Economic and environmental sustainability assessment of wine grape production scenarios in Southern Italy

doi:10.4236/as.2013.45B003

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Vol.4, No.5B, 12-20 (2013) Agricultural Sciences

doi:10.4236/as.2013.45B003

Economic and environmental sustainability

assessment of wine grape production scenarios in

Southern Italy

Alfio Strano, Anna Irene De Luca*, Giacomo Falcone, Nathalie Iofrida, Teodora Stillitano,

Giovanni Gulisano

Department of AGRARIA, Mediterranean University of Reggio Calabria, Reggio Calabria, Italy;

*Corresponding Author: anna.deluca@unirc.it

Received 2013

ABSTRACT

The low resilience of ecosystems imposes a sus-

tainable management of natural resources through

more rational use s, la nd pro tec ti on, en er gy sav ing

and low carbon production technologies. Agri-

culture has a great responsibility in managing

these resources that are the principal inputs of

its processes. Production systems must pay

attention, at the same time, to ec onomic viability

and environmental protection. Since decades,

the international scientific community is facing

the great challenge of assessing the sustain-

ability of agricultural engineering techniques, in

order to help both private and public decision

making, but also to meet consumer’s require-

ments for high quality and low impact products.

To achieve that, widely accepted assessment

instruments, w hose results have to be clear and

understandable to a broad public, and that are

necessary. In this direction, Life Cycle Thinking

(LCT) is gaining consensus as conceptual

model, considering goods and services produc-

tion and consumption all along the whole life

cycle, from planning to disposal. Its methodo-

logical frame- work, the Life Cycle Management

(LCM), offers many standardised tools to assess

impacts of products and processes: Life Cycle

Assessment (LCA), to evaluate environmental

impacts and Life Cycle Costing (LCC) for eco-

nomic ones. Among many impacts categories

LCA also allows to identify the carbon footprint,

that can be quantified in terms of Global Warm-

ing Potential (GWP). This re-search has ana-

lyzed and compared different scenarios of wine

grapes production in Cirò, an important viticul-

tural area located in Calabria region (Southern

Italy). LCA and LCC methodologies have been

useful to assess them from an environmental

and economic standpoint. Results have allowed

the authors to rank training and farming sys-

tems performances.

Keywords: Life Cycle Assessment (LCA); Life

Cycle Costing ( LCC); Sus tainable agriculture;

Decision Ma kin g; Glob al Warming; CO2 Equivalents

1. INTRODUCTION

Anthropic activities are the principal responsible for

the depletion of natural resources, because exploitations

are carried out faster than the ability of ecosystems to

regenerate themselves. The results are global warming,

loss of biodiversity, exhaustion of energy resources, pol-

lution and wastes production that lead, in the long run, to

social and economic consequences too. There is a grow-

ing interest in knowledge acquisition about how to

measure impacts and how to relate them to their causes,

such as carbon footprint for global warming and climate

change.

The assessment of environmental and economic sus-

tainability relating to a product or a process is a high

concern for many stakeholders, e.g. public deciders,

farmers, entrepreneurs and consumers.

According to [1], agriculture and food production are

one of the principal responsible for environmental im-

pacts and natural resources overexploitation. In this

sense, it is preferable to carry out a farm management

which combines carbon capture and emissions reduction

considering several farming phases like grazing and fer-

tilizing, tillage, crops alternation, harvesting and so on

[2].

Today more than ever, new methodological approaches

are required for management and decision making to

meet consumers’ needs for high quality and healthy

products, and entrepreneurs’ necessity of economic vi-

ability, using natural resour ces rationally.

A. Strano et al. / Agricultural Sciences 4 (2013) 12-2 0 13

In this way, Life Cycle Management (LCM) is gaining

great consensus as methodological framework helpful to

decrease footprints, add value to products (i.e. goods or

services) or supply chains and improve th e sustainability

performance of a business or organization.

These tools enable the evaluation of all production

phases, “from cradle to grave”, in order to understand

how to make them more compatible with environment,

economics and society.

The purpose of this study moves from the necessity to

know how to use natural resources in a more rational

way, and how to farm saving energy, protecting land and

reducing carbon footprint.

