Towards Balanced Methods for Assessing Social Risks of Renewable and Fossil Electricity Use

Main Presenter:    Hanna Karg 

Co-Authors:   Sonja Haertlé     Heiko Keller      Nils Rettenmaier                                    

Achieving net-zero climate targets requires a profound transformation of the energy system. While this transition is inevitable from an environmental perspective, it entails massive investments in new infrastructure and global supply chains that may be associated with significant social risks. Ensuring a socially just energy transition is therefore a central challenge for life cycle innovation.

Social Life Cycle Assessment (S-LCA) is a well-established tool for identifying and evaluating social risks in global supply chains. However, an imbalance between analyses of fossil-based and renewable energy systems can be observed resulting from two shortcomings. First, commonly used S-LCA databases are retrospective and sector-based, limiting their ability to adequately capture social risks of renewable energies because these are usually not represented as own sectors but pooled with very different fossil-based value chains. Second, social risks arising indirectly from environmental damage—most notably those caused by climate change driven by fossil energy use—are typically excluded from S-LCA, which can result in potentially misleading outcomes.

This presentation aims to discuss methodological approaches that address these limitations. The work is based on S-LCA case studies on energy-intensive new technologies, which were conducted in several EU-funded projects [1] and for which the Social Hotspot Database (SHDB) was used. First, we will present social risk models that explicitly account for renewable energy supply, including solar power, wind power, and biogas. This is achieved by breaking down the price of renewable electricity into different cost categories and assigning them to economic sectors. Special attention is paid to raw material sourcing. Second, we will explore and discuss ways of incorporating social risks resulting from climate change into the S-LCA.

The results indicate that the overall social risk levels of renewable and fossil energy systems appear comparable when risks resulting from environmental damage are excluded. However, the inclusion of climate damages is likely to substantially increase the social risk profile of fossil energy.

This presentation aims to enhance the methodological portfolio for a more comprehensive and forward-looking evaluation of energy-intensive processes by explicitly addressing social risks of renewable energy technologies and by integrating climate damages into social risk assessments. Combined with S-LCA’s ability to identify social hotspots deep within global supply chains, the proposed approach supports the early identification and management of social risks in emerging technologies, thereby contributing to a just and sustainable energy transition.

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