Possible models for a sustainable economy

What are the factors that influence the introduction of a circular economy? How would such a conversion affect the environment and business? And how can you make such predictions – is it even possible? These questions are the focus of a new thesis presented at Linköping University.

Graphic illustration of green economy. A green economy, what could it be like? MrJub

Never ending story

To put it simply, a circular economy is one characterised by circulation in which all resources are used for as long as possible and products are remanufactured instead of being discarded. The opposite of this is a linear economy, which is the most common type we see today. Goods are manufactured, purchased, used and then discarded. It is often believed that it will be necessary to use the circular economy to solve climate change and prevent harm to the environment.

Raphael Wasserbaur.Raphael Wasserbaur.

In his thesis, Simulation Modelling of a Shift to Service-Based Offerings: Resource efficiency and operational implications in the context of the circular economy, Raphael Wasserbaur tries to describe the consequences of such a transition. His description is based on simulations of different possible scenarios and studies of their results.

“One thing I’ve learned is just how complex the circular economy is. It’s extremely diverse and affected by several different factors at different levels, everything from politics and legislation to consumer behaviour and decision-making in companies”, he says.

“It’s difficult and becomes something of a never-ending story to build a model that covers it all. But it’s important to try.”

Long road to profits

The thesis comprises four substudies, one of which compares the renting out of washing machines with their purchase, from a sustainability perspective. It turns out that the use of resources is significantly less when customers rent instead of purchasing washing machines. One of the reasons for this is that the companies refurbish the machines after the rental period and then rent them out again – a form of reuse.

“Another effect that we probably weren’t expecting is that people on low incomes can afford to use the more expensive premium machines, which often have lower energy consumption. Such machines are too expensive for them to buy”, says Raphael Wasserbaur.

Another substudy shows that renting can lead to higher initial costs for companies, even though it is more advantageous from a sustainability perspective in the long term. But it can take a long time – ten years according to calculations in the thesis – before the positive effects take over.

“It is a greater undertaking for a company to rent out a product than to sell it. Actually, the supplier is responsible for the product for its complete life cycle. This may mean, for example, that the demand for service increases substantially. The company can streamline the service it offers and make it more efficient, but this takes time.”

“Is it possible to combine this with the sort of capitalism that requires a profit every quarter? It’s a good question. At the same time, I’m convinced we must see the conversion to a circular economy as a long-term change, and a change in the way people think.”

Pictures of the future

Raphael Wasserbaur has also compared the use of washing machines owned by the individual household with common laundry rooms in which tenants share equipment. The wear on the machines in a laundry room is greater, but even so this system is superior from a sustainability point of view. The simulations in the thesis demonstrate, for example, that emissions of carbon dioxide would fall by 29% in Sweden (and by 35% in the EU) if the use of household-owned washing machines completely ended.

“That may not be realistic, but it does give an idea of the potential”, says Raphael Wasserbaur.

“And the aim of the simulations is not to predict the future, but to draw a conceivable picture of it. This makes them such a powerful tool in research.”

  • This research was supported by the Circular European Economy Innovative Training Network (Circ€uit), funded by the European Commission under the Horizon 2020 Marie Skłodowska Curie Action 2016 (Grant Agreement number 721909) as well as by the Mistra REES (Resource Efficient and Effective Solutions) program (No. 2014/16) funded by Mistra (The Swedish Foundation for Strategic Environmental Research).

Translated by George Farrants

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