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5          Alternative or complementary approaches

 

5.1          SPI Index

 

The Sustainable Process Index (SPI) [13] displays the ecological footprint of a product or service and is intended to trigger behavioral changes. The SPI is explicitly calculated for a product and is based on average values, e.g. land use, energy consumption, emissions, etc.

If products and services were to show the SPI alongside the normal price, it would be comparable to the REU price. Nevertheless, there would be some disadvantages that would be eliminated with the concept of the REU currency.

  1. There are many very small and different partial steps and partial products in the product process. There are these difficulties:
    • A large number of sub-products from different suppliers would have to be precisely recorded and evaluated on an individual basis so that a realistic, individual SPI could be created for each specific end product. The use of averages would dilute the individual SPI and make product comparisons impossible. End products are very complex. It is difficult to determine analytically which costs arise from which production step.
      REU: Every supplier will have to pass on REU costs to the buyer according to his current framework conditions and the goods produced. This happens analogously to normal money. Here, too, production costs will directly reflect the price of the product, otherwise production would be uneconomical.
      REU costs can be calculated in the same way as money costs. Since the money costs are determined correctly even for complex products, this is also possible for REU costs. This also applies if a large number of products are to be evaluated: With normal money, these mechanisms have been proven to work.
    • The SPI value of intermediate products does not only depend on the production at the supplier, but also on many other steps, e.g. transportation costs, storage costs, etc.
      REU: Since every service and every product has a REU price, this also applies to all derived products, including all hidden costs. For example resources to transport goods will have  REU price.. These will be invoiced. Long, ecologically expensive transport routes will cause higher REU costs, which will be included in the final product price.
    • There are different usage profiles for the product, but the usage profile influences the Life-Cycle SPI evaluation. The SPI value would therefore have to evaluate the product and its use.
      REU: REU: Depending on the usage profile, the user has to pay REU. These will be charged to the user in proportion to use and are not part of the product price. For example, passenger cars have an ecological footprint through the manufacture that is paid for when the car is purchased. However, the usage costs are proportional to the individual mileage, e.g. fuel costs, tire wear, operating fluids, exhaust emissions and are paid separately and optimized by the consumer.
    • If production steps or framework conditions change, this will not automatically and promptly affect the SPI of the end product, as the SPI would first have to be recalculated. Probably small improvements will not be visible in the SPI at all. This makes permanent improvement of the SPI values of all sub-products more difficult and reduces the motivation to realize even small improvements.
      REU: Classic business management has established a variety of mechanisms with which costs can be saved through the smallest optimizations, which have a direct effect on the price. The same rules apply to REU.
    • For many small mass products there will probably be no calculation of the SPI.
      REU: Since there is a cash prize even for the smallest products, there will also be a REU prize. The mechanisms are the same.
    • The SPI is an estimate and is based on assumptions and averages, e.g. the electricity mix. This makes small differences between suppliers invisible.
      REU: The assumptions and estimates for the REU price are made at the sources. The distinction in the products results as soon as manufacturers use more or less environmentally harmful resources. This will immediately be reflected in the REU prices of its products. For example, an electricity supplier that uses all types of power plants could charge an average REU price, but will not be as competitive in terms of REU costs as a supplier with exclusively renewable energy sources. For the gardener, it is also not important how the entrepreneur allocates the REU costs to the products; this is his entrepreneurial freedom.
  2. The SPI value is not recognizable by the product or the intermediate products.
    • The SPI is not considered at the moment of the purchase decision because it is not known for the individual product or because different products have the same SPI. With many small products, the buyer may also think that the ecological costs are negligible.
      REU: Since it is possible to give each product a cash prize, this is also possible for the REU prize. He's subject to the same laws.
    • Even if the SPI value were apparent, it would only be a non-binding indicator. The consumer might choose a product with a better SPI out of conviction, but there is no economic need for it.
      REU: As the individual REU budget is limited, there is a need to handle REU carefully and buy REU optimized products. Everyone is free to decide on what he spends REUon. The REU optimization pressure will probably be higher than that of money, since in principle any amount of money could be earned.
  3. Not all resources are considered in the SPI, e.g. the application of poisons is not considered.

REU would be collected for all relevant resources so that a balanced assessment of the ecological footprint is possible.

The REU currency is a practicable implementation of the SPI considerations. Many basics necessary for the SPI calculation can be used to determine the REU costs at the resource sources. In addition further environmental costs must be included.

 

5.2          MyEcoCost

 

MyEcoCost [14] describes a process that records resource costs and makes them visible to the customer in addition to the product price, that is, the targets are congruent with the REU currency. In detail these are:

Identical:

  • Aggregation of ecological costs across the value chain
  • Visibility with the consumer / buyer

Differences:

  • MyEcoCost aims to achieve more resource efficiency through information. The REU concept also aims to limit the overall use of resources by providing a limited budget of REU for each person.
  • In the REU concept, there is a fictitious business partner who determines and demands the resource costs at the ecosystem/economy interface. His goal is that no more resources are used than can be regenerated.
  • REU costs for products and intermediate products result from a decentralized market economy mechanism, analogous to the classical economic system. MyEcoCost is based on material costs and CO2 emissions, which are provided by each participant at the individual product level and aggregated in a central database. The administrative effort is likely to be greater and the values less dynamic.
  • MyEcoCost considers partial aspects (CO2 emissions, material costs). REU all resources and services at the interface ecosystem / economy.
  • The REU budget is limited And this creates a strong incentive to conserve resources throughout the entire value chain. MyEcoCost, on the other hand, is informative and non-binding.
  • REU takes future costs into account when disposing of products.

5.3          Further alternatives

 

Natural Dollar

  • eco coins

To be analyzed.

Copyright © 2019 | Martin Huck | E-Mail: info@resource-equivalent-unit.de

 
 
 
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