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Identifying rebound effects in product-service systems: actors, mechanisms, triggers and drivers

Daniel Guzzo
Daniel Guzzo

Paper title: Identifying rebound effects in product-service systems: actors, mechanisms, triggers and drivers Authors: Daniel Guzzo, Daniela C.A. Pigosso Abstract: The implementation of product-service systems (PSS) is prone to the occurrence of rebound effects (RE). This research aims to systematically identify the rebound mechanisms in a PSS context. Through the case study of a use-oriented PSS offer, we showcase a structured way to address RE that led to a comprehensive mapping of 23 mechanisms. The analysis demonstrates an approach to mapping rebound triggers, drivers, and mechanisms within the actors realms that designers can apply to ensure the potential sustainability gains of PSS offers. DESIGN 2024 Conference presentation

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1 Identifying rebound effects in Product-Service Systems: Actors, Mechanisms, Triggers and Drivers 鐃 Guzzo, D.; Pigosso, D. Daniel Guzzo Assistant Professor / Researcher Section of Design for Sustainability DTU Construct Technical University of Denmark
Why addressing RE in PSS design? 2 There is growing empirical evidence of Rebound Effects (RE) offsetting the potential sustainability gains of Product-Service Systems (PSS) Johnson and Plepys (2021); Warmington-Lundstr旦m and Laurenti (2020), Allais and Gobert (2016) Approaches to investigate RE in PSS design are emerging Kjaer et al. (2018), Kjaer et al. (2019), Alfarisi et al. (2022), Sarancic et al. (2023) Gap Nevertheless, we still do not understand the reasons for RE occurrence within a PSS context. Goal Systematically identify the causal elements leading to RE in a PSS context
On rebound effects and mechanisms 3 Rebound effects (RE) The offset in performance caused by systemic responses to sustainability-oriented interventions Hertwich (2005); Lange et al. (2021) Rebound mechanisms Feedback structures that causally explain why and how RE occur. Guzzo et al. (2024) REBOUND EFFECTS magnitude
4 Sustainability-oriented intervention Resource consumption Sustainability impacts Rebound triggers Consumption/ production Rebound drivers Controls Releases Stimulates Results in additional Regulates Leads to On rebound mechanisms Feedback structures that causally explain why and how RE occur. Guzzo et al. (2024) Rebound mechanism
5 Product-service system Resource consumption Sustainability impacts Budget for consumption Consumption Satiation Controls Releases Stimulates Results in additional Leads to On rebound mechanisms (PSS ex.) Feedback structures that causally explain why and how RE occur. Guzzo et al. (2024)
Research methodology 6 Guiding research question: How to systematically identify rebound mechanisms of PSS?
Research methodology 7 Research Step 3 Identification of potential rebound mechanisms Research Step 1 System mapping Research Step 2 Identification of rebound triggers Guiding research question: How to systematically identify rebound mechanisms of PSS?
Research methodology 8 Guiding research question: How to systematically identify rebound mechanisms of PSS? Research Input 1 Case description Research Step 1 System mapping Research Output 1 System map of the PSS configuration Document analysis (Yin, 2009) of a use-oriented PSS case of washing machine as a service (Bundles) using three sources for case description. Ref1. Circle Economy Knowledge Hub Ref2. Ellen MacArthur Foundation cases Ref3. Bundles website
Research methodology 9 Guiding research question: How to systematically identify rebound mechanisms of PSS? Research Input 1 Case description Research Step 1 System mapping Research Output 1 System map of the PSS configuration Development of a system map (following Vezzoli et al. (2014)), to visualise the actors, components, and interaction flows of the PSS offer.
System map: washing machine as a service 10 A4. Manufacturer A2. PSS provider A1. Household A3. Real estate company High-end washing machine (C1), with monitoring device 1. Offers, installs and maintains (A) 1. Provides washing machine in the rental agreement (B) 2. Informs costs and consumption patterns (A/B) 3. Pays to use: pay-per-period + pay-per-use (A/B) 1. Offers, installs and maintains (B) 0. Sells (A/B) Material flow Information flow Financial flow Legend Offer A Offer B Offer boundary Ownership Offer A/B
Research methodology 11 Research Input 1 Case description Research Step 1 System mapping Research Output 1 System map of the PSS configuration Guiding research question: How to systematically identify rebound mechanisms of PSS?
