Interpretation of Value Added results

Question

Dear openLCA staff, dear Dr. Ciroth,

I am working on a comparative LCA and eLCC of several products using OpenLCA and Ecoinvent, for which I modelled the full life cycle from production to the purchase of the consumer to disposal. The focus of the study is the amount of product being lost between the production company and the consumer.

I have read your explanation of value added and its integration into OpenLCA, but I have a hard time with my interpretation.

To me it seems that the more resources a product consumes for its production, the higher (better) the VA results become. Further, the higher the product loss after the purchase is, the higher the VA results become. Do I understand correctly that the production company generates more revenues if the loss at consumer side is higher since it can then sell more products? And is the VA higher with a higher resource consumption in the production since all the production companies providing their resources are making more revenue?

If I understand correctly, is VA a proper method for assessing economic sustainability?

Kind regards

Bernhard

Answer 1

Hallo Bernhard,

well, the Value Added is indeed a quite simple indicator and just the opposite of costs, in our implementation. Value added over the life cycle is the same amount as Life Cycle Costs. Since the costs are real money flowsin ecoinvent, and not monetised externalities, the costs of one actor in the supply chain are the value added created.

That said,

is VA a proper method for assessing economic sustainability

- VA as an indicator for economic sustainability, but quite a simple one.

Hope this helps!

Andreas

Comments

Hallo Andreas,

thank you for your answer. Indeed, VA seems to be quite a "simple" indicator. Hopefully, OpenLCA will provide a more "elaborate" way to quantify economic sustainability in the future!