Title: Opportunity cost principles for life cycle assessment: toward strategic decision making in agriculture

Authors: Daniel Berlin, Hans-Erik Uhlin

Addresses: Department of Economics, Swedish University of Agricultural Sciences, Box 7013, SE-750 07 Uppsala, Sweden. ' Department of Economics, University of Gavle, SE-801 76 Gavle, Sweden

Abstract: Life cycle assessment (LCA) is increasingly used for products that require natural resources as important inputs. Relating environmental impacts to the whole production chain makes the method often interpreted as holistic and useful for environmental policy and strategic decision-making. The authors of this paper argue that there are limitations of using LCA for such purposes in food production. Using a product context as basis for the functional unit and the system boundaries may result in false indications of total environmental impacts. Therefore, we suggest that opportunity cost (OC) principles should be included into the LCA method. The significance of the OC principles is shown by using a published case study comparing a conventional and an organic milk production system. The LCA-OC assessment shows that extensive organic farming may result in higher outputs of greenhouse gases than more intensive conventional methods when related effects of alternative land use are considered.

Keywords: life cycle assessment; LCA; land use; opportunity cost; strategic decision-making; policy; conventional milk production; organic milk production.

DOI: 10.1504/PIE.2004.004678

Progress in Industrial Ecology, An International Journal, 2004 Vol.1 No.1/2/3, pp.187 - 202

Available online: 25 May 2004

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