Green Net Value Added as a sustainability metric based on life cycle assessment: An application to Bounty® paper towel

Abstract

Sustainability measurement in economics includes assessment of environmental and economic effects in an integrated manner. In this study, system level economic data are integrated with environmental impacts determined from a life cycle assessment (LCA) of a common product. We adopt a costing methodology that captures conventional costs, but additionally incorporates externality costs to present a convenient, easily interpretable metric. Green Net Value Added (GNVA) is a type of full cost accounting that incorporates total revenue, the cost of production, depreciation, and environmental externalities. We present externality costs disaggregated by upstream sectors, full cost of production, and GNVA to evaluate the relative sustainability of Bounty® paper towels manufactured at two production facilities. We found that the longer running, more established line had a higher GNVA. The predominant components contributing to externality costs come from the stationary sources in the supply chain: electricity generation (27–35%), refineries (20–21%), pulp and paper making (15–23%). Health-related externalities from Particulate Matter (PM2.5) and Carbon Dioxide equivalent (CO2e) emissions are to a great extent driven by electricity usage and emissions by the facilities, followed by pulp processing and transport. Supply chains for other facility purchases, product distribution, and end-of-life management contribute the least to the environmental health-related costs.