A Market‐Based Framework for Quantifying Displaced Production from Recycling or Reuse

11 Pages Posted: 25 Aug 2016

See all articles by Trevor Zink

Trevor Zink

Loyola Marymount University - College of Business Administration

Roland Geyer

University of California, Santa Barbara (UCSB) - Donald Bren School of Environmental Science & Management

Richard Startz

UCSB

Date Written: August 2016

Abstract

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.

Keywords: avoided burden, displaced production, industrial ecology, life cycle assessment (LCA), partial equilibrium analysis, recycling

Suggested Citation

Zink, Trevor and Geyer, Roland and Startz, Richard, A Market‐Based Framework for Quantifying Displaced Production from Recycling or Reuse (August 2016). Journal of Industrial Ecology, Vol. 20, Issue 4, pp. 719-729, 2016, Available at SSRN: https://ssrn.com/abstract=2828391 or http://dx.doi.org/10.1111/jiec.12317

Trevor Zink (Contact Author)

Loyola Marymount University - College of Business Administration ( email )

Los Angeles, CA 90045
United States

Roland Geyer

University of California, Santa Barbara (UCSB) - Donald Bren School of Environmental Science & Management ( email )

4670 Physical Sciences North
Santa Barbara, CA 93106-5131
United States

Richard Startz

UCSB ( email )

Department of Economics
University of California
Santa Barbara, CA 93106-9210
United States
805-893-2895 (Phone)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
1
Abstract Views
325
PlumX Metrics