Research methodology 12 Research Input 2 Set of rebound triggers and drivers Research Step 2 Identification of rebound triggers Research Output 2 List of rebound triggers activated by actors Guiding research question: How to systematically identify rebound mechanisms of PSS? Classes of triggers and drivers Set of exemplary triggers and drivers Economic/financial Price, available income, profits Consumer choices Preferences, environmental motivation Company choices Capital productivity, re-investment in innovation Socio-cultural Cultural acceptance, status Physical constraints Time, space Goods and services attributes Substitutability, utility (Azevedo, 2014; van den Bergh et al., 2011; Castro et al., 2022; Metic and Pigosso, 2022; Sorrell et al., 2020) Use of content analysis for the systematic identification of the release or additional constraining of known rebound triggers and drivers in the case descriptions.
EXCERPTS FROM DOCUMENTS Identified rebound triggers and drivers A4. Manufacturer A2. PSS provider A1. Household A3. Real estate company Washing machine (C1) Ref 1 We save our planet and simultaneously households save money Marcel Peters, CEO TD1 - Reduced (investment) costs Ref 2 () not only do customers get household jobs done in an easy and affordable manner, but () TD2 - Increased lifetime costs TD10 Released time for household chores Ref 1 A washing machine can be seen as a key service that home owners may want to provide to their renters. TD12 Increased revenues through new market TRIGGERS/DRIVERS (TD) CLASS Economic/Financial Physical constraints 13
Identified rebound triggers and drivers (in a nutshell) 14 17 rebound triggers and drivers identified Rebound triggers and drivers per actor: 10 in the realm of the household 1 in the realm of the PSS provider 1 in the realm of the real estate company 1 in the realm of the manufacturer 4 in the realm of the machine How does it influence the trigger or driver: 10 release 7 constrain Reference or assumption-based: 13 reference 4 assumption
Research methodology 15 Research Input 2 Set of rebound triggers and drivers Research Step 2 Identification of rebound triggers Research Output 2 List of rebound triggers activated by actors Guiding research question: How to systematically identify rebound mechanisms of PSS?
Research methodology 16 d Research Step 3 Identification of potential rebound mechanisms Research Output 3 List of rebound mechanisms within actors reach Research Input 3 Catalogue of rebound mechanisms Guiding research question: How to systematically identify rebound mechanisms of PSS? 26 causal models that explain the structure of rebound mechanisms
Research methodology 17 d Research Step 3 Identification of potential rebound mechanisms Research Output 3 List of rebound mechanisms within actors reach Research Input 3 Catalogue of rebound mechanisms Guiding research question: How to systematically identify rebound mechanisms of PSS? Step-by-step identification of potential rebound mechanisms: Step 3.1. Identify the potential consumption modes for the actors (e.g., consumption of the same product / service / process or a different product / service / process) Step 3.2. Identify the eligible rebound mechanisms by analysing the released triggers and drivers against the catalogue of mechanisms (Guzzo et al., 2024) Step 3.3. Develop assertions of how the dynamic interplay of triggers and drivers can activate the consumption modes Step 3.4. Develop assertions of how the drivers can limit those dynamics Step 3.5. Elaborate on the dynamics of potential rebound mechanisms specific to the case. Step 3.6. Repeat 3.3, 3.4, and 3.5 for secondary benefits (SB)
Rebound mechanisms within actors realm A4. Manufacturer A2. PSS provider A1. Household A3. Real estate company Washing machine (C1) TD1 - Reduced (investment) costs TD2 - Increased lifetime costs TD10 Released time for household chores TD12 Increased revenues through new market TRIGGERS/DRIVERS (TD) CLASS Economic/Financial Physical constraints 18 IDENTIFIED MECHANISMS Actor: A1. Household M6 Re-spending (with limited income). Dynamics: Released investment costs (TD1) used to purchase other products and services, specially if they fail to account for the lifetime costs (TD2). Limiting dynamics: Limited by the household income. Influenced by the sustainability impacts of the other products and services. Rebound Effect or Secondary Benefit
