Economic Value as a Unified Metric for Product Circularity

Why It Matters

This approach provides a standardized and economically grounded method for assessing how well a product aligns with circular economy principles. By focusing on economic value, it offers a tangible and potentially more persuasive metric for businesses and stakeholders concerned with both environmental impact and financial viability.

Key Finding

A new metric is proposed to measure product circularity by comparing the economic value that is kept in circulation to the total economic value of the product, using cost data from the supply chain.

Key Findings

• Existing product-level circularity metrics lack standardization, hindering reliable assessment.
• The economic value of product parts offers a theoretically justified basis for aggregating diverse material flows into a single circularity value.
• A metric based on the ratio of recirculated economic value to total product value, estimated via value chain costs, can quantify product circularity.
• Sequential approximation of product parts and activities can protect sensitive financial data and maintain neutrality.

Research Evidence

Aim: How can the economic value of product parts be utilized as a basis for a standardized metric to quantify product-level circularity?

Method: Metric Development and Validation

Procedure: The research involved reviewing existing product-level circularity metrics, identifying theoretical principles for aggregating material flows, proposing a metric based on the economic value of product parts, and outlining a method for calculating this metric using value chain costs and sequential approximations.

Context: Product design and lifecycle assessment within the context of the circular economy.

Design Principle

Quantify circularity through economic value retention.

How to Apply

When designing new products or redesigning existing ones, map out the value chain costs associated with each component and process. Aim to minimize costs related to virgin material acquisition and end-of-life disposal, while maximizing costs associated with repair, refurbishment, and remanufacturing.

Limitations

The accuracy of the metric relies on the availability and accuracy of value chain cost data, which can be complex to obtain and may vary in sensitivity.

Student Guide (IB Design Technology)

Simple Explanation: Think about how much money is tied up in a product's materials and how much of that money can be recovered or reused when the product is no longer new. A higher percentage of recovered money means a more circular product.

Why This Matters: Understanding the economic aspect of circularity helps you make design choices that are not only environmentally sound but also make business sense, which is crucial for real-world product adoption.

Critical Thinking: How might the reliance on economic value as a metric inadvertently favor certain materials or manufacturing processes over others, potentially overlooking other crucial aspects of sustainability?

IA-Ready Paragraph: The proposed metric for product circularity, which quantifies it through the ratio of recirculated economic value to total product value, offers a practical approach for design analysis. By considering value chain costs, this method allows for an assessment of how well a design retains economic value throughout its lifecycle, thereby supporting the principles of a circular economy.

Project Tips

• When evaluating your design, consider the cost of materials and manufacturing. Then, estimate the potential value that could be recovered through recycling, refurbishment, or resale.
• Use this value comparison to justify design decisions that promote longevity, repairability, or recyclability.

How to Use in IA

• You can use this metric as a framework to analyze the circularity of your design concept, comparing it to existing products or alternative design choices.

Examiner Tips

• Demonstrate an understanding of how economic factors influence the feasibility of circular design strategies.

Independent Variable: Value chain costs associated with product parts and activities.

Dependent Variable: Product-level circularity metric (ratio of recirculated economic value to total product value).

Controlled Variables: Product composition, manufacturing processes, end-of-life options.

Strengths

• Provides a unified, economically relevant metric for circularity.
• Offers a practical method for calculation using accessible data (value chain costs).

Critical Questions

• What are the challenges in obtaining accurate and comparable value chain cost data?
• How does this metric account for non-economic aspects of sustainability, such as social impact or biodiversity?

Extended Essay Application

• An Extended Essay could investigate the application of this metric to a specific product category, comparing different design strategies for maximizing circularity.

Source

A Metric for Quantifying Product‐Level Circularity · Journal of Industrial Ecology · 2017 · 10.1111/jiec.12552