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

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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
    Institute of Environmental Sciences, Leiden University, 2311 EZ Leiden, The Netherlands)

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.

Suggested Citation

  • Esra Aleisa & Reinout Heijungs, 2022. "Leveraging Life Cycle Assessment to Better Promote the Circular Economy: A First Step Using the Concept of Opportunity Cost," Sustainability, MDPI, vol. 14(6), pages 1-17, March.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:6:p:3451-:d:771849
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    References listed on IDEAS

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    1. Kirchherr, Julian & Reike, Denise & Hekkert, Marko, 2017. "Conceptualizing the circular economy: An analysis of 114 definitions," Resources, Conservation & Recycling, Elsevier, vol. 127(C), pages 221-232.
    2. Sabrina Neugebauer & Silvia Forin & Matthias Finkbeiner, 2016. "From Life Cycle Costing to Economic Life Cycle Assessment—Introducing an Economic Impact Pathway," Sustainability, MDPI, vol. 8(5), pages 1-23, April.
    3. Rizal Taufiq Fauzi & Patrick Lavoie & Luca Sorelli & Mohammad Davoud Heidari & Ben Amor, 2019. "Exploring the Current Challenges and Opportunities of Life Cycle Sustainability Assessment," Sustainability, MDPI, vol. 11(3), pages 1-17, January.
    4. Tomas Ekvall, 2020. "Attributional and Consequential Life Cycle Assessment," Chapters, in: Maria Jose Bastante-Ceca & Jose Luis Fuentes-Bargues & Levente Hufnagel & Florin-Constantin Mihai & (ed.), Sustainability Assessment at the 21st century, IntechOpen.
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