ALBERT

Description: Summary Proponents of material recycling typically point to two environmental benefits: disposal (landfill/incinerator) reduction and primary production displacement. However, in this paper we mathematically demonstrate that, without displacement, recycling can delay but not prevent any existing end‐of‐life material from reaching final disposal. The only way to reduce the amount of material ultimately landfilled or incinerated is to produce less in the first place; material that is not made needs not be disposed. Recycling has the potential to reduce the amount of material reaching end of life solely by reducing primary production. Therefore, the “dual benefits” of recycling are in fact one, and the environmental benefit of material recycling rests in its potential to displace primary production. However, displacement of primary production from increased recycling is driven by market forces and is not guaranteed. Improperly assuming all recycled material avoids disposal underestimates the environmental impacts of the product system. We show that the potential magnitude of this error is substantial, though for inert recyclables it is lower than the error introduced by improperly assuming all recycled material displaces primary material production. We argue that life cycle assessment end‐of‐life models need to be updated so as not to overstate the benefits of recycling. Furthermore, scholars and policy makers should focus on finding and implementing ways to increase the displacement potential of recyclable materials rather than focusing on disposal diversion targets.

Description: The so-called circular economy—the concept of closing material loops to preserve products, parts, and materials in the industrial system and extract their maximum utility—has recently started gaining momentum. The idea of substituting lower-impact secondary production for environmentally intensive primary production gives the circular economy a strong intuitive environmental appeal. However, proponents of the circular economy have tended to look at the world purely as an engineering system and have overlooked the economic part of the circular economy . Recent research has started to question the core of the circular economy—namely, whether closing material and product loops does, in fact, prevent primary production. In this article, we argue that circular economy activities can increase overall production, which can partially or fully offset their benefits. Because there is a strong parallel in this respect to energy efficiency rebound, we have termed this effect “circular economy rebound.” Circular economy rebound occurs when circular economy activities, which have lower per-unit-production impacts, also cause increased levels of production, reducing their benefit. We describe the mechanisms that cause circular economy rebound, which include the limited ability of secondary products to substitute for primary products, and price effects. We then offer some potential strategies for avoiding circular economy rebound. However, these strategies are unlikely to be attractive to for-profit firms, so we caution that simply encouraging private firms to find profitable opportunities in the circular economy is likely to cause rebound and lower or eliminate the potential environmental benefits.

Description: The most significant environmental benefit of recycling or reusing a wide range of products and materials is typically the potential to displace primary material production; lack of displacement significantly reduces the environmental benefits of these activities. Because no consensus method to estimate displacement rate has emerged, environmental assessments have tended to assume that displacement occurs on a one-to-one basis. However, displaced production is a complex phenomenon governed primarily by market mechanisms, rather than physical relationships. This article advances the understanding of displacement by presenting a market-based framework describing the displacement relationship and a methodology for quantifying displacement rate based on partial equilibrium modeling. Using this methodology, a general symbolic equation for displacement rate after an increase in recycling is derived. The model highlights the market mechanisms that govern displaced production and identifies five price response parameters that affect displacement rate. Results suggest that one-to-one displacement occurs only under specific parameter restrictions that are unlikely in competitive commodity markets, but zero displacement is possible if secondary materials are poor substitutes for primary materials; displacement is likely to be reduced if secondary materials have inferior technical properties. The presented methodology can be generally applied to any system in which recycled or reused materials are substitutes or complements for primary materials. Implications for improving recycling and reuse efficacy and environmental assessment methodology are discussed, and suggestions are presented for expanding the displacement methodology in future research.

Description: The recycling of material resources lies at the heart of the industrial ecology (IE) metaphor. The very notion of the industrial ecosystem is motivated by the idea that we should learn from natural ecosystems how to “close the loop.” Recycling is not just central to IE, it is part of everyday life. Unfortunately, how the IE community and the public at large think about recycling includes several misconceptions that have the potential to misguide environmental assessments, policies, and actions that deal with recycling and thus undermine its environmental potential. One misconception stems from naïve assumptions regarding recycled material displacing primary production. Two others assert the environmental advantages of recycling material multiple times, or at least in a closed loop. A final misconception is the assumption that the distinction between closed and open recycling loops is generally useful. This article explains why these misconceptions are flawed, discusses the implications, and presents an alternative set of principles to better harness the potential environmental benefits of closing material loops.

Description: Recycling materials from end-of-life products has the potential to create environmental benefit by displacing more harmful primary material production. However, displacement is governed by market forces and is not guaranteed; if full displacement does not occur, the environmental benefits of recycling are reduced or eliminated. Therefore, quantifying the true “displacement rate” caused by recycling is essential to accurately assess environmental benefits and make optimal environmental management decisions. Our 2016 article proposed a market-based methodology to estimate actual displacement rates following an increase in recycling or reuse. The current article demonstrates the operation, utility, and challenges of that methodology in the context of the U.S. aluminum industry. Sensitivity analyses reveal that displacement estimates are sensitive to uncertainty in price elasticities. Results suggest that 100% displacement is unlikely immediately following a sustained supply-driven increase in aluminum recycling and even less likely in the long term. However, zero and even negative displacement are possible. A variant of the model revealed that demand-driven increases in recycling are less likely than supply-driven changes to result in full displacement. However, model limitations exist and challenges arose in the estimation process, the effects of which are discussed. We suggest implications for environmental assessment, present lessons learned from applying the estimation methodology, and highlight the need for further research in the market dynamics of recycling.