Rebound mechanisms within actors realm A4. Manufacturer A2. PSS provider A1. Household A3. Real estate company Washing machine (C1) TD1 - Reduced (investment) costs TD2 - Increased lifetime costs TD10 Released time for household chores TD12 Increased revenues through new market TRIGGERS/DRIVERS (TD) CLASS Economic/Financial Physical constraints 19 IDENTIFIED MECHANISMS Actor: A1. Household M12* Substitution due to consumption time Dynamics: Less time used for household chores (TD10) is used for other activities Limiting dynamics: Influenced by the resource consumption of the other activity Rebound Effect or Secondary Benefit
Rebound mechanisms within actors realm A4. Manufacturer A2. PSS provider A1. Household A3. Real estate company Washing machine (C1) TD1 - Reduced (investment) costs TD2 - Increased lifetime costs TD10 Released time for household chores TD12 Increased revenues through new market TRIGGERS/DRIVERS (TD) CLASS Economic/Financial Physical constraints 20 IDENTIFIED MECHANISMS Actor: A3. Real estate company M18 Re-investment Dynamics: Increased revenues (TD12) used for the construction of buildings Limiting dynamics: Limited by the willingness to re-invest its profits and the resource consumption of the activity Rebound Effect or Secondary Benefit
Identified rebound mechanisms (in a nutshell) 21 27 rebound mechanisms identified Rebound mechanisms per actor: 12 relied on responses from the household 4 from the PSS provider 2 from the real estate company 2 from the manufacturer 2 from the PSS provider and the manufacturer 1 from the PSS provider and the collective of households The expected direction of the effect? 15 of the mechanisms are prone to Rebound Effects 8 can lead to Secondary Benefits On the completeness of the catalogue (Guzzo et al., 2024) 17 mechanisms are instances of the catalogue 6 were new to the catalogue
Research methodology 22 d Research Step 3 Identification of potential rebound mechanisms Research Output 3 List of rebound mechanisms within actors reach Research Input 3 Catalogue of rebound mechanisms Guiding research question: How to systematically identify rebound mechanisms of PSS?
Practical contribution 23 A structured approach to address RE in PSS design capable of providing actionable insight 3. Eliciting the rebound and secondary benefits mechanisms` dynamics 1. A careful analysis of the PSS offer using the system map 2. Systematic identification of releasing or constraining of triggers and drivers Understanding of the offer Realms of influence The critical link to identify the mechanisms Hinting on how to intervene in the system
Theoretical contribution and future research 24 This research exposes that the business logic sustaining the PSS offer is intrinsically connected with rebound triggers and drivers, and mechanisms. How PSS, circular and sustainability business models are prone to rebound effects?
Thank you Daniel Guzzo <dgdco@dtu.dk>

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Identifying rebound effects in product-service systems: actors, mechanisms, triggers and drivers

  • 1. 1 Identifying rebound effects in Product-Service Systems: Actors, Mechanisms, Triggers and Drivers 鐃 Guzzo, D.; Pigosso, D. Daniel Guzzo Assistant Professor / Researcher Section of Design for Sustainability DTU Construct Technical University of Denmark
  • 2. Why addressing RE in PSS design? 2 There is growing empirical evidence of Rebound Effects (RE) offsetting the potential sustainability gains of Product-Service Systems (PSS) Johnson and Plepys (2021); Warmington-Lundstr旦m and Laurenti (2020), Allais and Gobert (2016) Approaches to investigate RE in PSS design are emerging Kjaer et al. (2018), Kjaer et al. (2019), Alfarisi et al. (2022), Sarancic et al. (2023) Gap Nevertheless, we still do not understand the reasons for RE occurrence within a PSS context. Goal Systematically identify the causal elements leading to RE in a PSS context
  • 3. On rebound effects and mechanisms 3 Rebound effects (RE) The offset in performance caused by systemic responses to sustainability-oriented interventions Hertwich (2005); Lange et al. (2021) Rebound mechanisms Feedback structures that causally explain why and how RE occur. Guzzo et al. (2024) REBOUND EFFECTS magnitude
  • 5. 5 Product-service system Resource consumption Sustainability impacts Budget for consumption Consumption Satiation Controls Releases Stimulates Results in additional Leads to On rebound mechanisms (PSS ex.) Feedback structures that causally explain why and how RE occur. Guzzo et al. (2024)
  • 6. Research methodology 6 Guiding research question: How to systematically identify rebound mechanisms of PSS?