It is focused on four different productive scenarios in

the viticultural area of Cirò, in Calabria region (Southern

Italy). Grapevine production has been analyzed from

both an economic and environmental standpoint through

Life Cycle Costing (LCC) and Life Cycle Assessment

(LCA) methodologies.

Results have allowed to make comparisons and to rank

performances of each scenario for every field of study.

Findings of this study highlighted the possible effective-

ness of the joint use of LCA and LCC, and that they can

be a useful decision making instrument for both public

and private deciders.

2. METHODOLOGICAL BACKGROUND

The widely accepted definition of sustainable devel-

opment was given by the commonly known Brundtland

Report in 1987 “Our common future”, that described it

as the “development that meets the needs of the present

without compromising the abilit y of future generation s to

meet their own needs” [3].

According to this definition, sustainability is achieved

through the in tegration of three interrelated features such

as social equity, economic viability and environmental

protection. In this sense, global warming and climate

change are a high concern that putted the attention to the

necessity of low carbon human activities, which main

indicator is “carbon footprint” [4] that measures human

activities impacts on global climate [5].

A new conceptual model, called Life Cycle Thinking

(LCT), has arisen from the necessity to deepen the

knowledge about all the impacts (i.e. environmental im-

pacts, economic and social ones) that products and ser-

vices generate during every stage of their life cycle,

“from cradle to grave”, or rather, from planning to dis-

posal, taking into account all inputs and outputs of re-

source and energy [6].

Many methodological tools have been developed to

achieve this goal, such as LCA and LCC for environ-

mental and economic sustainability assessment. They

belong to a toolbox named LCM, which is the methodo-

logical framework that can help public deciders, entre-

preneurs and managers addressing their activities in a

more sustainable way. The LCM multidisciplinary ap-

proach have been successfully used in food production

[7,8], a sector that notoriously has a strong environ-

mental impact and often a low profitability.

2.1. Life Cycle Assessment

The Society of Environmental Toxicology and Chem-

istry (SETAC) defined LCA as “an objective process to

evaluate the environmental burdens associated to a

product, a process, or an activity by identifying energy

and materials usage and environmental releases, and to

evaluate opportunities to achieve environmental im-

provements” [9].

These improvements can be measured in order to un-

derstand which useful changes should be adopted during

the life cycle of a product (good or service). The Interna-

tional Organization for Standardization (ISO) has pub-

lished international standards ISO 14040-14044 about

principles, framework and requirements for a correct use

of LCA [10,11].

Several categories of impact are taken into account,

and among them, climate change is evaluated in terms of

Global Warming Potential (GWP), i.e. greenhouse gases

emissions in CO2 equivalents, as suggested by the Inter-

governmental Panel on Climate Change (IPCC) [12]. It is

well known that carbon dioxide, with others greenhouse

gases, is responsible for global warming; the overall

amount of CO2 and other greenhouse gas emissions as-

sociated to a product along its lifecycle is commonly

known as carbon footprint [4], for which LCA provides

requirements for performing transparent and widely ac-

cepted calculations [12,13]. According to [10,14], the

four steps to implement a LCA study are the following:

a) Goal and scope definition. It means defining: field

of application, addressees, functions of the object to be

assessed, functional equivalent for comparing assertions,

system boundaries and procedures of allocation, choice

of environmental impact categories and methodologies

for their interpretation, data requirements and quality,

source, assumptions and limitations, critical review, re-

port format;

b) Life Cycle Inventory (LCI). This second step con-

sists of qualitative and quantitative data collection, cal-

culation of incoming and exiting flows (e.g. energy, ma-

terials and emissions) and validation. LCI is an iterative

process, so a re vi ew of procedures or goals may occur;

c) Life Cycle Impact Assessment (LCIA). It consists

of quantifying potential environmental impacts, through

three sub-steps: selection of impact categories, category

indicators and characterisation models; classification in

impact categories; impact measurement by characterisa-

tion. Optional analysis-normalisation, grouping and

weighting-and evaluation of indicators results reliability

A. Strano et al. / Agricultural Sciences 4 (2013) 12-2 0

- importance, uncertainty and sensitiv ity - can be useful;

d) Life cycle interpretation of results. It highlights hot

spots and allows formulating conclusions and helpful

recommendations for deciders, which is the reason why

LCA can be a valuable decision support system.

