CP Indicators

Measuring cleaner production (CP) is of critical importance. You must use appropriate indicators, which are generally applicable, yet specifically measurable, and address both the productivity and environmental aspects of your system in an integrated fashion. The indicators should enable not only estimation of the CP of a product or process and its comparison with other equivalents, but also improvement of the existing process or product and the development of new products.

CP Index and CP Ratio³

Life Cycle Assessment (LCA) and Total Cost Assessment (TCA) are two types of CP indicators that help managers understand the practical implications of CP and make right decisions.

"Product manufacturers are responsible for their own operations, upstream processes, and downstream uses and disposal of the product. Companies are increasingly considering the entire life cycle of their products when seeking to improve environmental performance, in part as a  consequence of the concept of "extended producer's responsibility".³ Therefore, CP measurement should be based on life cycle impacts and costs.

CP Index is the ratio of the productivity of the system to its environmental impact. Productivity is measured in terms of economic efficiency using Total Cost Assessment (TCA), and the environmental impact is calculated using standard LCA methodology.

The CP Index can be used to measure the CP level of a product or process and to compare it with similar products and processes. You typically must chose between improving existing processes or products and adopting a new alternative that may offer better performance. Therefore, you must use one more indicator, the "CP ratio" for internal decision-making. The CP ratio considers not only costs and profits over time, but also environmental impacts from the perspective of CP.

Simply making a ratio from the two CP indices "of the existing and alternative systems would fail to adequately reflect the concept of time value of money."³ The CP ratio incorporates the term "present cost" to capture the change of value of the investment over time.

First, you must define the "productivity ratio" as the ratio of the productivity elements of the current process and an alternative process expressed in economic efficiency over time. Then, you must define the "environmental ratio" as the ratio of reciprocals of the environmental impact elements between the current process and an alternative process. These two ratios are multiplied together to generate the value of the CP ratio. If the CP ratio is higher than 1, it means that the alternative is better than the current one from the CP perspective.