Eco-costs are the costs of the environmental burden of a product on the basis of prevention of that burden. They are the costs which should be made to reduce the environmental pollution and materials depletion in the world to a level which is in line with the carrying capacity of Earth.
For example: for each 1000 kg CO2 emission, one should invest €150,- in offshore windmill parks (plus in the other CO2 reduction systems at that price or less). When this is done consequently, the total of CO2 emissions in the world is expected to be reduced to a level that is in compliance with the Paris agreement. As a result, global warming will stabilize (at a level of 2 degrees C). In short: "the eco-costs of 1000kg CO2 are € 150,-".
Similar calculations can be made on the environmental burden of acidification, eutrophication, summer smog, fine dust, eco-toxicity, and the scarcity of metals, rare earths, fossil fuels, water and land (nature). As such, the eco-costs are 'external costs', since they are not yet integrated in the real life costs of current production chains (Life Cycle Costs). The eco-costs should be regarded as hidden obligations.
The eco-costs of a product are the sum of all eco-costs of emissions and use of resources during the life cycle "from cradle to cradle". The widely accepted method to make such a calculation is called life cycle assessment (LCA), which is basically a mass and energy balance, defined in the ISO 14040, and the ISO 14044 (for the building industry the EN 15804). The eco-costs method is in compliance with ISO 14008 (“Monetary valuation of environmental impacts and related environmental aspects”).
The practical use of eco-costs is to compare the sustainability of several product types with the same functionality. The advantage of eco-costs is that they are expressed in a standardized monetary value (€) which appears to be easily understood 'by instinct'. Also the calculation is transparent and relatively easy, compared to damage based models which have the disadvantage of extremely complex calculations with subjective weighting of the various aspects contributing to the overall environmental burden.M. Bengtsson, B. Steen.: Weighting in LCA, approaches and applications. Environmental Progress 2000; 19(2): 101-109G. Finnveden; On the Limitations of Life Cycle Assessment and Environmental Systems Analysis Tools in General. Int. J. LCA 5, pp 229-238, 2000
The system of eco-costs is part of the bigger model of the ecocosts/value ratio, EVR.
Background information
The eco-costs system has been introduced in 1999 on conferences, and published in 2000-2004 in the International Journal of LCA,J.G. Vogtländer, A. Bijma;The 'virtual pollution costs '99', a single LCA-based indicator for emissions, Int. J. LCA, 5 (2), pp.113 –124, 2000J.G. Vogtländer, H.C. Brezet, Ch.F. Hendriks; The Virtual Eco-costs '99, a single LCA-based indicator for sustainability and the Eco-costs / Value Ratio (EVR)model for economic allocation, Int. J. LCA, 6 (3) pp 157-166, 2001 and in the Journal of Cleaner Production.,J.G. Vogtländer, A. Bijma, H. Brezet; Communicating the eco-efficiency of products and services by means of the Eco-costs / Value Model, Journal of Cleaner Production Volume 10, 2002, pp. 57-67J.G. Vogtländer, E. Lindeijer, J.-P. M. Witte, Ch. Hendriks; Characterizing the change of land-use based on flora: application for EIA and LCA, Journal of Cleaner Production, accepted 2002, Volume 12, Issue 1, February 2004, Pages 47-57 The eco-costs system has been uptated in 2007, 2012, 2017, 2022 (2023), and 2025. It is planned to update the system every 5 years to incorporate the latest developments in science. The system is summarized at the website www.ecocostsvalue.com, and published in two text books.J.G. Vogtländer; LCA, a practical guideline for students, designers, and business managers, Sustainability Impact Metrics, sixth edition, 2023Vogtländer et al.; Eco-efficient Value Creation, sustainable strategies for the circular economy, Sustainability Impact Metrics, third edition, 2023 Scientific elaborations can be found in 10 PhD theses, see the eco-costs website tab books and references
The method of the eco-costs is based on the sum of the marginal prevention costs (end of pipe as well as system integrated) for toxic emissions related to human health as well as ecosystems, emissions that cause global warming, and resource depletion (metals, rare earths, fossil fuels, water, and land-use). For a visual display of the system see Figure 1.
Marginal prevention costs of toxic emissions are derived from the so-called prevention curve as depicted in Figure 2. The basic idea behind such a curve is that a country (or a group of countries, such as the European Union), must take prevention measures to reduce toxic emissions (more than one measure is required to reach the target). From the point of view of the economy, the cheapest measures (in terms of euro/kg) are taken first. At a certain point at the curve, the reduction of the emissions is sufficient to bring the concentration of the pollution below the so-called no-effect-level. The no-effect-level of emissions is the level that the emissions and the natural absorption of the earth are in equilibrium again at a maximum temperature rise of 2 degrees C. The no-effect-level of a toxic emission is the level where the concentration in nature is well below the toxicity threshold (most natural toxic substances have a toxicity threshold, below which they might even have a beneficial effect), or below the natural background level. For human toxicity the 'no-observed-adverse-effect level' is used. The eco-costs are the marginal prevention costs of the last measure of the prevention curve to reach the no-effect-level. See the abovementioned reference 4 and www.ecocostsvalue.com for a full description of the calculation method (note that in the calculation 'classes' of emissions with the same 'midpoint' are combined, as explained below).
