Industry-Cost-Curve Approach for Modeling the Environmental Impact of Introducing New Technologies in Life Cycle Assessment

The environmental costs and benefits of introducing a new technology depend not only on the technology itself, but also on the responses of the market where substitution or displacement of competing technologies may occur. An internationally accepted method taking both technological and market-mediated effects into account, however, is still lacking in life cycle assessment (LCA). For the introduction of a new technology, we here present a new approach for modeling the environmental impacts within the framework of LCA. Our approach is motivated by consequential life cycle assessment (CLCA) and aims to contribute to the discussion on how to operationalize consequential thinking in LCA practice. In our approach, we focus on new technologies producing homogeneous products such as chemicals or raw materials. We employ the industry cost-curve (ICC) for modeling market-mediated effects. Thereby, we can determine substitution effects at a level of granularity sufficient to distinguish between competing technologies. In our approach, a new technology alters the ICC potentially replacing the highest-cost producer(s). The technologies that remain competitive after the new technology's introduction determine the new environmental impact profile of the product. We apply our approach in a case study on a new technology for chlor-alkali electrolysis to be introduced in Germany.