What is Consequential LCA?

Consequential LCA estimates the environmental consequences of decisions. Instead of asking “what impacts does this product have”, it asks “what changes if we make or don’t make this product”.

This approach models how markets respond to changes. If you increase biofuel production, consequential LCA considers what happens to displaced petroleum, changed agricultural land use, and affected commodity markets. The analysis extends beyond direct product impacts to system-level effects.

The Change-Oriented Perspective#

Attributional LCA describes current conditions. Consequential LCA predicts future conditions under different scenarios. The distinction matters when decisions trigger market responses.

Consider increased demand for recycled aluminium. Attributional LCA reports the impacts of recycling processes. Consequential LCA asks: where does additional recycled aluminium come from? Does it displace virgin production? Does it reduce landfilled scrap? The answers determine actual environmental consequences.

Marginal Suppliers#

Consequential LCA uses marginal data rather than average data. The marginal supplier is whoever responds to demand changes, not the average market composition.

Electricity grids demonstrate this. Average UK electricity has a certain carbon intensity mixing nuclear, wind, gas, and coal. But the marginal supplier – the plant that increases output when demand rises – might be a gas turbine. Consequential LCA uses marginal carbon intensity, which differs from average values.

Identifying marginal suppliers requires market analysis. Which producers have spare capacity? Which technologies can expand? Which sources respond to price signals? These economic questions determine marginal data selection.

System Expansion#

Consequential LCA expands system boundaries to include affected processes. If your product displaces another product, you credit the avoided impacts.

Agricultural systems illustrate this. Cattle production yields meat and leather. Leather might displace synthetic alternatives in footwear. Consequential LCA subtracts avoided synthetic production impacts from the cattle system total.

System expansion requires understanding market substitution. What actually gets displaced? Perfect substitution is rare. Leather and synthetic materials serve overlapping but distinct markets. The expansion needs realistic market modelling.

When to Use Consequential LCA#

Consequential methods suit certain decision contexts:

Policy assessment evaluates large-scale interventions. A biofuel mandate affects petroleum markets, agricultural production, and land use. Consequential LCA models these systemic changes rather than just measuring biofuel production impacts.

Strategic decisions about new technologies or major investments benefit from consequential approaches. Building renewable capacity displaces fossil generation. The consequential question is: which fossil plants get displaced?

Product development decisions with market implications need consequential thinking. A new recycled material competes with virgin and recycled alternatives. Market shares determine what gets displaced and therefore what environmental consequences follow.

Allocation Avoided#

Consequential LCA avoids allocation where attributional LCA requires it. Multifunctional processes get handled through system expansion.

A combined heat and power plant produces electricity and heat. Rather than allocating emissions across outputs, consequential LCA asks: what would provide this electricity and heat separately? Subtract those alternatives’ impacts to find the cogeneration system’s consequence.

This eliminates arbitrary allocation rules. The approach models what actually happens in markets rather than dividing impacts by mass or economic value ratios.

Market Mechanisms#

Consequential LCA incorporates market responses. Increased demand raises prices. Higher prices incentivise production expansion. New capacity comes online. These dynamics determine environmental consequences.

Constrained markets behave differently from unconstrained markets. EU electricity operates under emission caps. Increased demand doesn’t increase total emissions – it redistributes them. Consequential LCA accounts for these policy constraints.

Substitution patterns matter. Perfect substitutes create clear displacement. Imperfect substitutes trigger more complex market adjustments. Understanding actual market behaviour determines whether consequential modelling adds value.

Temporal Considerations#

Consequences unfold over time. Short-term market responses differ from long-term adjustments. Existing capacity absorbs initial demand changes. New investment responds to sustained changes.

Time horizons affect consequential results. A marginal technology today might differ from the marginal technology in five years. Grid decarbonisation changes which generators respond to demand variations.

Consequential LCA typically models medium to long-term consequences. Short-term variations might be absorbed by existing capacity with minimal environmental change.

Uncertainty and Complexity#

Consequential LCA requires more assumptions than attributional approaches. You need market models, price elasticities, and substitution patterns. Each assumption introduces uncertainty.

Data availability limits consequential studies. Marginal production data is scarcer than average data. Market models require economic analysis beyond typical LCA expertise.

Results sensitivity to assumptions needs testing. Small modelling changes can substantially alter conclusions. Robust findings survive assumption variations. Sensitive results require careful interpretation.

Limitations#

Consequential LCA can’t perfectly predict market responses. Markets involve multiple actors making independent decisions. Price signals, policy changes, and technology developments create complex dynamics.

The approach works best for clear substitution relationships. Electricity generation from different sources involves direct competition. Complex consumer goods with brand loyalty and non-environmental factors create murkier substitution patterns.

Large-scale changes might not scale linearly. A small project uses marginal data. A massive intervention restructures markets. Consequential LCA struggles with very large perturbations.

Comparison with Attributional LCA#

These approaches answer different questions:

• Attributional: “What’s the environmental footprint?”
• Consequential: “What happens if we change something?”

Neither is universally superior. Attributional provides consistent accounting. Consequential provides decision-relevant analysis. Your question determines which approach fits.

Standards and regulations typically specify attributional methods. EPDs use attributional LCA. Carbon accounting follows attributional conventions. These frameworks prioritise consistency over causal modelling.

Implementation Requirements#

Consequential LCA needs:

• Market analysis identifying marginal suppliers
• Understanding of substitution patterns
• System expansion instead of allocation
• Long-term perspective on market development
• Sensitivity analysis for key assumptions

Software implementation requires custom modelling. Standard databases provide average data. Consequential analysis needs marginal data from market research and economic analysis.

The methodology produces insights about change consequences rather than reproducible accounting. Different analysts might reach different conclusions based on their market understanding.