The classical way to calculate a 'single indicator' in LCA is based on the damage of the emissions. Pollutants are grouped in 'classes', multiplied by a 'characterisation' factor to account for their relative importance within a class, and totalised to the level of their 'midpoint' effect (global warming, acidification, nutrification, etc.). The classical problem is then to determine the relative importance of each midpoint effect. In damage based systems this is done by 'normalisation' (= comparison with the pollution in a country or a region) and 'weighting' (= giving each midpoint a weight, to take the relative importance into account) by an expert panel.
The calculation of the eco-costs is based on classification and characterisation tables as well. Most of these tables stem from the Environmental Footprint system: for acidification, eutrophication, greenhouse gasses IPCC AR6 GWP 100 years 2021 (), and the USEtox model (). However, the eco-costs system has a different approach to the normalisation and weighting steps. Normalisation is done by calculating the marginal prevention costs for a region (i.e. the European Union), as described above. The weighting step is not required in the eco-costs system, since the total result is the sum of the eco-costs of all midpoints. The advantage of such a calculation is that the marginal prevention costs are related to the cost of the most expensive Best Available Technology which is needed to meet the target, and the corresponding level of Tradable Emission Rights which is required in future. From a business point of view, the eco-costs are the costs of non-compliance with future governmental regulations. Example from the past: emissions of Volkswagen diesel.
The eco-costs have been calculated for the situation in the European Union. It is expected that the situation in some states in the US, like California and Pennsylvania, give similar results. It might be argued that the eco-costs are also an indication of the marginal prevention costs for other parts of the globe, under the condition of a level playing field for production companies.
Eco-costs 2025 The method of the eco-costs 2023 (version 1.0) comprises tables of over 58.000 emissions and 2200 materials and processes. It has been made operational by special databases for SimaPro and OpenLCA. Excel look-up tables are provided at www.ecocostsvalue.com. To provide quick benchmarking on materials in Cradle-to-cradle systems, Idematapp and IdematLightLCA have been developed for mobile telephones in IOS and Android.
For emissions of toxic substances, the following set of multipliers (marginal prevention costs) is used in the eco-costs 2025 system: eco-costs ofequivalent acidification 7.65 euro / mol H+ equivalent eutrophication 5.38 €/kg phosphate equivalent ecotoxicity 2.89 E-3 €/CTUe human toxicity, cancer 920000 €/ CTUh human toxicity, non cancer 216000 €/ CTUh summer smog (Photochemical oxidant formation) 6.12 euro per kg NMVOS equivalent fine dust 40.1 €/kg fine dust PM2.5 global warming (GWP 100) 0.150 €/kg CO2 equivalent
The characterization ('midpoint') tables which are applied in the eco-costs 2025 system, are recommended by the ILCD:Characterization factors of the ILCD Recommended Life Cycle Impact Assessment methods, ILCD IPPC 2021, 100 years, for greenhouse gases (EF version) USETOX 2 (EF version), for human toxicity (cancer and non-cancer), and ecotoxicity EF tables for acidification, eutrophication, and photochemical oxidant formation EF tables plus UNEP/SETAC 2016,Global Guidance for Life Cycle Impact assessment Indicators Volume 1, United Nations Environment Programme, 2016 for fine dust PM2.5.
In addition to above mentioned eco-costs for emissions, there is an extra set of eco-costs to characterize the 'midpoints' of resource depletion and protection of Nature: eco-costs of metal scarcity (including rare earth) eco-costs of uranium and transport fuels eco-costs of water scarcity (based on the Baseline Water Stress indicator - BWS - of countries World Resources Institute Aqueduct project. Working Paper: Aqueduct Country and River Basin rankings. A weighted aggregation of spatially distinct hydrological indicators, Gassert et al. December 2013) eco-costs of loss of biodiversity (of vascular plants and mammals), based on land-use change eco-costs of the plastic soup
The abovementioned marginal prevention costs at midpoint level can be combined to 'endpoints' in three groups, plus global warming as a separate group: eco-costs of human health = the sum of cancer and non-cancer, summer smog, fine dust eco-costs of protecting Nature (biodiversity) = the sum of acidification, eutrophication, ecotoxicity, plastic soup, biodiversity eco-costs of resource scarcity = the sum of metals scarcity, water, uranium and transport fuels, land-fill eco-costs of global warming = the sum of CO2 and other greenhouse gases (the GWP 100 table) total eco-costs = the sum of human health, ecosystems, resource scarcity and global warming
Since the endpoints have the same monetary unit (e.g. euro, dollar), they are added up to the total eco-costs without applying a 'subjective' weighting system. This is an advantage of the eco-costs system (see also ISO 14044 section 4.4.3.4 and 4.4.5). So called 'double counting' (ISO 14044 section 4.4.2.2.3) is avoided. The eco-costs system is in compliance with ISO 14008 (“Monetary valuation of environmental impacts and related environmental aspects”), and uses the ‘averting costs method’, also called ‘(marginal) prevention costs method’ (see section 6.3).