Regarding the application of LCA to food farming,

some examples have been found in literature [15-17]

among which empirical studies on viticulture activities,

such as wine production, including agricultural phases.

2.2. Life Cycle Costing

At its origins, LCC was an instrument of management

accountability to assess investments that did not take into

account environmental costs [18,19]. But as sustainabil-

ity entails managing the integration of different issues

(i.e. environmental issues, economic and social ones),

more specific tools are required to measure and to evalu-

ate both environmental and economic feasibility of

changes and renovations that occur during the life cycle

of a product [20]. An example is the so-called LCA-type

LCC [21] or Environmental LCC, based on the assess-

ment of all kind of costs during life cycle afforded by

every involved actor, including long run externalities.

However, to be effective, LCC has to be developed

jointly with a LCA, taking into accoun t the same product

system, boundaries, and functional unit, in order to ob-

tain a complete assessment of environmental impacts and

production costs. It does not exist a specific standard for

the joint implementation of LCC and LCA, however,

some guidelines can be found in [10,11,22].

According to [23] three conditions have to be defined

before starting a LCC analysis: life cycle phases, inven-

tory elements for each phase, environmental effects con-

nected to different impacts. Applying LCC allows to

achieve two main goals: adapting costs estimation ap-

proaches to relate environmental costs to specific proc-

esses and products, and facilitating the identification of

best practices to prevent pollution and to reduce wastes.

3. MATERIALS AND METHODS

3.1. Regional Context and Site Description

According to the 6th Italian Agriculture Census [24],

vineyard surfaces of Calabria region, in Southern Italy,

amount to 9,075.90 hectares (ha), representing 2.4% of

the national surface and 34.4% less than 2000.

Concerning farms number, a general negative trend of

Italian viticulture is confirmed by regional data: Calabrian

vine growing farms were 34,291 in 2000, and 13,390 in

2010, with a re duct i o n o f 61 % .

In this regional context, the province of Crotone (where

the case study is located) counts a vineyard surface of

3,236 ha, that represents the 32.3% of the regional viti-

cultural area. In this province the general decrease of

surface and farms is attenuated. This is consistent with

the important role played by viticulture in this province

that represents over 70% of the cultiv ated areas with cer-

tificated labels products. In this province, the “Cirò”

production area is very significant because its “Protected

Designations of Origin” (PDO) wines amounts to 80% of

Calabrian production. The research context is located in

the above mentioned area (Figure 1) and extends along

the Ionian cost for about 25 km and inland up to Sila’s

mountains.

The area includes the municipalities of Cirò, Cirò Ma-

rina and, partly, of Melissa and Crucoli. The orography is

rather varied, with a coastal strip at the sea level and the

terraced hills at about 300 - 350 m above sea level. Pre-

cipitations are mainly distributed in the autumn-winter

season, maximum temperatures occur in August requir-

ing the use of emergency irrigation, and soils texture

varies from sandy loam to medium texture.

Despite wine production represents a historic activity

of great importance within the Cirò area, farms produc-

tion structures are quite obsolete: grapevines are culti-

vated with traditional techniques, with low levels of

mechanization. Most of the vineyards are conducted with

“gobelet” or “espalier” (cordon and Guyot) training sys-

tems, which require high levels of labour generating so

high production costs. Organic viticulture is very devel-

oped and it is characterized by low levels of external

inputs in the production cycle, coherently with the pro-

cedural guidelines of “Cirò” PDO.

Two cropping systems-organic and conventional-and

two training systems-espalier and gobelet-have been

identified and therefore, four production scenarios have

been studied: “organic-espalier” (OE), “conven-

tional-espalier” (CE), “organic-gobelet” (OG) and “con-

ventional-gobelet” (CG). After analyzing the main tech-

nical and economic characteristics, values per area unit

Vineyard

Figure 1. Study area. The Cirò territory in Calabria re-

gion (South Italy).

A. Strano et al. / Agricultural Sciences 4 (2013) 12-2 0 15

and their relative impacts have been calculated.

3.2. Application of LCA Method to the Case

Study

The first phase of the analysis, according to LCA

guidelines [10,11], has been the identification and defini-

tion of the above mentioned scenarios.

In a second phase, 1 ha of planted surface has been

chosen as a “functional unit”, and then system limits

have been defined considering production phases “from

cradle to gate”, or rather from plantation to wine grapes

harvesting, excluding wine processing, distribution and

consumption.

