August 7, 2017 by Bo Weidema
At the core of the circular economy concept we find the closing of material cycles through recycling of by-products and wastes (what some people call the “End-of-Life”, see also my earlier blog-post). Recycling is also a topic that has been investigated widely in Life Cycle Assessment (LCA), but here it has turned out to be one of the most difficult areas in which to ensure correct information and to avoid greenwashing. Many seek to use recycling as an argument for avoiding responsibility for environmental impacts. So I thought it might be time to summarize some of the problems we have encountered in our LCA practice, and in this way also inform the circular economy discussion on how to tackle the allocation of responsibility and credits for recycling.
In a situation where all the material for recycling is fully utilised:
- We have seen unfortunate examples where producers seek to wipe off part of their environmental impacts on a high-value by-product, using allocation methods in violation of the ISO standards on LCA, instead of taking responsibility for how their by-products are being treated. An example is where the meat industry seeks to make their meat products look better by allocating part of the meat production impacts to the leather industry – an industry that cannot influence the meat production because there is less supply of hides than what is needed to meet the demand (a situation that is observable from marginal purchasers of leather products needing to accept synthetic alternatives). Instead, meat producers with an ISO-compliant life cycle approach take responsibility for their hides, and to choose the least environmentally impacting processing route, thus stimulating improvements in the leather industry – improvements that are much more difficult for the leather industry when left alone and even burdened on top with “responsibilities” for agricultural activities over which they have no influence.
- We have seen examples where producers seek to take credit for the imaginary benefits of recycling a fully utilised waste material that would anyway have been recycled, compare their recycled products to virgin products, and spending their efforts on competing for the already fully utilised waste material. Instead, producers that follow an ISO-compliant life cycle approach take credit for the actual expected benefits that their recycling activities provide as services to the producers of the waste, and spend their efforts on competing for making the largest benefits from the recycling activity itself.
In a situation where the material for recycling is not fully utilised, i.e. where surplus materials are being disposed of in e.g. a landfill or stockpile, the options and incentives for greenwashing are smaller because here the users of the surplus materials indeed should take credit for removing materials from the landfill or stockpile, thus reducing environmental impacts. The largest errors we see are when suppliers of the surplus materials seek to take credit for the recycling benefits of that part of the material that is being utilised, when in fact the extent of this recycling is determined by the demand for the surplus material and therefore cannot be influenced by the material suppliers.
So, in conclusion, true circular responsibility is when producers take responsibility for how their by-products and wastes are treated, and avoid taking credit for non-existing recycling benefits.
July 25, 2017 by Bo Weidema and Manuel Klarmann, Eaternity
Distributed Ledger Technology, informally nicknamed “blockchain” or “hashgraph” depending on its core database concept, is a new decentralised digital network technology that has the power to disrupt many existing business practices, including banking, insurance, government services and trade, by radically reducing the cost of financial transactions and contract enforcement.
In this blog-post, we investigate how the Distributed Ledger Technology may disrupt the way businesses supply consumers with information on the social or ecosystem impacts of their products – information that is currently provided by eco-labels, fair trade labels and product footprint information, often – or at least ideally – based on product life cycle assessments (LCAs).
A distributed ledger is a chain of time-stamped, cryptographically secured, immutable blocks of consensus-validated digital data, existing in multiple synchronised, geographically distributed copies. Together, these properties make the data practically impossible to tamper with. The technology was first implemented in 2009 as a core component of the crypto-currency Bitcoin.
The Distributed Ledger Technology promises solutions to a number of the current barriers to consumer influence on the sustainability of business practices:
- The difficulty for consumers to express their requirements in a simple way, without the need for all consumers to agree on exactly the same requirements.
- The cost of verifying that the producers live up to the requirements, and the risk that the verification is corrupted.
- The cost of verifying the chain of custody, so that no more certified products are sold than produced.
On the consumer side, the Distributed Ledger Technology offers so-called “smart contracts”: self-executing digital contracts verified for authenticity on the distributed ledger. This means that consumers need not agree on a specific certification scheme. One consumer may want to buy only from supply chains that adhere to a specified fair wage policy, while another consumer may be concerned only with climate-forcing emissions. Both consumers can place their demands (and their time-limited willingness to pay for each requirement) on the digital marketplace in the form of a “smart contract”, promising to release their (premium) payment as soon as a verified supplier has been found. In this way, consumers can make requirements even if there is no current supply chain that fulfils these requirements. In fact, the consumer demands do not even need to be linked to product purchases, but may be seen as separately purchased services. In this way, consumers do not need to look for the certification of every separate product they purchase, but can once and for all (or for example, once a year) decide what demands they want to place on their suppliers and how much they are willing to pay in premium price for each of their requirements. Software apps can help the consumers make informed choices about (adjustments to) their purchasing profile.
