The Environmental Priority System (EPS)

The EPS characterizes and assesses the environmental damage caused by equivalency potentials and expresses it in monetary terms, derived from environmental economics. The EPS is a valuation method that builds on the guidelines for LCA as laid out by SETAC. EPS requires the actual determination of damage in the characterization step and assigns a monetary value to that damage, based on methods of environmental economics. 

EPS defines five ‘safeguard subjects’, human health, biological diversity, ‘production’ (e.g. fertility), resources, and aesthetic values. In the characterization step of LCA, the impact on each of these ‘safeguard subjects’ is determined and quantified. Based on actual expenditures taken by society to avoid damage or on contingent valuation (‘willingness to pay’ to avoid negative effects).

Some authors have calculated the monetary value of the safeguard subjects. An excess death is equal to one million ‘environmental load units’ (1 ELU = 1 European Currency Unit (ECU)), a moderate nuisance equals 100 ELU per person-year. For the loss of production of natural resources, actual commodity prices are used. A medium size animal or plant species is valued at IO” ELU. The authors also suggest use of a multiplicative uncertainty factor, e.g. 5 for human mortality and IO for species extinction. 

EPS is even ‘deeper’ than the LCA discussed in SETAC-LCA, because it requires a quantification of damage. It is an explicit valuation method but it relieves the analyst or decision maker of the burden of assigning values or relative weights and instead tries to ‘scientifically’ measure prices and social preferences that exist independent of the process of analysis. No justification is given why a valuation based on environmental economics is superior to a social choice based on extensive discussion and group decision-making. The valuation is based on a generic assessment and not on local conditions, but local susceptibilities arc taken into account by using actual and not potential damage.

EPS has been used, e.g. to evaluate the environmental impact of different materials for an automobile front end. The production of the steel costs about 9 ELUs, the manufacturing about 1 ELU but the weight of the part costs an additional gas consumption of 48 kg resulting in 40 ELUs. By comparison, the use of a GMT composite is environmentally preferable: 2 ELUs are needed for the production and 24 ELUs result from the gas consumption. 

Another study criticize EPS as difficult to implement and for using ‘costs’ instead of worth, thereby neglecting that environmental absorption capacity and resources become more valuable as they become scarce. The study asserts that the reduction of unit effects to monetary values implies a linear, additive preference structure and that this is a poor representation of actual preferences displayed by humans. Some other authors demand a consensus on the value of avoiding environmental degradation.