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Back to EPS default 2000

Weighting Method
Name:
EPS
Version:
2000
Principal MethodName:
Monetarization (WTP)
Method Description:
The term 'weighting' came to substitute the term 'valuation' during the development of
ISO 14042. A major reason for that was to find a broader consensus in a term that did not emphasise the subjective element in this LCA step. There are many methods that allow
comparison across impact categories, where the subjective element is limited to the
choice of the weighting principle, like for instance the MIPS-measure (Schmidt-Bleek,
1994) where the total mass flow is used as an overall measure.

However in the EPS default method, the weighting is still made through valuation.
The term 'weighting' came to substitute the term
'valuation' during the development of ISO 14042. A major reason for that was to find a broader consensus in a term that did not emphasise the subjective element in this LCA step. There are many methods that
allow comparison across impact categories, where the subjective element is
limited to the choice of the weighting principle, like for instance the
MIPS-measure (Schmidt-Bleek, 1994) where the total mass flow is used
as an overall measure.

However in the EPS default method, the
weighting is still made through valuation.

Although not explicitly expressed
in ISO 14042, weighting requires definition of weighting indicators and weighting factors in a similar way as for characterisation
of emissions. For the EPS default method there is only one weighting indicator,
as only one value for the total environmental impact is requested.

1 Definition of default weighting indicator

The default-weighting indicator, which is preferred, is the willingness to pay (WTP) to restore impacts on the safeguard subjects, as measured amongst today's OECD
inhabitants. The choice of today's OECD inhabitants is made in order to
facilitate the understanding by the designer, who most likely is an OECD
inhabitant or a person outside OECD with good contact with the OECD
world. Today the OECD countries have a dominating role in the development
of new technique and are beginning to adopt the ideas of sustainable
development. Of course there are many other cultures that can claim to be
more sustainable than those of the modern OECD countries, but their
limited use of tools like LCA makes it more reasonable to investigate the
consequences of their attitudes as options and not as a default.

The choice of default reference state is the environment of today. The
reasons are similar as for the choice of WTP. There is a need for an
understanding of what the reference state look like. Today's situation is
real to us and can easier be communicated than a hypothetical state like
'the untouched nature’.

2 Methods to determine default weighting
factors.

Weighting factors are the ratio of weighting indicators and impact category indicators.

They represent the WTP for one indicator
unit. They are separately modelled and a set of models (factors) is used
'ready-made' by the LCA practitioner.

WTP for category indicator units may be estimated by various methods. Various methods tend to give different results. However this is not a serious problem, and may be
addressed in the same way as measuring emissions. The uncertainty is
estimated and expressed as a distribution function. For some category
indicators, the market price may be used to estimate WTP. It may be disputed
whether the marked price is what is paid or if various subsidiaries and
taxes should be included. For instance, what WTP should be used for
crop? Is the world market price that is paid directly better to use than
the price the society pays, which mainly is the sum of the buyers costs
and the cost for subsidiaries. If we accept to add the cost of subsidiaries we also have to accept the subtraction of taxes if we want to be consequent. However, the goal that was set up for the EPS system requires the result to be understandable for the designer. This speaks for a choice of a monetary value that is familiar to the designer: the price
the buyer has to pay. When studying the market prices you find great variations, partly because there are differences between different regions but also because the category indicators are not sharply defined.
Crops includes all sorts of crops, like oat, wheat, barley, rice and corn, and their prices vary on the market. These variations are included in the uncertainty measure of the weighting factor.
If there is no direct market, where the indicator value may be found, there are several other methods used for finding the WTP. Some involves studies of
behaviour, like the hedonic pricing method, where estate prices are used or
like studies of travelling. Both use the extra costs taken to reach a better environment as a measure of the WTP.

A method often used to estimate non-market environmental values is the CVM method.
CVM stands for 'Contingent Valuation Method' and is widely used to measure WTP in
various groups to various concepts, which are described to them. The CVM technique is based on interviews and is following a special procedure. In the EPS-system the CVM technique is used for category indicators of morbidity and nuisance and for recreation values. The precision of the CVM technique varies.
When trying to find the WTP for indicators of
the safe guard subject ‘abiotic stock resources', we find that neither
the market nor the customers are available to study. You cannot use the CVM technique to determine the WTP for those that are concerned, because most of them belong to future generations. There is no one to ask. To
cope with this in the EPS default method, a market scenario was created, where the production cost of substances similar to the abiotic stock resources is used as an estimate of WTP. It is assumed that some of
these stock resource materials always will be produced even if the volumes
decrease. Consequently there is a will to pay at least it takes, but probably, in the long run, not much more
Literature Reference:
1. Steen B (1999): A systematic approach to environmental priority strategies in product development (EPS). Version 2000 – General system characteristics CPM report Chalmers University of Technology Sweden

2. Steen B (1999): A systematic approach to environmental priority strategies in product development (EPS). Version 2000 – Models and data of the default method CPM report Chalmers University of Technology Sweden

