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Achieving Household Waste Prevention Through Product Service Systems - WR0106

Description
The aim of this research is to identify instances where conventional material products can be substituted by Product Service Systems (PSS) to satisfy various aspects of household demand using fewer resources and make a significant contribution to household waste prevention. Research shows that significant improvements in resource productivity can be gained from such substitutions and consequently that these have great potential to reduce the amount of municipal solid waste (MSW) going to landfill and to contribute toward measures to arrest growth in this. The project considers various aspects of household demand, the manner in which this is met by producers and therefore seeks to explore and address the root causes of household waste.

Accordingly, the project will focus on PSS which are the subject of a growing literature concerning services and sustainability. A range of these have been developed by firms as a result of competitive pressures but are understood to hold great potential to satisfy demand using fewer resources and give rise to less household waste. However, it has been recognised that these environmental benefits will not arise as the result of competitive pressures and that government led interventions and policy is required to realise these. Also, previous studies show that where PSS have been purposively designed to realise the environmental benefits of this approach, a range of social and economic barriers on both supply and demand sides, particularly within households, inhibit the uptake of these and policy is required to overcome these. The project will address both of these important issues.

An analytical framework will be developed to facilitate an integrated environmental economic assessment. This will include economic, social and environmental performance criteria against which the relative performance of conventional products and PSS to satisfy various aspects of household demand will be evaluated. Critically, this will enable the economic and social barriers to the uptake of PSS which have been designed deliberately to improve environmental performance to be identified. A suite of indicators will be developed from this which will enable key stakeholders such as firms, householders and policy makers to evaluate the economic, environmental and social performance of PSS and critically, when such substitutions are possible and desirable. The project will identify a number of effective policy instruments. These will seek to perpetuate current market trends to provide services but to ensure that the environmental benefits of this approach are realised and importantly, that the social and economic barriers to the uptake of environmentally friendly PSS are overcome.

The project makes a significant contribution to programme area 1.3 of the Waste and Resources R&D Strategy (Defra, 2004). It investigates the use of PSS which is both a supply and demand side measure. Outputs include an analytical framework, a suite of indicators as well as a package of policy measures. It therefore informs development of future policy and legislation. It contributes to area 5.1 as it seeks to identify opportunities to promote consumption without ownership, which in this instance is pro-environmental behaviour. It also seeks to decouple resource use from monetary flows through the provision of services and therefore contributes to area 7.2 as well as UK policies to promote sustainable patterns of production and consumption as described in the policy document entitled Changing Patterns: UK Government Framework for Sustainable Consumption and Production (Defra, 2003). As the ownership rights associated with the material element of PSS often remain with the producer, this approach holds great potential to stimulate extended producer responsibility, it therefore contributes to area 2.2. Indicators to measure waste from services will be developed in the project and it therefore contributes to area 8.3. It is therefore consistent with many of the key themes of the Waste and Resources R&D Strategy (Defra, 2004).

In addition, it will also contribute to UK Government policies to create Sustainable Communities as encapsulated in the policy document entitled Sustainable Communities: People, Places and Prosperity (ODPM, 2005). The project consortia includes a major house builder (Taylorwoodrow) which hopes to investigate potential of service orientated products to attain more sustainable resources use and achieve household waste prevention within their new developments as part of work to attain sustainable communities.
The project will benefit a variety of stakeholders. Policy makers will benefit from the recommendations for a policy framework to stimulate change toward satisfying demand through services. Firms will benefit as new market opportunities to develop environmentally friendly services will be identified and methodologies to help them realise these. Wider society will benefit as the project should result in reduced MSW going to landfill and consequent reductions in environmental degradation.

The overall aim of the project is to identify instances where material products can be substituted by services which satisfy aspects of household demand using fewer resources and consequently give rise to less household waste. Research (Mont, 2002; Manzini et al, 2003) shows that a range of service ‘types’ described as Product Service Systems (PSS) hold great potential to achieve such desirable reductions. These comprise a tangible artefact and intangible service which are combined through business process to satisfy demand. For example, an industrial washing machine could be used in conjunction with collection and delivery services to provide a washing service to households. Significant environmental benefits may flow from this as one washing machine is used to serve many customers and a longer lasting industrial product (capital item as opposed to consumer durable) is used to support the process. A range of these services have been developed by firms, mainly as a response to competitive pressures, e.g. the need to gain additional financial value. Such products have been found in both business to business and business to consumer markets. Products which have arisen as a result of this new approach include: voicemail, document handling services, chemical management services, washing services, mobility services. A taxonomy of PSS (White el al, 1999) has been developed within the literature to describe the variety of service approaches which have emerged:

· Product Orientated PSS - ownership rights of the material artefact transfer to the customer and a service arrangement is provided to ‘ensure the utility’ of the artefact over a given period of time. Typical examples include extended warranties and maintenance contracts.

