DOI: http://dx.doi.org/10.1065/lca2000.10.035 --- The Return on Environment (ROE) is developed, and
tested, as an objective indicator to support the results of Life Cycle
Assessments. It is based on the observation that a ratio of life
cycle costs incurred throughout the extraction, transport, manu-facturing,
use and disposal stages, to the selling price, appears to
scale linearly with a quantitative impact assessment. ROE is there-fore
a normalization method which permits comparison of new
assessments with existing data, even from products with quite
different characteristics. It can, alternatively, be applied to esti-mate
either the life cycle cost, or quantify environmental impact,
provided the other is known. Like its economic cousin, the return
on investment, cases studied typically have ROEs in over the range
of 2-20%. ROE is intended as a preliminary estimation method,
akin to engineering costing, which has a precision of ±30%. As
such, it can be used to rapidly determine if a more detailed cost
assessment can be justified and, if so, where the efforts should be
oriented. ROE is a measurable life cycle index intended to render
LCAs more suitable for decision making. A further benefit that
ROE provides is the guidance to a life cycle practitioner, or prod-uct
development team, to assess if sufficient data has been col-lected,
or if costs and impacts have been over or under-estimated.
It has advantages over specific ecoindicators, such as manufac-turing
energy or waste emissions, which are both product specific
and subjective. The Return on Environment also serves as a sys-tematic
index for reporting improvements or as a relative envi-ronmental
rating.
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