Methodological Range:
Geographical range is OECD countries
Time range is 1990~2000
Notes:
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Weighting Factors
Category Indicator name Quantity Unit Note
Ag reserves (EPS/2000) 54000 ELU/kg
Al reserves (EPS/2000) 0.439 ELU/kg
Ar reserves (EPS/2000) 0 ELU/kg
As reserves (EPS/2000) 1490 ELU/kg
Au reserves (EPS/2000) 1190000 ELU/kg
B reserves (EPS/2000) 0.05 ELU/kg
Ba reserves (EPS/2000) 4.45 ELU/kg
Base cat-ion capacity (EPS/2000) 0.01 ELU/H+ mole equivalence
Be reserves (EPS/2000) 958 ELU/kg
Bi reserves (EPS/2000) 24100 ELU/kg
Br reserves (EPS/2000) 0 ELU/kg
Cd reserves (EPS/2000) 29100 ELU/kg
Ce reserves (EPS/2000) 45.20 ELU/kg
Cl reserves (EPS/2000) 0 ELU/kg
Co reserves (EPS/2000) 256 ELU/kg
Cr reserves (EPS/2000) 84.90 ELU/kg
Cradle to gate GHG index (EPS/2000) 1 ELU/kg
Crop (EPS/2000) 0.15 ELU/kg
Cs reserves (EPS/2000) 512 ELU/kg
Cu reserves (EPS/2000) 208 ELU/kg
Drinking water (EPS/2000) 0.03 ELU/kg
Dy reserves (EPS/2000) 1020 ELU/kg
Er reserves (EPS/2000) 1410 ELU/kg
Eu reserves (EPS/2000) 3130 ELU/kg
F reserves (EPS/2000) 4.860 ELU/kg
Fe reserves (EPS/2000) 0.961 ELU/kg
fish&meat (EPS/2000) 1 ELU/kg
Fossil coal (EPS/2000) 0.0498 ELU/kg
Fossil oil (EPS/2000) 0.506 ELU/kg
Ga reserves (EPS/2000) 212 ELU/kg
Gd reserves (EPS/2000) 1060 ELU/kg
Ge reserves (EPS/2000) 2120 ELU/kg
H reserves (EPS/2000) 0 ELU/kg
He reserves (EPS/2000) 0 ELU/kg
Hf reserves (EPS/2000) 512 ELU/kg
Hg reserves (EPS/2000) 53000 ELU/kg
Ho reserves (EPS/2000) 4790 ELU/kg
I reserves (EPS/2000) 0 ELU/kg
In reserves (EPS/2000) 48700 ELU/kg
Ir reserves (EPS/2000) 59400000 ELU/kg
Irrigation water (EPS/2000) 0.003 ELU/kg
K reserves (EPS/2000) 0.01 ELU/kg
La reserves (EPS/2000) 92.0 ELU/kg
Li reserves (EPS/2000) 0.1 ELU/kg
Lu reserves (EPS/2000) 11000 ELU/kg
Mg reserves (EPS/2000) 0 ELU/kg
Mn reserves (EPS/2000) 5.64 ELU/kg
Mo reserves (EPS/2000) 2120 ELU/kg
Morbidity (EPS/2000) 10000 ELU/p yr
N reserves (EPS/2000) 0 ELU/kg
Na reserves (EPS/2000) 0 ELU/kg
Natural gas (EPS/2000) 1.10 ELU/kg
Nb reserves (EPS/2000) 114 ELU/kg
Nd reserves (EPS/2000) 115 ELU/kg
Ne reserves (EPS/2000) 0 ELU/kg
NEX (EPS/2000) 1.10E+11 ELU/NEX
Ni reserves (EPS/2000) 160 ELU/kg
Nuisance (EPS/2000) 100 ELU/p yr
O reserves (EPS/2000) 0 ELU/kg
Os reserves (EPS/2000) 59400000 ELU/kg
P reserves (EPS/2000) 4.47 ELU/kg
Pb reserves (EPS/2000) 175 ELU/kg
Pd reserves (EPS/2000) 7430000 ELU/kg
Pr reserves (EPS/2000) 471 ELU/kg
Pt reserves (EPS/2000) 7430000 ELU/kg
Rb reserves (EPS/2000) 27 ELU/kg
Re reserves (EPS/2000) 7430000 ELU/kg
Rh reserves (EPS/2000) 49500000 ELU/kg
Ru reserves (EPS/2000) 29700000 ELU/kg
S reserves (EPS/2000) 0.1 ELU/kg
Sb reserves (EPS/2000) 9580 ELU/kg
Sc reserves (EPS/2000) 424 ELU/kg
Se reserves (EPS/2000) 35800 ELU/kg
Severe morbidity (EPS/2000) 100000 ELU/p yr
Severe nuisance (EPS/2000) 10000 ELU/p yr
Sm reserves (EPS/2000) 632 ELU/kg
Sn reserves (EPS/2000) 11900 ELU/kg
Sr reserves (EPS/2000) 9.40 ELU/kg
Ta reserves (EPS/2000) 1980 ELU/kg
Tb reserves (EPS/2000) 5940 ELU/kg
Te reserves (EPS/2000) 594000 ELU/kg
Th reserves (EPS/2000) 288 ELU/kg
Ti reserves (EPS/2000) 0.953 ELU/kg
Tl reserves (EPS/2000) 3960 ELU/kg
Tm reserves (EPS/2000) 9900 ELU/kg
U reserves (EPS/2000) 1190 ELU/kg
V reserves (EPS/2000) 56 ELU/kg
W reserves (EPS/2000) 2120 ELU/kg
Wood (EPS/2000) 0.04 ELU/kg
Y reserves (EPS/2000) 143 ELU/kg
Yb reserves (EPS/2000) 1980 ELU/kg
YOLL (EPS/2000) 85000 ELU/p yr
Zn reserves (EPS/2000) 57.10 ELU/kg
Zr reserves (EPS/2000) 12.50 ELU/kg