Therefore, the considered life cycle goes from vine-

yard plantation to disposal (25 years). The same life cy-

cle has been object of an economic assessment through

the LCC methodology.

Inputs and outputs data related to production have

been directly collected from the field. Data on emissions

have been obtained from secondary sources; these last

data did not correspond exactly to the reality of the ana-

lyzed farms, however errors have been systemic and did

not affect comparison results.

Data have been collected from a group of 24 ordinary

farms with an average surface of about 15 - 20 ha, be-

cause of their significance among others.

Techno-economic data of three growing seasons -

2009, 2010 and 2011 - have been collected and consid-

ered in order to reduce the uncertainty degree connected

to seasonality and subjectiv ity of farms management, but

also to attenuate production fluctuations and other exter-

nal factors that could have influenced plants productivity.

Therefore, for each farm, average values per hectare

have been processed. To identify analytically all inputs

and outputs, both environmental and economic ones, a

specific questionnaire has been arranged.

In addition to general questions about the farm, it has

also included specific questions on inputs quantities and

prices, as well as the obtained yields. For the analyzed

three-year period, the following factors have been con-

sidered: fuel consumption, for each technical operation;

water consumption required for rescue irrigation; modal-

ity of water distribution and related energy consumptions;

quantity, type, period and distribution modality of pesti-

cides; wastes disposal modality.

In order to adopt the LCA method, collected data have

been processed and grouped into macro categories as

shown in Table 1.

Inventory data were processed using SimaPro 7.2

software, Eco-invent V. 2.0 database and Eco-indicator

method to elaborate each scenario. At a latter time, data

have been processed with an additional method, EDIP

2003 (Environmental Design of Industrial Products), in

order to compare the LCA results and to focus the GWP

impact of the four considered scenarios, and so pointing

out the carbon footprint.

3.3. Application of LCC Method to the Case

Study

In order to implement an economic analysis the LCC

method has been used, considering farm labour remu-

neration, land and working capital [25].

In this way, it has been possible to realize an inventory

costs complementary to LCA inventory [18], as estab-

lished in [10].

The same parameters and life cycle described in the

previous paragraph has been considered for LCC imple-

mentation. Each input and output considered in LCA

analysis (i.e. inventory data) has been transformed in

monetary values by multiplying the average quantity (of

the three year period) by the unit price related to the last

year of production.

In order to reach the total cost o f every single process,

all other costs associated to the inputs (e.g. those costs

afforded for labour, disposal, etc.) have been considered.

Furthermore, fixed costs linked to the overall production

process (e.g., shares of insurance, taxes, etc.) have been

considered for each production phase.

Obtained data have been used to perform an invest-

ments analysis, and so assessing the overall life cycle

cost through appropriate financial indices: the Net Pre-

sent Value (NPV) and the Internal Rate of Return (IRR)1.

Table 1. Scheme for LCA data collection.

Considered

elements Measurement

unit Description

Fuel

consumption l/ha/year Fuel consumptions per si ng l e fa rming

operation

Water

consumption m3/ha/ yearWater consumptions per irrigation

operation and pesticid es d is tribution

Fertilisationkg/ha/year Quantities of fertilizers considering

titrations of nutritive elements

Pesticides

treatments kg/ha/year Active principles distributed

Electricity kW/ha/yearE nergy consumption per farming

operation

Wastes kg/ha/year

Wastes per farming cycle in terms of

High-density polyethy lene (HDPE)

disposal (crates, packagi ng materials,

bottles)

Yield t/ha/year Average of wine grapes produced

Source:[25].

1Net Present Value (NPV) expresses the sum total of an investment’s

discounted future cash flows. Internal Rate of Return (IRR) is a rate o

return used to measure and compare the profitability of investments.

A. Strano et al. / Agricultural Sciences 4 (2013) 12-2 0

These parameters take into account the economic and

financial trend of investment during the whole life cycle.

A discounting rate of 1.8% has been applied, considering

the low risk and long-lasting nature of agricultural in-

vestments. The average inflation rate has not been con-

sidered, in order to reduce the degree of results uncer-

tainty. All cash flows have been discounted through the

following Eq.1:



PdcPl C



=Discounted Production Cost - decreas-

ing phase (from the 23rd to the 25th year);

(1 )

UdPl

r= Discounted Useful fo r di sp osal (2 5th year).

