Using LCA-based Decomposition Analysis to Study the Multidimensional Contribution of Technological Innovation to Environmental Pressures

This article presents a general framework for macroenvironmental assessment, combining life cycle assessment (LCA) with the IPAT equation, and explores its combination with decomposition analysis to assess the multidimensional contribution of technological innovation to environmental pressures. This approach is illustrated with a case study in which carbon dioxide (CO2) and nitrogen oxides (NOx) air emissions from diesel passenger cars in Europe during the period 1990-2005 are first decomposed using index decomposition analysis into technology, consumption activity, and population growth effects. By a second decomposition, the contribution of a specific innovation (diesel engine) is calculated on the basis of the technology and consumption activity effects, through a technological comparison with a relevant alternative and the calculation of the rebound effect, respectively. The empirical analysis for diesel passenger cars highlights the discrepancies between the micro (LCA) and macro (IPAT-LCA) analytical approaches. Thus, whereas diesel engines present a relatively less-pollutant environmental product profile than their gasoline counterparts, total CO2 and NOx emissions would have increased partly as a consequence of their introduction, mainly driven by the increase in travel demand caused by the induced direct price rebound effect from fuel savings and fuel price differences. The counterintuitive result shows the need for such an analysis.