Life-Cycle Value Assessment of Greenhouse-Gas Mitigating Technologies

Abstract

In order to fully understand the complete benefits and costs of alternative energy sources compared to conventional energy sources, one must consider the entire life-cycle from raw material extraction, through production and delivery to final energy use. This paper describes the advantages of applying Life-cycle Value Assessment (LCVA) as a tool for technology assessment and greenhouse gas reduction measurement and analysis. The LCVA tool has been used extensively to evaluate existing and emerging technologies in Canada. LCVA has been developed by the Pembina Institute in cooperation with several of Canada's leading energy companies who are seeking a practical method for better understanding and integrating environmental impact information with financial analysis for better business decision making. Life-cycle Value Assessment is: a business analysis tool providing more complete information for making better project decisions on the basis of environmental, financial and socio-economic considerations; a design improvement tool that identifies and analyzes full costs and benefits of various options for reducing environmental impacts and improving total project economics; a pragmatic merger of environmental life-cycle analysis, business financial value assessment, and systems (process) engineering design improvement. LCVA uses a systematic methodology to identify, quantify and analyze the environmental, financial, and social implications of each of the activities involved in producing and consuming a product or service. Using this tool can identify opportunities to improve the technical design, upgrade operating procedures, or substitute processes and materials in order to reduce costs, reduce environmental impacts, and help ensure employee and community satisfaction. LCVA also extends this systematic analysis beyond the normal "corporate boundaries" of direct company activities, to include all life-cycle stages of a technology, process, or product. These life cycle stages typically flow from extraction of raw materials, through manufacturing, transportation and customer use, to final disposal or recycling. This "cradle-to-cradle" analysis ensures that decision-makers are aware of the total system impacts of a decision, and do not unknowingly shift costs or environmental burdens onto others at "upstream" or "downstream" stages of the life-cycle. The following diagram depicts an overview of LCVA: Some examples of the technologies LCVA has been applied to include: Hydrogen supply options for fuel cell vehicles; Wind turbines: life cycle air emissions compared to traditional Alberta energy sources; Sulphur Extraction: environmental and financial implications of a soil/sulphur separation technology; Coal Bed Methane: life cycle comparison to traditional gas production operations; Landfill Gas Energy Application: compared to conventional landfill practices; Microturbine: solution gas management option comparison; MSW Co-composting: comparison of traditional landfilling/spreading to soil amendment production. LCVA can also be applied as a rigorous method to quantify greenhouse gas reductions through technology application. Using this approach not only results in a higher degree of certainty in the reduction amount, but provides a better understanding of the associated project boundaries and risks of "double-counting". A life-cycle approach, such as LCVA, is essential to credible verification of greenhouse gas reduction projects. Life-cycle Value Assessment provides a decision making framework to meet corporate, government and public's needs of integrating economic, social, and environmental factors into business decision making, technology selection, and project design.