
Life Cycle Costs of Real Estate	p. 148
Summary	p. 148
Definition of the Case Study	p. 148
Entry Gate and Drivers	p. 151
Implementation	p. 151
Overview of Tools Used	p. 151
Conclusions	p. 153
Three Types of Life Cycle Costing	p. 153
Conventional LCC	p. 153
Environmental LCC	p. 154
Societal LCC	p. 154
Temporal Aspects and Discounting of LCC Results	p. 155
Learnings from Applied LCC Carried Out to Date	p. 155
State of the Art and Rules of Thumb in Carrying Out Life Cycle Costing	p. 156
Outlook: Role of Environmental Life Cycle Costing in Sustainability Assessment	p. 157
Sustainability	p. 157
Status of Development	p. 158
Life Cycle Assessment (LCA)	p. 158
Life Cycle Costing (LCC)	p. 160
Societal Life Cycle Assessment (SLCA)	p. 160
Discussion	p. 161
Appendices	p. 163
Appendix to Case Study Boxes: Washing Machines and Private Laundry in Europe, North American, and Asia and Japan	p. 163
Appendix to Chapter 4: Social Impacts	p. 165
Appendix to Chapter 6: Survey Form: For the Investigation of LCC Parameters	p. 168
Glossary	p. 173
References	p. 175
Index	p. 185
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Environmental Life Cycle Costing

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