In other words, we estimate that about one third, and potentially the entirety, of emission savings resulting from smartphone reuse could be lost due to the rebound effect.
Our results thus suggest that there are grounds to challenge the premise that CE strategies, and reuse in particular, always reduce environmental burdens. The circular economy CE aims to minimize resource use and emissions by slowing, closing, and narrowing material and energy flow loops Bocken et al. Key CE strategies include green design, remanufacturing, recycling, and reuse Geissdoerfer et al. While some evidence supports the environmental benefits of the CE Ghisellini et al. These include the physical and economic limits of recycling activities Reck and Graedel, ; Allwood, the environmental desirability of reused products Gutowski et al.
Rebound effects commonly relate to behavioral and systemic responses to technical change, such as the increased energy demand in response to energy efficiency improvements Jevons, ; Khazzoom, ; Brookes, More broadly, rebound effects can be associated with changes in environmental efficiency, such as less resource inputs for delivering a given function Font Vivanco et al. Regarding re-spending effects, CE strategies, such as recycling and reuse, can lower the costs of products, parts or materials.
For example, prices of used goods e. This is true across product categories, and holds even in cases where the used units are functionally equivalent to the new ones e. Much like any other economic saving, lower expenditure means that consumers increase their effective income and thus have additional spending power. CE strategies can also lead to imperfect substitution when these do not avoid demand and production of new product units on a basis. For example, while it appears that firms and governments believe that sales of used products cannibalize sales of new ones, research suggests that such displacement is likely limited Thomas, ; Guide and Li, ; Frota Neto et al.
As a result, the production of new units is only partly displaced by CE products and thus the overall production increases Thomas, ; Ghose et al. In fact, some studies suggest that reuse may stimulate new production, for example by allowing consumers to sell their older products and use the earnings toward the purchase of new units Waldman, ; Cooper and Gutowski, While such surplus consumption might have social benefits Ovchinnikov et al.
While theoretical and empirical research on rebound effects is extensive, only few studies have specifically examined CE-related rebound. Scheepens et al. Zink and Geyer focused on CE-related rebound effects, and stressed the importance of economic effects, such as re-spending and substitution effects, in shaping the outcome of CE strategies. The authors suggested that, while increasing the circularity of economic flows might displace some primary production, CE strategies will most likely result in increased overall production.
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Similarly, Ovchinnikov et al. While these and other studies, such as those from Korhonen et al.
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In some cases, limitations in method design hamper capturing such effects, for instance when assuming constant GDP and substitution Cooper and Gutowski, , or when the life cycle environmental consequences are ignored Font Vivanco and van der Voet, There is thus a need to holistically assess whether, and to what extent, rebound effects undermine the environmental performance of CE strategies. In this paper, we aim to address this gap by quantifying rebound effects related to product reuse. We use the case of reused smartphones sold through second-hand markets in the United States.
According to the Ellen MacArthur Foundation , reuse that involves little repair, remanufacturing or alteration of products represents one of the most environmentally beneficial paths of the CE. Reuse is indeed a key CE strategy Bocken et al. While the environmental benefits from reuse have been widely praised, such benefits have also been put into question Gutowski et al. For one, reusing products might limit the ability to benefit from technological improvements incorporated into newer models e.
On the other hand, it remains unclear to what extent pre-owned products e. Past work suggests that consumers tend to view pre-owned products as inferior compared to their new counterparts, and may even feel strong aversion and disgust toward them Abbey et al. While some consumers would not consider a pre-owned product at any discount rate, others are more indifferent between new and pre-owned products and would consider switching from one to the other for an appropriate discount Guide and Li, ; Abbey et al. Indeed, past work demonstrates that willingness to pay WTP for pre-owned products is typically lower than that of new identical products, with the discount magnitude varying based on product condition.
Abbey et al. Thus, consumers who are open to purchasing second-hand goods balance out cost savings i. Such cost saving could however lead to re-spending rebound effects. Addressing reuse rebound effects is critical for assessing the full environmental benefits of reuse and CE strategies in general Zink and Geyer, In this paper, we examine some of the unintended environmental consequences of the CE by quantifying rebound effects from both imperfect substitution and re-spending effects arising from direct market reuse of smartphones i.
We use official life cycle assessment LCA reports as a basis for comparative environmental assessment. We then use data for over 6, sales of used Apple smartphones on eBay. The associated re-spending rebound effects are then calculated using a household demand model and environmentally-extended input output analysis.
