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

Author

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  • Quariguasi Frota Neto, J.
  • Bloemhof-Ruwaard, J.M.

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.

Suggested Citation

  • Quariguasi Frota Neto, J. & Bloemhof-Ruwaard, J.M., 2009. "The Environmental Gains of Remanufacturing: Evidence from the Computer and Mobile Industry," ERIM Report Series Research in Management ERS-2009-024-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
  • Handle: RePEc:ems:eureri:15912
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    Keywords

    closed-loop supply chains; eco-efficiency; remanufacturing; sustainability;

    JEL classification:

    • M - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

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