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Energy implications of product leasing
Koji Intlekofer1, Bert Bras, Mark Ferguson
1School of Mechanical Engineering, Georgia Institute of Technology, Suite E, 800 West Peachtree Street N.W., Atlanta, Georgia 30308, USA. kintlekofer@gatech.edu
Environmental Science & Technology
|May 18, 2010
Summary
Product leasing can be greener by internalizing waste costs and promoting recycling. However, its environmental benefits depend on the product category, favoring those with high use impacts and evolving technology.
Area of Science:
- Environmental Science
- Industrial Ecology
- Sustainable Business Models
Background:
- Leasing is increasingly promoted as an environmentally preferable alternative to product sales.
- This perspective suggests leasing internalizes waste and disposal costs for Original Equipment Manufacturers (OEMs).
- Leasing may foster closed-loop systems, remanufacturing, recycling, and potentially shorter product lifecycles.
Purpose of the Study:
- To quantitatively evaluate the environmental claims associated with product leasing versus selling.
- To analyze the impact of product lifespan on energy consumption in different industries.
- To determine how leasing influences product usage lifespan compared to traditional sales.
Main Methods:
- Case studies were conducted for the household appliance and computer industries.
- Life cycle optimization techniques were applied to assess energy usage.
- Scenario analysis was used to model the effects of varying product life spans.
Main Results:
- Products with significant use-phase environmental impacts and rapidly advancing technology benefit from shorter lifecycles facilitated by leasing.
- Products with high manufacturing impacts and stable technology do not show similar environmental advantages from leasing.
- Leasing's environmental effectiveness is contingent on product-specific characteristics and technological evolution.
Conclusions:
- Product leasing offers environmental benefits primarily for high-use impact products with improving technology, through optimized, shorter lifecycles.
- For products dominated by manufacturing impacts and lacking technological advancement, leasing does not inherently provide a greener outcome.
- The study underscores the need for nuanced environmental assessments of leasing models based on product type and lifecycle stage.
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