Integration of Methods for Environmental Assessment and Investment Analysis

Abstract

Background, aim and scope. In this thesis a framework for integrating life cycle assessment and investment analysis is derived, aimed to (1) unite economic and environmental perspectives, and (2) strengthen system borders. The application of the model is shown in a case study of a bioenergy facility in central Norway. Prices and environmental impacts are calculated, and the results are compared to those for electricity generated from natural gas. Two examples of utilisation of the results are presented. Methods. Hybrid life cycle assessment is employed to enable the use of the price model from input-output analysis. The price model is extended to facilitate the integration of investment analysis. The resulting framework embodies all aspects from investment analysis, including tax and discounting. The result is a model performing a state of the art hybrid life cycle assessment and a net present worth analysis to obtain environmental and economic results with consistent system borders. Application. The method is applied to a case study, evaluating an electricity generating bioenergy facility in central Norway. The bioenergy facility was found to be a viable investment. Using bioenergy as an abatement measure against global warming was found to be competitive against carbon credits in the case of CO2 quota prices at the level assumed in 2030. Results and discussion. The model produced robust results comparable to those found in other studies. The framework proved to have several advantages in addition to strengthened system borders; amongst others a mutual empowerment between the two base analyses in relation to decision making, and a possibility for establishing eco-efficiency indicators.