Purpose Case studies on life cycle assessments frequently admit that the precision of their outcome could be undermined due to temporal issues, though they usually refrain from offering much more detail. In addition, available overview papers and reviews on problems and challenges in LCA do not address the whole range of temporal issues. As those are major sources of inaccuracies and influence each other, it is important to get a clear picture of them, to close gaps in definitions, to systemize temporal issues, and to show their interdependencies and proposed solutions. In order to identify the state of science on those questions, we conducted a systematic literature review. Methods We first systematized temporal issues based on ISO 14040ff and divided them into six types: time horizon, discounting, temporal resolution of the inventory, time-dependent characterization, dynamic weighting, and time-dependent normalization. Building on that, we identified suitable search terms and developed an analysis grid for the content analysis. We included only methodological papers and case studies with original findings on solutions for temporal issues. Bibliographic data, impact types, industrial fields, and methodological contributions were analyzed. Results and discussion Literature differentiates between different types of time horizons. There is one for the whole assessment, defined in goal and scope, one for the life cycle inventory, and one for the impact characterization. Setting a time horizon for the assessment is regarded as equivalent to the application of discounting. Both very long and very short time horizons of the assessment are not practical depending on the topic assessed in the LCA. Very short ones would offend the principle of intergenerational equality, while very long ones would marginalize short-term actions and thereby reduce incentives to act. There is consensus in the literature that temporally differentiated life cycle inventories and time-dependent, or at least time horizon dependent, characterization improve the accuracy of LCA. Generally, dynamic life cycle assessments are attractive for companies because the calculation results are not only more accurate but are often also lower than in static life cycle assessments. Conclusion The main questions where we did not find consensus are the issue of the length of the time horizon of the assessment and the issue of discounting. Those are regarded as subjective and are encountered with sensitivity or scenario analysis. Further investigations should be taken for a better understanding of this issue and for concrete solutions because their influence on the results of life cycle assessments is often fundamental.
Although the weighting of environmental impacts against each other is well established in life cycle assessment practice, the weighting of impacts occurring at different points in time is still controversial. This temporal weighting is also known as discounting, which due to its potential to offend principles of intergenerational equity, is often rejected or regarded as unethical. In our literature review, we found multiple disputes regarding the comprehension of discounting. We structured those controversial issues and compared them to the original discounted utility model on which discounting is based. We explain the original theory as an intertemporal decision instrument based on future utility. We conclude that intertemporal equity controversies can be solved if discounting is applied as an individual decision instrument, rather than as an information instrument, which could underestimate environmental damages handed to future generations. Each choice related to discounting—including whether or not to discount, or to discount at a rate of zero—should be well-founded. We illustrate environmental decision-related problems as a multidimensional issue, with at least three dimensions including the type of impact and spatial and temporal distributions. Through discounting framed as a decision instrument, these dimensions can be condensed into an explicit result, from which we can draw analogies to both weighting in life cycle assessment and financial decision instruments. We suggest avoiding discounting in environmental information instruments, such as single-product life cycle assessments, footprints, or labels. However, if alternatives have to be compared, discounting should be applied to support intertemporal decisions and generate meaningful results.
Decisions on measures reducing environmental damage or improving environmental impact are usually constrained by financial limitations. Eco-efficiency analysis has emerged as a practical decision support tool by integrating environmental and economic performance. Environmental impact, as well as economic revenues and expenses, are usually distributed over a certain time scale. The temporal distribution of economic data is frequently assessed by discounting while discounting of environmental impact is rather uncommon. The scope of this paper is to reveal if this assumed inconsistency is common in eco-efficiency assessment literature, what reasons and interrelations with indicators exist and what solutions are proposed. Therefore, a systematic literature review is conducted and 35 publications are assessed. Theoretical eco-efficiency definitions and applied eco-efficiency indicators, as well as applied environmental and economic assessment methods, are compared here, but it is revealed that none of the empirical literature findings applied or discussed environmental discounting. It was, however, found in methodical literature. It is concluded that the theoretical foundation for the application of discounting on environmental impact is still insufficient and that even the theoretical foundation of economic discounting in studies is often poor. Further research and, eventually, a practical framework for environmental discounting would be beneficial for better-founded, more “eco-efficient” decisions. Graphical Abstract
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