2.2. Monetized LCA and Social CBA
To assess the costs and benefits of a more natural alternative compared to the costs and benefits of a chemical alternative, a holistic assessment of the case has to be performed. The risk assessment and investment analysis, described in the exploratory and descriptive soil investigation reports did not include a full analysis of the different alternatives from a societal point of view but did provide the majority of data necessary to perform a more detailed assessment of the costs and benefits of the case study.
The method used in this paper is based on the research method developed in Huysegoms et al. [13
], combining monetized LCA with CBA to allow for a more holistic analysis of the remediation alternatives. A Life Cycle Assessment (LCA) allows to quantify and analyze the environmental impact of the remediation works in both alternatives. An LCA consists of four key steps. The first step is the definition of the goal and scope of the study to clearly mark the boundaries of the life cycle and to set a functional unit. Secondly, based on the goal of the study, a Life Cycle Inventory (LCI) can be made through the collection of all data needed, relying on databases (for example, Ecoinvent), literature and project information. In the third step, the different impacts of the life cycle can be calculated based on a chosen impact assessment method. In the last part, the calculated environmental impact is interpreted and communicated and can be used in, for example, decision making processes [13
By defining all the different steps within the life cycle of the remediation project, and by determining the inputs and outputs linked to each of the steps in the life cycle, it is possible to set the scope of the LCA and define the functional unit. Based on the information found in the exploratory and descriptive soil investigation reports [15
] and in the literature on soil remediation techniques [17
] a Life Cycle Inventory (LCI) was made. This LCI contains the inputs and outputs of each step of the remediation (Table 1
). Based on the data, the environmental impact can be calculated and displayed either as an aggregated result (endpoint indicators) or as a series of midpoint indicators (for example global warming, particular matter, water use, etc.). The combination of both types of indicators allows for an in-depth comparison of the environmental impact of two remediation alternatives. For this case study the mid- and endpoint indicators were calculated with the use of the ReCiPe method, an impact assessment method developed by the Dutch National Institute for Public Health and the Environment. With this method, the life cycle inventory results are transformed into a limited number of indicator scores, expressing the relative severity of an environmental impact category [18
Additional to the LCA, a Cost-Benefit Analysis (CBA) was drawn up to analyze the social profitability of the chemical and natural remediation alternative. In the present paper we performed a full social CBA of a site remediation, which includes all impacts to society, the direct and indirect financial costs and benefits as well as the health and environmental benefits and other relevant impacts. In the literature there is ambiguity about the terminology and definitions with respect to a CBA, which can be a private CBA or a social CBA [13
]. A CBA can either be a private CBA based on the viewpoint of one particular stakeholder (e.g., a firm, a homeowner or a local community) or a social CBA based on the viewpoint of society as a whole (i.e., all affected stakeholders) [13
]. A private CBA thus takes into account all the costs and benefits of a particular stakeholder—also known as a private agent—associated with the project [13
]. In our assessment we aim to take into account all impacts for society as a whole and thus perform a social CBA [13
]. This social CBA includes the estimated private costs, the health benefits of the remediation, as well as any externalities caused by the remediation activities, including the environmental impact of the remediation [13
]. The inclusion of the environmental impact in the CBA is based on the LCA results, using a monetization technique to translate the environmental impact into a monetary value.
For this case study two different monetization techniques, Stepwise 2006 [19
] and Ecovalue 2008 [21
], were applied to the results of the LCA. These two techniques use assumptions and conversion ratios, for the translation of the environmental impact calculated in an LCA of the remediation alternative into a monetary value so that it can be introduced in the social CBA. These two techniques were initially chosen because they use European data for the monetization of the environmental impacts [13
]. After performing the calculations, only the results monetized with Stepwise 2006 were included in the social CBA, because Stepwise 2006, in comparison to Ecovalue 2008, does allow for the monetization of several important impact categories, for example aquatic and terrestrial ecotoxicity, that are not included in Ecovalue 2008 [13
]. Stepwise 2006 allows for the inclusion of 17 different environmental impact categories divided over three overall safeguard subjects (biodiversity, human well-being and resource productivity). The Life Cycle Inventory Analysis (LCIA) uses a combination of the IMPACT 2002+ and EDIP2003 method for the initial calculations [19
]. Afterwards these impacts are converged and aggregated into the final impacts, which can either be expressed in QALY’s (Quality Adjusted Life Years), in BAHY’s (Biodiversity Adjusted Hectare Years) or in euros [19
Based on the previously described data used in the social CBA, it was possible to assess the societal added value of each of the remediation alternatives by the calculation of its Net Present Value (see [13
] for a more detailed explanation). The calculation of a Net Present Value (NPV) allows to aggregate present and future costs and benefits with the use of a chosen discount rate. In this paper, an initial social discount rate of 3% and a timeline of 30 years was chosen based on the recommendations made by different governmental institutions, including, for example, the European Commission and the World Health Organization, for CBA calculations for environmental projects [22
]. This social discount rate is also used in the calculation of the environmental impact when using the ReCiPe method [23
]. If the NPV of a certain project is positive, this project increases welfare. To assess the robustness of the results of the social CBA, a sensitivity analysis was performed by varying the values of several key elements (the discount rate, the private costs, the timeline for the health benefits, the non-use benefits of groundwater and biogenic carbon) while keeping all else constant. In addition, the effect of the use of substitutes for important substances (hydrogen peroxide and molasses) within some of the used remediation techniques on the NPV was analyzed.