From Material Flows to Cash Flows - An Extension to Traditional Material Flow Modelling

The balance between economy and ecology is an ideal situation often repeated in political discussion as well as in the strategic planning of a company, but in fact, in most decision making situations we still miss tools which could offer information both about environmental and economic impacts of the possible outcomes. Material flow models have typically not addressed the economic or social aspects of the system. Recently several bodies engaged in the development of these tools have, however, made recommendations about including economic and social variables in the abovementioned models. The purpose of this study has been to discuss the applicability of material flow models in economic decision making and to increase understanding about the possibilities of combining economic data with material flows. The study is exploratory research and the research methods applied are secondary data analysis and case analysis. Both deductive and inductive theory formulation has been used: deductive within secondary data analysis and inductive in connection with the case studies. Material flow models have proved to be a powerful tool for environmental decision making and they also offer a suitable basis for economic evaluation and decision making. The most important advantages of combining economic variables into material flow models include the communicative value of monetary terms to the decision maker as well as the basic quantitative data offered by material flow models about the system, its logistics and flows, which in most cases is directly useful for economic calculations.

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