We then combine these results with survey data on the degree of substitution between new and used smartphones to calculate the effects of imperfect substitution. The results are presented in terms of life-cycle greenhouse gas emissions GHG or carbon footprint, a widespread indicator of environmental sustainability which is highly correlated with other indicators such as ecological and material footprints Simas et al. We first describe in section Case Study, Data Collection, and Modeling Assumptions the case study, modeling assumptions, and the data sources for the LCA and price data.
Following, section Environmental Rebound Effect presents the method to calculate the rebound effect from reusing smartphones. The case study examines the environmental implications of smartphone reuse in the US. Specifically, we focus exclusively on Apple smartphones since it is the only major manufacturer to publish official LCA reports for specific models e.
Apple presents results in terms of absolute GHG emissions for a specific model and capacity, including a breakdown of relative contribution attributed to each life cycle stage, namely extraction, production, use, transport, end of life EoL, assumed to be recycling.
Apple does not, however, fully disclose its assumptions, life cycle inventory data, nor information on the environmental impact methods used to estimated GHG emissions. To allow for substitution between used and new devices, we limit our analysis to four iPhone models that were available for sale directly from the manufacturer during the time of data collection, namely the iPhone 6, iPhone 6 Plus, iPhone 6s, and iPhone 6s Plus models. Retail price data for the four iPhone models corresponds to official Apple prices at the time of product launch www.
Price data for used units of the same models was collected directly from the eBay website www. Listings that offered more than one smartphone for sale, or those that described items as broken, in need of repair, and the like were excluded, leaving 6, units for analysis. To quantify the life cycle GHG emissions associated with each model, both new and used, we applied the following assumptions in accordance with the ISO standard.
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First, in accordance with Apple's LCA reports, we assume that an iPhone's overall lifespan is 36 months. Second, for our comparison, we define the functional unit as owning and using a specific iPhone model for 12 months. Fourth, the alternative to a given used model corresponds to its new counterpart in the case of perfect substitution, and a mix of alternatives based on a consumer survey in the case of imperfect substitution see section Imperfect Substitution Effect. Following the mainstream approach, we assume that demand for new product is the main driver for primary production.
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Under this prism, reuse merely extends the product's use phase, yet does not affect any of the other lifecycle stages, since these would have accrued anyway Zink et al. Hence, we assume that primary production, transport, and EoL of each phone is associated with its first use i.
The ERE is a broader interpretation of the traditional rebound effect, which allows consideration of multiple environmental pressures, the life cycle of products, and broader changes in environmental efficiency Font Vivanco and van der Voet, The ERE concept is more appropriate for our case study because 1 the reuse of smartphones goes beyond a simple technical change in the ratio between inputs e. Where PS are the potential environmental savings in our case, expressed as CO 2 -equivalent [CO 2 e] emissions without considering systemic and behavioral responses e. The ERE can thus be understood as the percentage of potential environmental savings that are offset.
We further assume that the rebound effect emanates only from two independent effects: 1 a re-spending effect associated with the economic savings associated with buying a second-hand smartphone described in section Re-spending Effect , and 2 a substitution effect from the failure of reused smartphones to fully substitute new smartphones described in section Imperfect Substitution Effect. We do not consider other rebound effects, for instance those from changes in socio-psychological costs Santarius and Soland, or macro-economic variables Jenkins et al.
To calculate the re-spending effect, we use a single re-spending model which treats all consumption categories equally Murray, We therefore do not differentiate between the direct additional demand for smartphones and indirect additional demand for other goods and services effects. We further assume a fixed individual income and no long-term savings, so all saved money is spent. Re-spending is approached through marginal budget shares w , or the share of total savings that will be allocated to each consumption category i e. The w are calculated using the linear specification of the Almost Ideal Demand System AIDS , a popular consumer demand model introduced by Deaton and Muellbauer with properties that makes it preferable to competing models Deaton and Muellbauer, ; Chitnis et al.
Using the AIDS model, the w for a given time period can be calculated as. The Stone's price index is defined as. Additionally, and in order to comply with consumer demand theory, three constraints are imposed: adding-up, homogeneity and symmetry Deaton and Muellbauer, From all the reported product categories, 17 were selected for computational ease see Table S1 in Supplementary Material. Once the MBS are calculated, the next step is to determine the life cycle footprint GHG emissions coefficients c emissions per economic unit , so that GHG emissions from re-spending e are calculated as.