The Environmental Gains of Remanufacturing: Evidence from the Computer and Mobile Industry

35 Pages Posted: 2 Jun 2009

See all articles by J. Quariguasi Frota Neto

J. Quariguasi Frota Neto

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM)

Jacqueline M. Bloemhof-Ruwaard

Erasmus University Rotterdam (EUR) - Department of Technology and Operations Management; Erasmus Research Institute of Management (ERIM); Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM)

Date Written: May 11, 2009

Abstract

Remanufacturing has long been perceived as an environmentally-friendly initiative. The question of how remanufacturing moderates the relation between environmental impact and economic returns is still unanswered, however. In this paper, we focus our attention on the electronics industry. In particular, we take a close look at remanufacturing within the mobile and personal computers industries. We analyze whether remanufacturing for such products substantially mitigates the energy used in the life-cycle of these products, or whether as in most electrical equipments, it can only marginally contribute to such reduction. Using both process-based and economic input-output data, we show that remanufacturing significantly reduces total energy consumption. Furthermore, we test the ubiquitous hypothesis that the market of remanufactured products is composed by products that have been downgraded and are therefore sold for prices below the average price of the new equipments. Using data from 9,900 real transactions obtained from eBay, we show that this assumption is true for personal computers, but not for mobiles. More importantly, despite the fact that remanufactured products may suffer downgrading, and that consumers therefore command a high discount for them, the economic output per energy unit used is still higher for remanufactured products. We thus conclude that remanufacturing for these two products is not only environmentally friendly, but also eco-efficient.

Keywords: sustainability, eco-efficiency, remanufacturing, closed-loop supply chains

JEL Classification: M11, R4, M, Q53, O14

Suggested Citation

Quariguasi Frota Neto, J. and Bloemhof-Ruwaard, Jacqueline M., The Environmental Gains of Remanufacturing: Evidence from the Computer and Mobile Industry (May 11, 2009). ERIM Report Series Reference No. ERS-2009-024-LIS. Available at SSRN: https://ssrn.com/abstract=1410467

J. Quariguasi Frota Neto (Contact Author)

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands
+3110 408 1781 (Phone)

Jacqueline M. Bloemhof-Ruwaard

Erasmus University Rotterdam (EUR) - Department of Technology and Operations Management ( email )

RSM Erasmus University
PO Box 1738
3000 DR Rotterdam
Netherlands

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands

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