· Use Orientated PSS - ownership rights remain with the producer and the customer purchases use of the product over a given period of time. Rentals and leasing are typical arrangements distinguished by temporal issues.

· Result Orientated PSS - the customer purchases utility, an outcome. In contrast to the above, instead of leasing a washing machine, the customer purchases clean clothes delivered through a washing service. Ownership of material artefacts are retained by the producer.

Research (Halme et al, 2005) shows that PSS hold the great potential to improve environmental performance and arise from the following:

· if the material artefact remains in the ownership of the producer, there is a financial incentive to produce more durable goods and the producer has responsibility for disposal.

· this approach deepens intensity of use and increases the probability of a higher service yield before the product becomes outdated due to technological characteristics.

· producers use their competencies to ensure the correct use of material artefacts which are used to provide service as well as to select the appropriate artefact for this purpose.

In this arrangement producers gain an economic interest in increasing the durability and reliability of the tangible artefacts which support PSS and a stock of material is created and constantly reconfigured through service innovation to satisfy customer demands as they arise. The role of consumer durables in satisfying demand diminishes and a stock of capital items is created. For example, a firm which currently produces answerphones may use their competencies to develop voicemail equipment and enter into an alliance with a voicemail service provider.

The improvements in resource productivity which might be gained from this alignment of environmental and economic objectives are potentially enormous – between factor 10 and 20 (Brezet, 1997). These products hold great potential to satisfy demand using significantly less resources and give rise to less waste. Use of these in business to consumer markets therefore, holds great potential to reduce household waste. However, while products of this nature are emerging in certain markets, the environmental benefits of these are unlikely to arise automatically, as a result of competitive pressures and economic re-structuring (Mont, 2002; Cook et al, 2002). There are several reasons for this (Cook, 2004), which include:

· Instead of developing a stock of capital items, firms might develop a range of disposable products to support their PSS.

· While prolific in business to business markets, a range of social and economic factors prevent the uptake of PSS within consumer markets

· Firms have generally developed these new services in response to competitive pressures and may simply be unaware that significant improvements in environmental performance can be gained from this approach or have the knowledge or expertise to realise these

· While the PSS approach and the environmental benefits which can be gained from this are known within certain academic and policy communities, these are not known within industry or consumer circles.

The aim of this research is to identify instances where various aspects of household demand can be satisfied by PSS . In these instances conventional material products will be substituted by PSS which will satisfy demand using fewer resources and give rise to less household waste. It will develop a robust body of knowledge which will enable policy to be formulated which will ensure that the environmental benefits of these substitutions are realised and that social and economic barriers to the uptake of this new service type are overcome. A package of policy instruments will be identified. A suite of indicators will be developed from this which will enable key stakeholders such as firms, householders and policy makers to evaluate the economic, environmental and social performance of PSS and critically, when such substitutions are possible and desirable. These will form the basis of a decision support tool for policy makers, households and firms.

The project builds on existing research concerned with services and sustainability and focuses on PSS which have great potential for improvements in resource productivity. While case study research has been completed on PSS, as with any research, the results are limited and not sufficiently robust to inform the development of UK policy to promote the use and diffusion of these. Several limitations are of concern.

Firstly, the research (e.g. White et al, 1999; Bartelomeo, 2003) has been largely confined to a small number of cases where PSS have been used to satisfy demand in European and American markets (Tukker, 2002; Wong, 2004). These have focused on chemical management and document handling services in business to business markets and washing and mobility services in business to consumer. The results of this are not sufficiently generalizable to provide a foundation of knowledge for the development of UK policy.

Secondly, little research (Meijkamp, 1999; Van den Hoed, 1997) has been undertaken to systematically identify and quantify the environmental benefits of PSS as substitutes for traditional products and more specifically, the potential of these to achieve household waste prevention .

Thirdly, while research (e.g. Mont, 2002; Cook et al, 2002) shows that a range of economic and social factors prevent uptake and diffusion of PSS, these are poorly understood and UK specific work has not been undertaken. Notable exceptions include the EPSRC funded SOLiD project which was conducted by Cranfield University, and the work of the Policy Studies Institute which was funded by the UK Department for Trade and Industry. While these considered a range of PSS which had emerged in business to business markets and provided tools to help firms to develop environmentally friendly PSS for these markets, specific insights related to PSS in households and business to consumer markets were not attained.

Fourthly, while a number of policy recommendations (e.g. Cook, 2004; Mont et al 2003) have been developed in the literature, there have been no attempts to develop policy which promotes the use and diffusion of PSS in the UK to achieve household waste prevention.

This project will address these concerns and provide a robust foundation of knowledge for policy development, it will:

1. systematically evaluate and quantify the environmental benefits (potential to satisfy demand using fewer resources, achieve household waste prevention) that substitution of traditional products for PSS provides

2. systematically analyse the social and economic barriers on both supply and demand sides to the development and adoption of these.

