MK.

Sustainable Supply Chain

Arinda Soraya Putri
S801608003

Video Title : Driving Sustainable Consumption through Environmental Accounting of

Retail Goods and services
Duration : 00:55:08
By : Arpad Horvath, Director Consortium on Green Design and Manufacturing,
University of California, Berkeley

Consortium on Green Design and Manufacturing

 Multidisciplinary campus group integrating engineering, policy, public health, adn business
in green engineering, management, and pollution prevention.
 Strategic areas: civil infrastructure systems, electronics industry, servicizing products
 9 fakulty from Civil and Evironmental Engineering, Mechanical Engineering, Haas School
of Business, Enegry and Resources Group, School of Public Health.
 10 current Ph.D students
 28 alumni
 Since 1993, http://cgdm.berkeley.edu

Outline
 Carbon footprint research
 The role of the customer
 How we are contributing to environmental assessment research (focused on industries, on
the producers, focusing on the consumer in consumer behavior and consumer actions) at
UC Berkeley
o Detailed life-cycle inventory studies
o LEAPS model
o Upcoming project for the California Air Resources Board
 Research challenge

The Times We Live In...

 AB 32 Global warming Solution
o By 2020, return GHG emissions to 1990 levels (and boost annual GSP $60B and creat
17,000 jobs)
o By 20150, drop 80% below 1990 levels
 Implementation of AB 32
o What is my carbon footprint?
 Increasing consumption
 Increasing population

The Market for Carbon-Neutral Products

Role of the Customer
 Up to 80% of the annual greenhouse gas (GHG) “footprint” of the average U.S. customer
is attributable to the purchase, use, and disposal of retail products (Matthew, 1999,
Carnegio Mellon U.)
o Consumer is guessing, at best
o SUV vs compact car
o Incandescent vs compact flourescent
 But paper vs plastic cups? Bag?
 Someone is picking “the right answer” for customer
o E.g. “green” electricity
The Problem We Are Addressing
 Consumers lack
o Understanding of the environmental footprint of their consumption
o Options to mitigate this impact
 Industry lack
o Appropriate signals from customers to reduce environmental impacts
Economic Input-Output Analysis
 Developed by Wassily Leontief (Nobel Prize in 1973)
 “General interdependency” model: quantifies the interrelationship among sectors of an
economics system
 Identifies the direct and indirect economic inputs
 Can be extended to environmental and energy analysis

Detailed Studies We are Conducting

 Passanger transportation (car and light-duty truck, light and heavy rail, air, bus)
 Green logistics
 Data centers
 Semiconductor manufacturing
Completed:
 Freight transportation (truck, rail, air)
 Office buildings
 Water provision
 Selection of plastic for and end-of-life options for computers
 Electricity generaton
 Pavements

The LEAPS Model (Lifecycle Environment Assessment of Products and Services)

The LEAPS Approach
Carbon footprint of 1,100 categores of goods, food, and services (anything anyone can buy!)
Drive sustainable consumption:
 Improving customer decision-making
 Carbon-neutral shopping-point of sale, online, affiliate cards
Drive sustainable production:
 Identifying emissions reductions opportunities in supply chains
 Providing incentives for manufacturers to prove their products are better than average
Select Units of Analysis
 GHGs per dollar
 GHGs per unit (typically the weight of products)
Includes Lifecycle emissions from:

Modify Emissons based on:

 Country or US state of origin (modifies GHG intensity of production)
 Location of retailer (modifies GHG intensity of retailer + distance to market)

Lifecycle Climate Footprint Calculator

 Applications (http://carbonneutral.org):
 Helps household or organization to estimate their total climate footprint
 Allows them to link to offsets providers
 Improved version to launch on January 31, 2008.

Lifecycle Environmental Assessment of Products and Services

Total U.S. Willingness to Pay = Cost to Offset U.S. Consumption
Current price of carbon offsets: $10/ton
Cost of offsets relative to price of:
Food: 0.7%
Goods: 0.5% (LEAPS results)
Services: 0.25%
Total U.S. Consumption: $6 trillion
Cost to offsets total US consumption (6 trillion x 0,9%): ~$6 billion
(or ~30% of IPCC estimate of $200 billion/yr globally to stabilize GHGs)

Project for the CA Air Resources Board

 “Retail Climate Change Mitigation: Life-cycle Emission and energy Efficiency Labels and
standard” Partners: A. Horvath (UCB), E. Masanet (LBNL), S. Matthews and C.
Hendrickson (Carnegie Mellon University)
 Assess opportunities for reducing California’s GHG emissions through the life-cycle of
retail products and services that Californians consume that occur both inside and outside of
California. Starting January 1, 2008
Approach and Methods
1) Development of a California-specific LCA model for evaluation of goods and services
 Production-phase energy use and GHG emissions:
 California EIO-LCA
o In-state versus out-of-state emissions
o California economic sector-specific data
o Based on national EIO-LCA approach
o Includes interstate and international commerce
o Energy and environmental data from CA
o Preliminary model developed in 2005 (annual GHG emissions arising from CA
consumption of semiconductors in personal computers and pharmaceuticals)
 Use-phase energy use and GHG emissions:
 California stock modeling
 Typical operating energy use data
 California-specific grid mix (base and peak loads)
 Disposal-phase GHG emissions:
 California waste disposal and recycling data
2) Assessment of average life-cycle energy use and GHG emissions for 20-30 key retail
products
 Annual energy use and GHG emissions occuring both inside and uotside od California
 Selection based on major emitters and ARB input
3) Estimation of lowest achievable life-cycle GHG emissions by products
 Based on best available technologies and practices at each life-cycle stage
 Production: sector-level improvement potetntial analyses (worldwide)
 Use: best-in-class energy effieciency (e.g. ENERGY STAR products)
 Disposal: optimal waste treatment strategies
 “Low carbon” versions represent minimum life-cycle GHG emissions achievable
through California product standard and/or labels
4) Scenario analysis of technical potential for GHG emissions reductions via product life-
cycle GHG emissions standard and/or labels
 Five year analysis period
 Specific to 20-30 retail products analyzed
 Naturally occuring reductions based on product-specific analysis:
 Stock turnover
 Current energy efficiency and GHG reduction trends
 Remaining technical potential estimated for:
 “Low carbon” product standards (mandatory)
 “Low carbon” product labels (voluntary)  ENERGY STAR elasticity as proxy
 Green purchasing programs
Illustrative Example: California PCs

Annual Life-Cycle GHG Emissions of California’s Installed Base of PCs

GHG Emission Reduction Potential

Translation to “Low Carbon PC” Standard/Label

 Minimization of production-phase energy use and GHG emissions
 Minimization pf use-phase energy use and GHG emissions
 Minimization of disposal-phase energy use and GHG emissions

Research challenges
 Large number of customer products (significance and magnitude)
 Uncertainty in modeling and data
 Design changes
 Dynamically changing supply chains
 Functional unit
 Updates over time

Conclusions
 Willingness to pay for climate change exist
 Models to measure environmental foorprint are being developed
 Incentives for manufacturers and retailers to become climate neutral exists
 Lacking implementation. Keys to success are:
1. Effective public-provate partnerships
2. High quality offsets
3. Investment in continually improving LCA technology