The discounted costs were obtained through the fol-

lowing equations (Eq.2 and Eq.3):

 

000

34 25

(1 )

TrPl CPgrPl C

PlCPl DsCPlInCrr

PkPl CPdcPl CUdPl







 







NPV = B0

－

0 (2)

IRR = B0

－

0=0 (3)

where:



001



 = Value of actual benefits;

(1)



001





 = Value of actual costs;

where

TH = Time Horizon (25 years);

Pl C = Discounted total Cost of Planting; n = TH = 25 years.

PlDsC = Planting Design Cost; LCA and LCC results have been compared in per-

formances rankings in order to assess the environmental

and economic sustainability of each scen ario.

PlInC = Planting Installation Cost;



TrPl C



= Discounted Training System Cost (from

the 1st to the 3rd year); 4. DISCUSSION OF RESULTS AND

CONCLUSIONS



PgrPl C



= Discounted Production Cost - growing

phase (from the 4th to the 7th year);

Results did not enable authors asserting which is, in

absolute, the most sustainable scenario among those as-

sessed, but they allow to make comparisons. Throug h the

implementation of LCA, Eco-indicator 99 method has

allowed modelling inventory data into impacts categories

and then evaluating impacts - as balance of positive and

negative ones.



PkPl C



= Discounted Production Cost-constant

phase (from the 8th to the 22 nd year);

Results (Figure 2) has shown that, in average, the

1,446.86 1,569.55

1,757.23

2,008.98

500

1,000

1,500

2,000

2,500

OE OG CECG

Minerals

Land use

Acidification/ Eutrophication

Ecotox ic ity

Ozone layer

Radiation

Climate change

Resp. ino rg ani cs

Resp. organics

Carcinogens

Figure 2. LCA results - Eco-indicator 99 Single score per impacts categories.

Openly accessible at

A. Strano et al. / Agricultural Sciences 4 (2013) 12-2 0 17

most sustainable scenario is “OE” with 1,446.86 Eco-

points, and the worst performing one is “CG” scenario

with 2,008.98 Ecopoints. The gap between them amount

to 38.9%. Regarding life cycle phases, and taking into

account the duration of each one, in all cases the most

affecting ones are the “planting” (the year zero) and the

“constant production” phase (from the 8th to the 22nd

year), imputable to “minerals”, “land use” and “carcino-

gens” categories because of the use of fertilizers, pesti-

cides and machines.

EDIP methodology (Figure 3), that includes global

warming assessment, has shown that the best performing

scenario is “OG” with 106.71 Ecopoints, and the worst

one is “CE” scenario with 140.63 Ecopoints; the gap

between them amount to 31.8%. These impacts are im-

putable to the following categories, ranked from the most

impacting: “Radioactive waste”, “Aquatic eutrophication

EP(N)”, “Aquatic eutrophication EP(P)”, “Human toxic-

ity water”, “Human toxicity soil” and “Bulk waste”.

These categories of impacts refer to the use of chemicals

and machines, especially in “planting” and “farming”

(from the 1st to the 3rd year) phases.

The comparison between obtained environmental re-

sults using Eco-indicator 99 and EDIP highlights that

organic cropping system is the best in both cases.

In Figure 3, Global Warming Potential (kg of CO2

equivalents) has been highlighted, showing that “OG”

scenario produces less emissions (24,317.64 kg of CO2

eq.), while “CG” scenario produces more emissions

(28,875.10 kg of CO2 eq.), 18.7% more than the first one.

Concerning the implementation of LCC methodology

to assess economic performances, Figure 4 shows life

cycle discounted costs: “OE” is the best performing sce-

nario, amounting to 80,257.45 Euro, while the worse one

is the “CG” scenario with an amount of 87,476.18 Euro,

a 9% more than the first one. Financial indicators to

analyze profitability of investments, i.e. NPV and the

IRR, have been calculated for each scenario; they have

shown that “CE” scenario is the most economically ad-

vantageous one, with a NPV of 24,274.27 € and an IRR

of 6.6%, followed by “OE”, “CG” and “OG” scenarios

(Figure 4). The difference between “CE” and “OG” sce-

narios amount to 51.5% in terms of IRR and to 76.9% in

terms of NPV.

