Leveraging Life Cycle Assessment to Better Promote the Circular Economy: A First Step Using the Concept of Opportunity Cost

Esra Aleisa and Reinout Heijungs
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Esra Aleisa: Industrial and Management Systems Engineering, Kuwait University, Safat 13060, Kuwait
Reinout Heijungs: Department of Operations Analytics, Vrije University Amsterdam, 1081 HV Amsterdam, The Netherlands

Sustainability, 2022, vol. 14, issue 6, 1-17

Abstract: In economics, opportunity cost is defined as the benefit foregone by choosing another course of action. Considering opportunity costs enables the improved handling of trade-offs to better support strategic decision-making. We introduce the concept of opportunity cost into life cycle assessment (LCA). In our framework, opportunity cost extends the system expansion paradigm to support better alignment with a circular economy (CE). Opportunity cost thinking is considered to be most useful for the efficient allocation of scarce economic capital for the creation of economic value. In the environmental domain, we use such thinking to account for the implications of ‘wasting waste’. In this paper, we consider a case of treated wastewater sludge being used as a source of nutrients as a vehicle to study the points at which LCA can support a CE. Our conclusions, however, have wider repercussions because there are many more situations in which product systems are analytically demarcated from the web of connections in which they are embedded.

Keywords: life cycle assessment (LCA); circular economy (CE); system expansion; functional unit; wastewater; sewage sludge; recycling (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
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