U.S. Environmental Protection Agency (EPA) have worked to develop a complete set of procedures to use in collecting and organizing the information that must be developed in the course of an LCA (Fava et al., 1990; Vigon et al., 1993). However, many observers remain uncertain about what to do with this information once it is collected. Expressed simply, LCA is a tool for enhancing positive environmental impacts.

Unfortunately, except in the simplest of situations, it is extremely difficult to determine how this general objective informs specific problems—a fact that increasing numbers of LCA practitioners recognize. This difficulty arises from several sources. The most apparent of these is the imperfect understanding of the relationship between releases to the environment and environmental damage, particularly when many such releases must be considered together. However, this limitation apparently has not inhibited the development and application of LCA methodology.

Improvement analysis has proved to be the most complicated aspect of LCA. Improvement analysis assumes that it is possible to discern the best action from a set of possible options. In simple cases, it may be possible to find an action that reduces all impacts on the environment. More often, the best course of action requires an assessment of the relative importance of each of a number of possible consequences. These relative importances reflect the strategic objectives that underlie the problem being considered rather than the results of any purely analytical evaluation. Because of this distinction, substantial hurdles must be overcome before LCA can be applied to broad questions of industrial and social policy.

Review of Valuation Concepts

This difficulty can be best understood by considering the general problem of valuation (see Goicoechea et al., 1982). Figure 1 depicts a hypothetical set of potential alternatives, each of which has (for the sake of illustration) only two characteristic environmental impacts, A and B. Assuming that only one alternative can be chosen, and that the objective is to reduce environmental impact, which alternative should be implemented?

It is easy to reject alternatives 2 and 3, because other choices exist (alternative 7, for example) that reduce impact A and impact B. Alternatives 2 and 3 are members of what is known as the dominated set of alternatives; they are clearly inferior to others. In environmental terms, rejection of the dominated alternatives is an expression of the so-called precautionary principle, which favors taking any action that unequivocally reduces all environmental impact. Similarly, an LCA that showed a facility operating at point 3 would lead to the implementation of an alternative (5 or 6) that reduces all impacts on the environment.

The difficulty arises when a choice must be made among alternatives on the lower edge of the frontier. Which one of these is the best way to operate? Decision analysis refers to these remaining points as the set of nondominated alterna-



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