For verification, Distributed Ledger Technology can replace costly and corruptible auditors by a crowd-based reporting mechanism, as already implemented in prediction market schemes (see e.g., https://www.augur.net), where verification is converted into a digital asset. The reputation of verifiers is a valuable resource that it takes time and good behaviour to build up, and which it is therefore very costly for a verifier to loose. Any attempt to influence the verification outcomes can furthermore be revealed and intercepted by an economically incentivized whistleblower function. Such decentralised verification does not need to be 100% accurate, as long as the likelihood of being caught lying is high enough and the punishment is expensive enough to discourage the bad behaviour. The higher the desired accuracy, the more costly the verification scheme, but it will still be much less costly than e.g. a physical audit scheme based on accredited accountants or similar schemes that are currently used to verify the integrity of e.g. ecological farming practices. We still need to develop the coarse global reporting mechanisms of the emerging prediction markets into a more granular community-controlled approach that can draw both on expert-knowledge (like Max Havelaar) or people who are just at the right spot (e.g. neighbours to the producers).
It is possible to place requirements on every step in the supply chain. It is relevant to do so, not only to guarantee the chain of custody (ensuring that the amount of certified products sold do not exceed those bought), but also because every step has its own emissions and its own employees. While the behaviour of every supplier needs to be verified by the above procedure of “smart contracts” verified by distributed betting, the distributed ledger ensures the traceability of certified inputs and outputs. With Distributed Ledger Technology, the chain of custody can be ensured without the need for expensive and corruptible paper trails and physical audits. Schemes for authentication of supply chains have already been launched, e.g. by Everledger for diamonds, or more generally by www.provenance.org.
If the consumers are not concerned with the specific origin of each specific product, but only with the overall amount of required behaviour (for example that a fair wage has been paid to the farmer of 10 kg coffee somewhere, rather than that coffee that I buy has been grown by this specific farmer), then the system could be simplified, since the chain of custody would not be needed. It is enough to ensure that there is some enterprise somewhere that has fulfilled the certification requirement for the amount of product or service purchased. For this purpose, there are already nascent initiatives, see e.g. https://medium.com/giveth.
In conclusion, the Distributed Ledger Technology is likely to bring increased quality, credibility and ease of use to sustainability information on products, radically changing the role of formal LCAs in providing this information. From a sustainable development perspective, the largest challenge may be that the new technology does not in itself exclude “greenwashing” – situations as known from some current environmental product declarations where a beneficial location, past good behaviour, or the past efforts of others, are used to market a product as superior, without any guarantees that improvements will be made as a consequence of the purchase. So LCA, which focuses on the consequences of (purchase) decisions, may continue to have an important role to play in educating consumers to know what to look for in a smart contract to ensure that their purchase will lead to actual improvements.
May 26, 2017 by Bo Weidema
In a previous blog-post, I used this picture to illustrate the gap between the available information (the large circles) and how much of this information is typically used by current LCA practice (the smaller circles within each large one):
At 2.-0 LCA consultants we have been working hard to ensure that we use the most recent, transparent, reviewed, and spatially detailed data, modelling economic activities with data from globally complete and physically balanced IO-databases, including rebound effects based on marginal consumer behaviour, modelling impacts with a social footprinting method that covers the total global annual loss of natural habitats, human health, and social wellbeing, and by modelling values with data from welfare economics on market prices and representative population surveys, including equity-weighting and science-based discounting.
But staying on top of the current exponential growth of data requires the use of new social and digital technologies: To make efficient use of the options offered by what Klaus Schwab has called the fourth industrial revolution we need to cooperate as a community and use the automated tools of artificial intelligence to create and use linked open data. This is the reason that 2.-0 LCA consultants have decided to sponsor the work of BONSAI – The Big Open Network of Sustainability Assessment Information.
We see how other scientific communities, from astronomy to deep earth seismology, struggle with the same problems of managing the unprecedented amount of data needed to provide increasingly precise understanding and predictions within their fields. We see how these scientific communities have embraced open data as fundamental for the advancement of their research, and have started to cooperate across scientific disciplines.
