Output is a term used in Life Cycle Assessment with multiple related meanings depending on the context in which it is applied. Understanding these distinctions is essential for accurate LCA modelling and economic analysis.
In the context of process modelling, output refers to an Activity output, which is an exchange from an activity to another activity or to the environment. This encompasses all flows leaving a process or activity, including products, by-products, wastes, and emissions. Activity outputs are fundamental to understanding the material and energy flows within a product system.
In economic accounting, output takes on a more specific meaning. Gross economic output represents the total value of the product outputs from an activity or group of activities over a specified time period or for a specified product, including subsidies. Gross output provides a measure of the total production value generated by economic activities and is also referred to as revenue in some contexts.
Conversely, Net economic output, also known as value added, represents the value of the product output minus the costs of intermediate product inputs for the same activity or group of activities. When summed over a complete product system, the net economic output equals the life cycle costs. Value added is typically subdivided into labour costs, net taxes (taxes minus subsidies), net operation surplus, and rent, providing a more detailed picture of the economic value created by activities.
It is important to note that activity output, as used in LCA terminology, should not be confused with gross or net economic output. The former describes physical and environmental flows, whilst the latter describe economic value. This distinction is critical for maintaining clarity when conducting integrated environmental and economic assessments.