It is also necessary specifying that these last results

have taken into consideration European subsidies to

farming, without which only investments for the “CE”

scenario would have been profitable.

The relative gaps (in percentage) between each sce-

nario performances are shown in Graphic 4, allowing a

visualization of both environmental and economical re-

sults. A percentage of 100% has been given to the best

performing scenario, or rather, the most sustainable

among the others.

Greater performance differences between scenarios are

evident, above all, in Eco-indicator 99, in NPV and IRR

values. “CG” and “CE” scenarios are nearly always the

worst performing: this occurs in terms of environmental

damages for all indicators and in terms of discounted

costs.

110.35 106.71

140.63 140.25

25,152.99 24,317.64

28,579.7428,875.10

0.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

100

120

140

160

OE OGCECG

kg C O

Global warming 100a

Resources (all)

Radioactive waste

Bulk waste

Slags/ashes

Hazardous waste

Ecotox icity soil chronic

Ecotoxicity water acu t e

Ecotoxicity water chronic

Human toxicity soil

Human toxicity water

Human toxicity air

Aquatic eutrophication EP(P)

Aquatic eutrophication EP(N)

Terrestrial eutrop hication

Acidification

Ozone form ati on (Human)

Ozone form ati on (Vegetat ion)

Ozone depletion

Global warming 100a Value

Figure 3. LCA results - EDIP 2003 Single score per impacts categories (Pt) and GWP100a Values (kg of CO2 eq).

A. Strano et al. / Agricultural Sciences 4 (2013) 12-2 0

Concerning NPV and IRR values, there is a great dif-

ference between the best performing scenario, “CE”, and

the others, with a relative gap between the best and the

worst (“OG”) of about a 76.9% in terms of NPV, and

about a 51.5% in terms of IRR.

In spite of the impossibility of an integrated assess-

ment, comparisons in terms of “percentage distance” of

each scenario from the best one (Figure 5) have high-

lighted some valuable information.

LCA results indicate organic growing systems (“OE”

and “OG”) as those best performing in environmental

terms, with very few differences on gaps’ averages. LCC

results have shown that the espalier training systems are

the most economically viable, with a difference between

gaps’ averages of 24.37 percentage points (p.p.) between

“CE” (the best in terms of average results’ LCC) and

“OE” s cenario.

Concluding, on average, “OE” scenario is the most

environmentally performing and the “CE” is the most

economically viable; differences between their average

performance values are similar, corresponding to 21.31

p.p. in terms of environmental performances, and 24.37

p.p. in terms of economic ones.

Results did not allow to assert which is the best sus-

tainable scenario in absolute, because further analysis

should be necessary in order to assess trade-offs between

all concerns, considering also social ones. However,

LCA and LCC methodologies are useful tools for deci-

sion making, as they can help deciders (farmers, politi-

cians and consumers) to understand what they are

choosing within their actions, how to identify hot points

of their operation phases and where interventions on

processes are necessary.

12,833.00

5,605.35

24,274.27

9,294.51

80,257.45 83,737.91 81,423.97

87,476.18

4,60 %3,20 %6,60 %4,00% 0

100

0.00

10,000.00

20,000.00

30,000.00

40,000.00

50,000.00

60,000.00

70,000.00

80,000.00

90,000.00

100,000.00

OE OG CECG

r (%)

€

NPV

Discounted C ost s

IRR

Figure 4. LCC results - NPV and Discounted Costs (€); IRR (%).



100



Eco



indicato



EDIP



2003



Globa



arming 100aDiscounte

costs

PV IR



LCA



LCC

p.p.

Figure 5. Comparison of gaps between scenarios.

A. Strano et al. / Agricultural Sciences 4 (2013) 12-2 0 19

This deepened knowledge about the consequences of

human activities permits to fo cus possible improvements

on sustainability performances, reducing impacts on the

environment and make farming more economically vi-

able.

5. ACKNOWLEDGEMENTS

This work is a part of the “Agreement Framework Program” - Action

3 “Caparra & Siciliani” Research Project ca rried out by the Depart ment

of AGRARIA (Mediterranean University of Reggio Calabria) and sup-

ported by the Regional Authority of Calabria (Italy).

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