  • 7. Research methodology 7 Research Step 3 Identification of potential rebound mechanisms Research Step 1 System mapping Research Step 2 Identification of rebound triggers Guiding research question: How to systematically identify rebound mechanisms of PSS?
  • 8. Research methodology 8 Guiding research question: How to systematically identify rebound mechanisms of PSS? Research Input 1 Case description Research Step 1 System mapping Research Output 1 System map of the PSS configuration Document analysis (Yin, 2009) of a use-oriented PSS case of washing machine as a service (Bundles) using three sources for case description. Ref1. Circle Economy Knowledge Hub Ref2. Ellen MacArthur Foundation cases Ref3. Bundles website
  • 9. Research methodology 9 Guiding research question: How to systematically identify rebound mechanisms of PSS? Research Input 1 Case description Research Step 1 System mapping Research Output 1 System map of the PSS configuration Development of a system map (following Vezzoli et al. (2014)), to visualise the actors, components, and interaction flows of the PSS offer.
  • 10. System map: washing machine as a service 10 A4. Manufacturer A2. PSS provider A1. Household A3. Real estate company High-end washing machine (C1), with monitoring device 1. Offers, installs and maintains (A) 1. Provides washing machine in the rental agreement (B) 2. Informs costs and consumption patterns (A/B) 3. Pays to use: pay-per-period + pay-per-use (A/B) 1. Offers, installs and maintains (B) 0. Sells (A/B) Material flow Information flow Financial flow Legend Offer A Offer B Offer boundary Ownership Offer A/B
  • 11. Research methodology 11 Research Input 1 Case description Research Step 1 System mapping Research Output 1 System map of the PSS configuration Guiding research question: How to systematically identify rebound mechanisms of PSS?
  • 12. Research methodology 12 Research Input 2 Set of rebound triggers and drivers Research Step 2 Identification of rebound triggers Research Output 2 List of rebound triggers activated by actors Guiding research question: How to systematically identify rebound mechanisms of PSS? Classes of triggers and drivers Set of exemplary triggers and drivers Economic/financial Price, available income, profits Consumer choices Preferences, environmental motivation Company choices Capital productivity, re-investment in innovation Socio-cultural Cultural acceptance, status Physical constraints Time, space Goods and services attributes Substitutability, utility (Azevedo, 2014; van den Bergh et al., 2011; Castro et al., 2022; Metic and Pigosso, 2022; Sorrell et al., 2020) Use of content analysis for the systematic identification of the release or additional constraining of known rebound triggers and drivers in the case descriptions.
  • 13. EXCERPTS FROM DOCUMENTS Identified rebound triggers and drivers A4. Manufacturer A2. PSS provider A1. Household A3. Real estate company Washing machine (C1) Ref 1 We save our planet and simultaneously households save money Marcel Peters, CEO TD1 - Reduced (investment) costs Ref 2 () not only do customers get household jobs done in an easy and affordable manner, but () TD2 - Increased lifetime costs TD10 Released time for household chores Ref 1 A washing machine can be seen as a key service that home owners may want to provide to their renters. TD12 Increased revenues through new market TRIGGERS/DRIVERS (TD) CLASS Economic/Financial Physical constraints 13
  • 14. Identified rebound triggers and drivers (in a nutshell) 14 17 rebound triggers and drivers identified Rebound triggers and drivers per actor: 10 in the realm of the household 1 in the realm of the PSS provider 1 in the realm of the real estate company 1 in the realm of the manufacturer 4 in the realm of the machine How does it influence the trigger or driver: 10 release 7 constrain Reference or assumption-based: 13 reference 4 assumption
  • 15. Research methodology 15 Research Input 2 Set of rebound triggers and drivers Research Step 2 Identification of rebound triggers Research Output 2 List of rebound triggers activated by actors Guiding research question: How to systematically identify rebound mechanisms of PSS?
