Further theory on market trends

Market trends are of interest at two very different points in the procedure for linking datasets in consequential LCA modelling:

  • When identifying the suppliers that are affected by a change in demand, and which should therefore be the ones included as suppliers to a market. This is further dealt with in the section on marginal suppliers.
  • When identifying which of two or more joint co-products is the determining one (when all co-products have alternative production routes) by comparing the normalised market trends of the co-products, to see which trend in demand impose a constraint on the output of the other co-products. The market trends that are relevant for this purpose are for the generic markets for the co-products, not for the specific outputs of the joint production, since these are per definition identical, due to the fixed proportions of the outputs of the joint production.

Market trends are typically obtained by combining statistical data showing the past and current development of the market and different forecasts and scenarios. Sector forecasts are typically available from national and supranational authorities, while more product specific forecasts are available from industrial organizations.

Note that it is the overall market trend which is of interest and not the direction of the change in demand implied by the specific decision studied. This is because the small individual decisions that we typically study in an LCA do not affect the overall trend in the market, but only influence the size or speed of the existing trend – so that it is the same suppliers will be affected by an increase and a decrease in demand. If the decision to be supported by the LCA is so large that it influences the direction of the overall market trend (from increasing to decreasing or vice versa) then a specific modelling of this change will anyway be needed.

How to cite this: 
Consequential-LCA (2015). Further theory on market trends. Last updated: 2015-10-27. www.consequential-lca.org