144
(S/d) is the product-service intensity; i.e. the quantity of stock required to deliver the
required service.
Equation 7.1 has a number of important implications, underpinning the specific
business strategies explored in Sect. 4. The emission intensity term, (g/e), depends
primarily on the fuel mix used in the extractive, processing and manufacturing operations and the background economies in which they are located. The energy intensity of production, (e/p), which is the usual target of industrial improvement and
innovation, is also obviously important. These terms underlie concerns over the
“carbon leakage” resulting from the potential migration of primary manufacturing
to economies with high carbon intensity and possibly lax environmental standards
(see for example Clift et al. 2013) but the scope for reducing (e/p) is limited by
technological and thermodynamic constraints (Allwood et al. 2012). We therefore
concentrate here on the other terms in Eq. 7.1 which are key for the circular and
performance economies: material intensity, (p/S), and product-service intensity,
(S/d). These parameters are measures of the efficiency and quality of the stock: low
values indicate good system performance. Reducing the product-service intensity
means using capital goods more intensively, for example through “pooled” use of
vehicles or appliances. Material intensity can be reduced by design measures such
as “lightweighting” and, importantly but less obviously, is also dependent on product life, re-use, remanufacturing and recycling.
3.2 Remanufacturing and Reprocessing
To reveal the significance of material and product-service intensities and product
life, we explore the flows needed to maintain the stock of manufactured capital, S,
as shown in Fig. 7.2. The “Re-use” loop (see Fig. 7.1) is treated here as an activity
needed to keep the stock in use; it is therefore not shown in Fig. 7.2 because inputs
to and losses from re-use are included in i S (see below). Of the flow of goods into
stock, p (as in Eqs. 7.1 and 7.2), a fraction r 1 is remanufactured and the balance is
newly manufactured goods incorporating a fraction r 2 of recycled material. The
input of primary material to the product system is therefore (1−r 2 )(1−r 1 )p.
Unsurprisingly, increase in r 1 or r 2 reduces the need for primary material.
More interesting insights emerge from examining other relationships within the
service system, illustrated by Fig. 7.2. The outflow from stock at the end of its (first)
service life is denoted by q. A fraction f 1 is routed to remanufacturing, a fraction f 2
to recycling and the balance leaves the product system as downcycled goods or
materials or as waste. Material losses, degradation and/or contamination in remanufacturing and reprocessing are thermodynamically inevitable and also occur in the
associated logistics, so that r 1 p < f 1 q and r 2 (1−r 1 )p < f 2 q. The relatively high population density in urban areas makes the logistics of collection easier and therefore
supports the development of a circular economy (see, for example van Berkel et al.
2009; Kennedy et al. 2011). The main losses and degradation usually occur in
W.R. Stahel and R. Clift
(S/d) is the product-service intensity; i.e. the quantity of stock required to deliver the
required service.
Equation 7.1 has a number of important implications, underpinning the specific
business strategies explored in Sect. 4. The emission intensity term, (g/e), depends
primarily on the fuel mix used in the extractive, processing and manufacturing operations and the background economies in which they are located. The energy intensity of production, (e/p), which is the usual target of industrial improvement and
innovation, is also obviously important. These terms underlie concerns over the
“carbon leakage” resulting from the potential migration of primary manufacturing
to economies with high carbon intensity and possibly lax environmental standards
(see for example Clift et al. 2013) but the scope for reducing (e/p) is limited by
technological and thermodynamic constraints (Allwood et al. 2012). We therefore
concentrate here on the other terms in Eq. 7.1 which are key for the circular and
performance economies: material intensity, (p/S), and product-service intensity,
(S/d). These parameters are measures of the efficiency and quality of the stock: low
values indicate good system performance. Reducing the product-service intensity
means using capital goods more intensively, for example through “pooled” use of
vehicles or appliances. Material intensity can be reduced by design measures such
as “lightweighting” and, importantly but less obviously, is also dependent on product life, re-use, remanufacturing and recycling.
3.2 Remanufacturing and Reprocessing
To reveal the significance of material and product-service intensities and product
life, we explore the flows needed to maintain the stock of manufactured capital, S,
as shown in Fig. 7.2. The “Re-use” loop (see Fig. 7.1) is treated here as an activity
needed to keep the stock in use; it is therefore not shown in Fig. 7.2 because inputs
to and losses from re-use are included in i S (see below). Of the flow of goods into
stock, p (as in Eqs. 7.1 and 7.2), a fraction r 1 is remanufactured and the balance is
newly manufactured goods incorporating a fraction r 2 of recycled material. The
input of primary material to the product system is therefore (1−r 2 )(1−r 1 )p.
Unsurprisingly, increase in r 1 or r 2 reduces the need for primary material.
More interesting insights emerge from examining other relationships within the
service system, illustrated by Fig. 7.2. The outflow from stock at the end of its (first)
service life is denoted by q. A fraction f 1 is routed to remanufacturing, a fraction f 2
to recycling and the balance leaves the product system as downcycled goods or
materials or as waste. Material losses, degradation and/or contamination in remanufacturing and reprocessing are thermodynamically inevitable and also occur in the
associated logistics, so that r 1 p < f 1 q and r 2 (1−r 1 )p < f 2 q. The relatively high population density in urban areas makes the logistics of collection easier and therefore
supports the development of a circular economy (see, for example van Berkel et al.
2009; Kennedy et al. 2011). The main losses and degradation usually occur in
W.R. Stahel and R. Clift