3. develop effective policy which promotes PSS which are environmentally beneficial and overcomes barriers on supply and demand sides.

The study will draw upon theory and constructs which have been developed in well established literatures concerning product and technology development, sociology, evolutionary and institutional economics. These imply that there is a need to think widely about the determinants of technology and product choice. While price will be a key determinant on both supply and demand sides, a range of additional criteria need to be taken into account, social, institutional, cultural, symbolic interpretative. The project will respond to this need by using multi criteria analysis to identify the criteria which determine product choice.
Objective
In pursuit of the study aim there are seven main objectives:

1. To identify market instances in which services have been used or are currently used to satisfy household demand.

This provides a platform of empirical data for the rest of the research. It is essential in achieving the overall aim as required to develop robust suite of indicators that are grounded in what is known in substantive as well as theoretical literatures. It provides platform of knowledge for preliminary development of criteria.

2. To identify those instances where PSS can be deployed to achieve household waste prevention – in which PSS will satisfy demand using fewer resources and give rise to less waste that traditional material based products.

The nature and scale of household demand for traditional products will be considered. Key aspects of this which use many resources and give rise to much household waste, or waste which is highly polluting such as waste electrical and electronic equipment (WEEE) will be identified. Opportunities to address these problems through substitution of PSS for traditional products will be identified. Environmental criteria established.
3. To identify barriers to the deployment of PSS in both household and firm sectors.

The social and economic criteria which stimulate and/ or constrain firms and households from respectively supplying and demanding PSS as substitutes for traditional products will be identified. Previous studies show that there are considerable barriers to use of such approaches within households. The research will identify these and policies and institutional innovations to overcome these.

4. To identify a range of indicators which will enable key stakeholders to evaluate the environmental, social and economic performance of resultant PSS

While PSS hold potential to improve environmental performance and reduce household waste (particularly WEEE), these benefits are unlikely to arise automatically. Research has shown that services may merely lead to portals through which firms satisfy demand with disposable products. It is necessary to identify instances in which result orientated services can be used to satisfy demand but also where these improve environmental performance. This is an essential component of the project. Indicators will be developed to enable key stakeholders such as policy makers, householders and managers of firms to identify such instances and to develop associated policy.

5. To study the strengths and weaknesses of the indicators and assess their general applicability

The suite of indicators will be developed from robust data. The strengths and weaknesses of these will be identified through research to develop policy. Subsequent necessary refinements will be made to the indicators to ensure utility and general applicability.

6. To identify policy instruments which will stimulate the use of PSS to achieve household waste prevention

A regulatory review will be completed to identify effective policy instruments and institutional innovations which will overcome barriers to substitution of PSS within households and promote the use of these. This will be essential as research shows that policy is need to stimulate and realise the environmental benefits of such substitutions. The factors that might hinder or promote development of policy instruments to stimulate use of PSS which achieve household waste prevention will be of particular concern here.

7. To produce case studies which illustrate the use of PSS to improve household waste prevention

A number of case studies will be completed during the research. These will illustrate how PSS can be used to achieve household waste prevention. These will be made available to householders, firms and policy makers to promote this approach. They will be written in manner which meets the needs of these stakeholder groups.
Project Documents
• Final Report : WR0106 "Achieving Household Waste Prevention Through Product Service Systems" - Final Report   (153k)
• Other : WR0106 "Demand Side Analytical Framework" - Annex to Technical Report 1   (35k)
• Other : WR0106 "Supply Side Analytical Framework" - Annex to Technical Report 1   (27k)
• Technical Report : WR0106 "Developing an Analytical Framework" - Technical Report 1   (3077k)
• Technical Report : WR0106 "Developing Experimental Product Service Systems" - Technical Report 2   (2211k)
• Technical Report : WR0106 "Developing Performance Indicators" - Technical Report 6   (2854k)
• Technical Report : WR0106 "Environmental Assessment" - Technical Report 3   (3229k)
• Technical Report : WR0106 "Institutional and Policy Review" - Technical Report 5   (851k)
• Technical Report : WR0106 "Prospective Case Studies" - Technical Report 7   (2974k)
• Technical Report : WR0106 "Social and Economic Assessment" - Technical Report 4   (6053k)
Time-Scale and Cost
From: 2005

To: 2009

Cost: £191,796
Contractor / Funded Organisations
University - Cranfield
Keywords
Analysis              
Behaviour change              
Consumer              
Development of tools - facilitate behaviour change              
Economic Research              
Encourage change in resource use/waste generation              
Environmental Protection              
Household              
Indicators              
Policy Development              
Products and Processes              
Services              
Social Research              
Sustainable Consumption and Production              
Sustainable Resource Consumption and Management              
Techniques & methodolgies for waste management              
Understand/enhance pro-environmental behaviour              
Waste              
Waste Management              
Fields of Study
Waste Management