Last month, I attended – together with BONSAI executive Michele De Rosa – the 9th plenary meeting of the Research Data Alliance (RDA). RDA is a community-driven organization with more than 5000 members from 123 countries, building the social and technical infrastructure to enable open sharing of big data. It was a vibrant, overwhelming experience that confirmed to us that the time for open science is now mature. With an interdisciplinary perspective, the many Interest Groups (IG) and Working Groups (WG) in RDA address common problems such as how to harmonize metadata structure, how to address data classification issues, how to credit scientists for sharing data, how to address the legal issues concerning the sharing and harvesting of data. If you are curious to know more, a full report from our activities at the RDA plenary is now available.
The scientific domains of LCA, industrial ecology and IO-economics, were, to our knowledge, represented at RDA for the first time by us, which made us feel more like representatives of a laggard community than pioneers.
We believe that the LCA community needs to come up to speed and engage more intimately with the data science community, and we therefore intend to maintain a constant presence in RDA. Plenaries are held twice a year and the next plenary will be in September in Montreal. We are working on a session proposal to create an Interest Group within RDA to target the needs of our scientific domain and invite the LCA community to join us with contributions and suggestions.
April 24, 2017 by Jannick H. Schmidt
At their plenary session this month, the Members of Parliament voted on a resolution calling on the European Commission to work towards a European certification scheme for palm oil entering the EU market.
This political move comes at a most opportune moment for us here at 2.-0 LCA consultants; as we just this week are able to announce that our crowd-funded initiative: LCA of RSPO certified palm oil is up and running with currently 12 palm oil producing/using industries as members of the club. The initiative aims to compare the environmental profile of certified palm oil to non-certified palm oil in the market. Our project will be based on the already existing certification scheme by RSPO – but we hope to produce evidence, using life cycle thinking, that will also be relevant for a possible European certification scheme.
The Members of Parliament also call for a ‘phasing out of the use of vegetable oils that drive deforestation by 2020’. In our previous analysis of various biofuels, including several different vegetable oils, we found that a significant hotspot in the biodiesel product system is indeed indirect land use (deforestation) (Schmidt and Brandão 2013; Schmidt 2015). Regardless of which vegetable oils are used for biodiesel, our findings indicate that an increase in the use of biodiesel will lead to higher greenhouse gas (GHG) emissions, mainly because of the consequences of the indirect land use. On top of that, biodiesel from vegetable oils is associated with high impacts on biodiversity: deforestation caused via indirect land use changes.
In their press release the European Parliament also note that a major use for the European imports of palm oil is for biofuels. Kateřina Konečná, who edited the report on palm oil and deforestation of rainforests for the European parliament says that she hopes for a ‘total’ phase out of this use for palm oil. We have previously demonstrated that palm oil is the oil affected when there are changes in the demand for any unspecified vegetable oil (Schmidt and Weidema 2008). Therefore we believe that it is rather the entire market of vegetable oils for biofuels that needs to be discussed. Naturally, palm oil can be a suitable starting place for the discussion, and in this light we are hoping for a balanced response by European Commission.
In a market where everything is linked and palm oil is the additional supply for any demand for vegetable oil, a specific political ban on palm oil is not an efficient way forward. A better approach for the European Commission would be to reconsider the targets to increase the European use of biofuels in light of the evidence of its actual environmental consequences. Or at the very least to ensure that the sustainability criteria (See DG-Energy) for the European use of biofuels includes indirect land use effects. This is needed in order to actually reduce greenhouse gas (GHG) emissions – with consequences for the entire market of biofuels.
Instead of banning palm oil, we emphasize that a more efficient way to reduce the environmental impact is to collaborate with the palm oil industry. In fact, palm oil is the only major oil in the market, where there is a formalised way to make a difference with regard to deforestation, i.e. demanding oil from industries which ensure nature conservation within their concessions as well as in their surrounding communities.
Schmidt J (2015). Life cycle assessment of five vegetable oils. Journal of Cleaner Production 87:130‑138 http://lca-net.com/p/1719
Schmidt J, Brandão M (2013). LCA screening of biofuels – iLUC, biomass manipulation and soil carbon. This report is an appendix to a report published by the Danish green think tank CONCITO on the climate effects from biofuels: Klimapåvirkningen fra biomasse og andre energikilder, Hovedrapport (in Danish only). CONCITO, Copenhagen. http://lca-net.com/p/227
Schmidt J, Weidema B P (2008). Shift in the marginal supply of vegetable oil. International Journal of Life Cycle Assessment 13(3):235‑239. https://lca-net.com/p/995