(751c)   Green Net Value Added As a Sustainability Metric Based on Life Cycle Assessment: An Application to Bounty® Paper Towel

Authors: 
Demeke, B., U.S. Environmental Protection Agency
Ingwersen, W., U.S. Environmental Protection Agency
Sustainability measurement in economics involves evaluation of environmental and economic impact in an integrated manner. In this study, we combine system level economic data with environmental impact from a life cycle assessment (LCA) of a common product. We are exploring a costing approach that captures traditional costs and incorporates externality costs to provide a convenient, easily interpretable sustainability metric. Green Net Value Added (GNVA) is a type of full cost accounting that incorporates total revenue, the cost of materials and services, depreciation, and environmental externalities. It adjusts the traditional economic value added for environmental externality costs. Two, but not all, of the potential environmental impacts calculated by the standard LCIA method (TRACI) could be converted to externality cost values. We compute externality costs disaggregated by upstream sectors in order to accurately reflect the externality costs associated with different industries along the supply chain. We preset full cost, green profit and GNVA to evaluate the relative sustainability of Bounty® paper towels manufactured at two production facilities. We found that the longer running, more established line had a higher GNVA than the newer line. The dominant factors contributing to externality costs are to come from the stationary sources in the supply chain: electricity generation (27-35%), refineries (20-21%), pulp, and paper making (15-23%). Health related externalities from Particulate Matter (PM2.5) and Carbon Dioxide equivalent (CO2e) emissions appear largely driven by electricity usage and emissions by the facilities, followed by pulp processing and transport. Supply chains for other facility purchases, product distribution, and end-of-life management (landfilling/incineration) contribute the least to the environmental health-related costs.