  • 16. Research methodology 16 d Research Step 3 Identification of potential rebound mechanisms Research Output 3 List of rebound mechanisms within actors reach Research Input 3 Catalogue of rebound mechanisms Guiding research question: How to systematically identify rebound mechanisms of PSS? 26 causal models that explain the structure of rebound mechanisms
  • 17. Research methodology 17 d Research Step 3 Identification of potential rebound mechanisms Research Output 3 List of rebound mechanisms within actors reach Research Input 3 Catalogue of rebound mechanisms Guiding research question: How to systematically identify rebound mechanisms of PSS? Step-by-step identification of potential rebound mechanisms: Step 3.1. Identify the potential consumption modes for the actors (e.g., consumption of the same product / service / process or a different product / service / process) Step 3.2. Identify the eligible rebound mechanisms by analysing the released triggers and drivers against the catalogue of mechanisms (Guzzo et al., 2024) Step 3.3. Develop assertions of how the dynamic interplay of triggers and drivers can activate the consumption modes Step 3.4. Develop assertions of how the drivers can limit those dynamics Step 3.5. Elaborate on the dynamics of potential rebound mechanisms specific to the case. Step 3.6. Repeat 3.3, 3.4, and 3.5 for secondary benefits (SB)
  • 18. Rebound mechanisms within actors realm A4. Manufacturer A2. PSS provider A1. Household A3. Real estate company Washing machine (C1) TD1 - Reduced (investment) costs TD2 - Increased lifetime costs TD10 Released time for household chores TD12 Increased revenues through new market TRIGGERS/DRIVERS (TD) CLASS Economic/Financial Physical constraints 18 IDENTIFIED MECHANISMS Actor: A1. Household M6 Re-spending (with limited income). Dynamics: Released investment costs (TD1) used to purchase other products and services, specially if they fail to account for the lifetime costs (TD2). Limiting dynamics: Limited by the household income. Influenced by the sustainability impacts of the other products and services. Rebound Effect or Secondary Benefit
  • 19. Rebound mechanisms within actors realm A4. Manufacturer A2. PSS provider A1. Household A3. Real estate company Washing machine (C1) TD1 - Reduced (investment) costs TD2 - Increased lifetime costs TD10 Released time for household chores TD12 Increased revenues through new market TRIGGERS/DRIVERS (TD) CLASS Economic/Financial Physical constraints 19 IDENTIFIED MECHANISMS Actor: A1. Household M12* Substitution due to consumption time Dynamics: Less time used for household chores (TD10) is used for other activities Limiting dynamics: Influenced by the resource consumption of the other activity Rebound Effect or Secondary Benefit
  • 20. Rebound mechanisms within actors realm A4. Manufacturer A2. PSS provider A1. Household A3. Real estate company Washing machine (C1) TD1 - Reduced (investment) costs TD2 - Increased lifetime costs TD10 Released time for household chores TD12 Increased revenues through new market TRIGGERS/DRIVERS (TD) CLASS Economic/Financial Physical constraints 20 IDENTIFIED MECHANISMS Actor: A3. Real estate company M18 Re-investment Dynamics: Increased revenues (TD12) used for the construction of buildings Limiting dynamics: Limited by the willingness to re-invest its profits and the resource consumption of the activity Rebound Effect or Secondary Benefit
  • 21. Identified rebound mechanisms (in a nutshell) 21 27 rebound mechanisms identified Rebound mechanisms per actor: 12 relied on responses from the household 4 from the PSS provider 2 from the real estate company 2 from the manufacturer 2 from the PSS provider and the manufacturer 1 from the PSS provider and the collective of households The expected direction of the effect? 15 of the mechanisms are prone to Rebound Effects 8 can lead to Secondary Benefits On the completeness of the catalogue (Guzzo et al., 2024) 17 mechanisms are instances of the catalogue 6 were new to the catalogue
  • 22. Research methodology 22 d Research Step 3 Identification of potential rebound mechanisms Research Output 3 List of rebound mechanisms within actors reach Research Input 3 Catalogue of rebound mechanisms Guiding research question: How to systematically identify rebound mechanisms of PSS?
  • 23. Practical contribution 23 A structured approach to address RE in PSS design capable of providing actionable insight 3. Eliciting the rebound and secondary benefits mechanisms` dynamics 1. A careful analysis of the PSS offer using the system map 2. Systematic identification of releasing or constraining of triggers and drivers Understanding of the offer Realms of influence The critical link to identify the mechanisms Hinting on how to intervene in the system
  • 24. Theoretical contribution and future research 24 This research exposes that the business logic sustaining the PSS offer is intrinsically connected with rebound triggers and drivers, and mechanisms. How PSS, circular and sustainability business models are prone to rebound effects?
  • 25. Thank you Daniel Guzzo <dgdco@dtu.dk>