The Eco-Costs of Material Scarcity, a Resource Indicator for LCA, Derived from a Statistical Analysis on Excessive Price Peaks

Joost Vogtländer, David Peck and Dorota Kurowicka
Additional contact information
Joost Vogtländer: Faculty of Industrial Design Engineering, Department Product Innovation Management, Delft University of Technology, 2628 CE Delft, The Netherlands
David Peck: Faculty of Architecture and Built Environment, Department Architectural Engineering and Technology, Critical Materials and Circular Built Environment, Delft University of Technology, 2628 BL Delft, The Netherlands
Dorota Kurowicka: Faculty of Electrical Engineering, Mathematics, and Computer Science, Department Applied Mathematics, Delft University of Technology, 2628 XE Delft, The Netherlands

Sustainability, 2019, vol. 11, issue 8, 1-20

Abstract: The availability of resources is crucial for the socio-economic stability of our society. For more than two decades, there was a debate on how to structure this issue within the context of life-Cycle assessment (LCA). The classical approach with LCA is to describe “scarcity” for future generations (100–1000 years) in terms of absolute depletion. The problem, however, is that the long-term availability is simply not known (within a factor of 100–1000). Outside the LCA community, the short-term supply risks (10–30 years) were predicted, resulting in the list of critical raw materials (CRM) of the European Union (EU), and the British risk list. The methodology used, however, cannot easily be transposed and applied into LCA calculations. This paper presents a new approach to the issue of short-term material supply shortages, based on subsequent sudden price jumps, which can lead to socio-economic instability. The basic approach is that each resource is characterized by its own specific supply chain with its specific price volatility. The eco-costs of material scarcity are derived from the so-called value at risk (VAR), a well-known statistical risk indicator in the financial world. This paper provides a list of indicators for 42 metals. An advantage of the system is that it is directly related to business risks, and is relatively easy to understand. A disadvantage is that “statistics of the past” might not be replicated in the future (e.g., when changing from structural oversupply to overdemand, or vice versa, which appeared an issue for two companion metals over the last 30 years). Further research is recommended to improve the statistics.

Keywords: eco-costs; value at risk; abiotic depletion potential (ADP); LCA; resource depletion; resource scarcity; CRM; critical raw materials; risk list (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
https://www.mdpi.com/2071-1050/11/8/2446/pdf (application/pdf)
https://www.mdpi.com/2071-1050/11/8/2446/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:11:y:2019:i:8:p:2446-:d:225881

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().