As businesses and consumers embrace the circular economy, the promise of reducing waste and preserving resources is becoming a central tenet of sustainable living. However, new research from Copernicus Institute of Sustainable Development, Utrecht University [52.1°N, 5.2°E] reveals that circular business models (CBMs) do not always deliver the environmental benefits they promise. By examining real-world examples, the study sheds light on how consumer behaviour can both enhance and undermine the sustainability of circular consumption.
What Are Circular Business Models?
Circular business models aim to replace the “take-make-waste” approach of linear consumption with systems designed to:
- Extend product lifespans: Through repair, refurbishment, or modular design.
- Encourage reuse and sharing: By facilitating access-based services like rentals and peer-to-peer product sharing.
- Minimise waste: By reducing the need for new production and encouraging resource-efficient practices.
Examples include second-hand clothing platforms, subscription-based car sharing, and modular electronics designed for easy upgrades.
Conservation vs Rebound Effects
The environmental benefits of CBMs depend heavily on consumer behaviour. This study identifies two opposing mechanisms:
- Conservation Effects:
- Demand Displacement: Buying second-hand items instead of new ones directly reduces resource use and emissions.
- Product Lifetime Extension: Repairing or upgrading products delays the need for replacements, cutting waste.
- Reduced Consumption: Pay-per-use models like shared laundry encourage more mindful resource use.
- Rebound Effects:
- Overconsumption: Cheaper or more convenient circular options can lead to buying more than needed.
- Re-spending Savings: Money saved by using circular services is often spent on other high-impact activities, like travel.
- Imperfect Substitution: Circular options replace more sustainable behaviours, like walking instead of driving shared cars.
The Role of Consumer Context
- Motivations Matter: Many consumers are drawn to circular models for convenience or cost savings rather than environmental concerns. This makes rebound effects more likely.
- Cultural and Local Contexts: Adoption varies depending on norms and infrastructure. For instance, car sharing thrives in cities with good public transport but can lead to overuse in car-centric areas.
What Can Be Done?
To unlock the full potential of CBMs, the study suggests:
- Designing for Sufficiency: Models that emphasise moderation and resourcefulness—like modular designs encouraging repair—are more likely to yield conservation effects.
- Addressing Rebound Effects: Businesses and policymakers must account for indirect impacts, such as increased overall consumption.
- Tailoring Strategies to Context: Policies and business practices should align with local norms and infrastructure, promoting truly sustainable behaviours.
A Balanced Perspective
While circular business models hold immense promise, their success hinges on how people engage with them. This research highlights that the circular economy is not inherently sustainable—it requires thoughtful design and user-centric approaches to realise its environmental potential.
By understanding both the opportunities and pitfalls of circular consumption, this study provides a roadmap for smarter, greener systems that truly benefit people and the planet.
Source
Consumer behavior in circular business models: Unveiling conservation and rebound effects, Sustainable Production and Consumption, 2024-12
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