Monetizing social impacts for use in LCA

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Monetizing social impacts for use in LCA

• Bengt Steen
• Chalmers University of Technology, Environmental
  System Analysis and CPM, Centre for Environmental
  Assessment of Products and Material Systems

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Basic question

• Is it possible to monetize social impacts of
  products with the same credibility as for
  environmental issues? Is it meaningful?
• Is it true?
• Is it useful?

3
Content

• A framework
• Choice of indicators
• A long list of indicators
• Screening process to get a short list
• Three examples
• Conclusion

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A framework
5
Choice of indicators

• What to include
• How to make trade-offs
• How to handle uncertainty

6
Choice of indicators
Number of unique values rights in trade-offs
Strong sustainability
Very careful
Degree of precaution
Weak sustainability
Size of moral circle
Family, village
All living human beings
All generations animals, plants
Self
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A list of impact categories

• Health and social well-being
• Quality of the living environment (liveability)
• Economic impacts and material well-being
• Cultural impacts
• Family and community impacts
• Institutional, legal, political and equity
  impacts
• Gender relations

From van Schooten et al 2003
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Indicators for Health and social well-being

• Death of self or a family member
• Death in the community
• Nutrition
• Actual physical health and fertility
• Perceived health
• Mental health
• Aspirations
• Autonomy
• Stigmatisation or deviance labelling
• Feelings in relation to the project

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Quality of the living environment (liveability)

• Quality of the living environment (actual and
  perceived) (Similar issues that is treated in
  environmental impact assessments)
• Leisure and recreation opportunities and
  facilities
• Environmental amenity value/aesthetic quality
• Availability of housing facilities
• Physical quality of housing (actual and
  perceived)
• Social quality of housing (homeliness)
• Adequacy of physical infrastructure
• Adequacy and access to social infrastructure
• Personal safety and hazard exposure (actual and
  perceived)
• Crime and violence (actual and perceived)

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Economic impacts and material well-being

• Workload
• Standard of living
• Economic prosperity and resilience
• Income
• Property values
• Employment
• Replacement costs of environmental functions
  (that was formely provided by the environment,
  but now has to be paid for)
• Economic dependency
• Burden of national debt (including
  intergenerational debts)

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Cultural impacts

• Change in cultural values (moral rules, beliefs
  etc)
• Cultural affrontage (violation of sacred sites
  etc.)
• Cultural integrity
• Experience of being culturally marginalized
• Profanization of culture
• Loss of language or dialect
• Natural and cultural heritage (violation, damage
  or destruction of)

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Family and community impacts

• Alteration of family structure
• Obligations to living family members and
  ancestors
• Family violence
• Social networks
• Community identification and connection
• Community cohesion (actual and perceived)
• Social differentiation and inequity
• Social tension and violence

13
Institutional, legal, political and equity impacts

• Functioning of government agencies
• Integrity of government and government agencies
• Tenure or legal rights
• Subsidiarity (the principle that decisions should
  be taken as close to the people as possible
• Human rights
• Participation in decision making
• Access to legal procedures and legal advice
• Impact equity

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Gender relations

• Womens physical integrity
• Personal autonomy of women
• Gender division of production-oriented labour
• Gender division of household labour
• Gender division of reproductive labour
• Gender-based control over, and access to
  resources
• Political emancipation of women

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What to include in a short list

• Impact significance
• Relevance to products
• Known pathways
• Relevant for sustainable development, i.e.
• Need oriented
• Development oriented
• Resource oriented
• External costs and benefits

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Impact significance-important issues of today

• Health and social well-being
• Quality of the living environment (liveability)
• Economic impacts and material well-being
• Cultural impacts
• Family and community impacts
• Institutional, legal, political and equity
  impacts
• Gender relations

• Poverty
• Employment
• Crime
• Equity (gender etc)
• War

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Relevance to products

• Health and social well-being
• Quality of the living environment (liveability)
• Economic impacts and material well-being
• Cultural impacts
• Family and community impacts
• Institutional, legal, political and equity
  impacts
• Gender relations

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Known pathways

• Health and social well-being
• Quality of the living environment (liveability)
• Economic impacts and material well-being
• Cultural impacts
• Family and community impacts
• Institutional, legal, political and equity
  impacts
• Gender relations

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Relevant for sustainable development
Social
Environ-ment
Sustainable development
Economy
SD Increasing resilience

• For example by
• increasing capacity to peacefully resolve or
  transform conflicts
• Increasing the capacity to satisfy needs

• Wisdom (know what needs to be done)
• Skills (be able to do it)
• Empathy (be motivated to do it)

Key social sustainability values
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Relevant for sustainable development

• Health and social well-being
• Quality of the living environment (liveability)
• Economic impacts and material well-being
• Cultural impacts
• Family and community impacts
• Institutional, legal, political and equity
  impacts
• Gender relations
• Wisdom
• Skills
• Empathy

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Some problems in making a short list

• To include impacts that are many and small -
  Rings on water
• Allocation problems
• Uncertainty
• Trade-offs

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Short list for use of a Car

• Death in the community
• Actual physical health and fertility
• Availability of housing facilities
• Income
• Property values
• Employment

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Short list for the use phase of a fridge (exl.
Electricity production)

• Actual physical health and fertility
• Income
• Employment

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Short list for a video (movie)

• Mental health
• Aspirations
• Crime and violence
• Income
• Employment
• Change in cultural values
• Cultural integrity
• Profanization of culture

• Natural and cultural heritage
• Social networks
• Community identifi-cation and connection
• Community cohesion
• Social tension and violence
• Wisdom
• Skills

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Monetarisation options for use of a car

• Death in the community OK accident statistics
• Actual physical health and fertility, Health OK,
• Availability of housing facilities, OK, via
  hedonic price methods
• Income from use costs x (1-dymanic factor)
• Property values - OK, via hedonic price methods
• Employment workhours x employment value x
  dynamic factor

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Monetarisation options for the use phase of a
fridge

• Actual physical health and fertility. Data from
  health authorities values from WTP
• Income From use costs x(1- dynamic factor)
• Employment From workhours in supply chain
  employment value x dynamic factor

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Monetarisation options for a video (movie)

• Mental health - qualitatively
• Aspirations - qualitatively
• Crime and violence - qualitatively
• Income from costs x (1-dynamic factor)
• Employment from workhours employment value
• Change in cultural values - qualitatively
• Cultural integrity - qualitatively
• Profanization of culture - qualitatively
• Natural and cultural heritage - qualitatively
• Social networks - qualitatively
• Community identification and connection -
  qualitatively
• Community cohesion - qualitatively
• Social tension and violence - qualitatively
• Wisdom - qualitatively
• Skills - qualitatively

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Global accounting estimates

• Income from economic activity 100
• Loan from future generations environment 10-15
• Basic physical consumption 20-100
• Social consumption0 80

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Conclusions

• Social impacts have a significant monetary value
• For many social impacts it does not seem possible
  to estimate their monetary value with an accuracy
  that fulfil normal demands and leads to general
  acceptance
• Monetaristion of social impacts may be meaningful
  in engineering, but we need to develop the
  language to explain what is done
• There is a need to develop the sustainability
  feature further in social impact assessment