Leasing Society
* Report: Leasing Society. STUDY. By Susanne Fischer, Sören Steger et al. European Union: Policy Department Economic and Scientific Policy, European Parliament, 2012
URL = http://www.europarl.europa.eu/committees/en/envi/studiesdownload.html?languageDocument=EN&file=79330
Abstract
"The vision of a leasing society is characterised by a new relationship between producers and customers. This new relationship is based on innovative and more service-oriented business models to meet customer needs with novel approaches to ownership and responsibility. This study explores the leasing society in four chapters.
It
(1) examines the basic ideas behind the concept,
(2) presents a collection of case studies,
(3) summarises strengths and risks, and
(4) concludes with policy options that could support the transition to a leasing society."
Excerpts
EXECUTIVE SUMMARY
"The shift toward a leasing society could be one opportunity for business to increase competitiveness in an environmentally friendly way. While a leasing society could become a key element of a resource-efficient Europe, it is probably not a solution in and of itself. This study presents both (i) a vision of a leasing society, characterised by innovative business models and customers willing to make greater use of new product-service systems, and (ii) the risks if development follows conventional leasing models and business-as-usual trends.
The vision of a leasing society is characterised by much more than just a widespread leasing of goods. Rather, it is about finding the best way to fulfil customer needs, generally in new and more service-oriented ways. It implies a new relationship between producers and customers as it changes traditional notions about product ownership and responsibility.
Increased producer responsibility may create incentives for more resource-efficient product design, especially to prolong product life, enable easier remanufacturing and optimise utilisation.
Case studies reveal that the theoretical advantages of service-oriented business models can result in real benefits. Especially examples of companies offering services, like chemical management and mobility, instead of selling products, like chemicals and cars, are widespread. Nevertheless, these kinds of business models are offered and requested by only a few enterprises.
Moreover, it is difficult to assess the potential macro-economic impacts based on single case studies. Product-service systems can be connected to considerable trade-offs. If a leasing society develops toward conventional product leasing alone, it could be more environmentally harmful (e.g. if it leads to rebounds in customer behaviour regarding the turnover of goods) and contribute to negative social impacts (e.g. outsourcing jobs at lower pay and worse conditions).
Strong policy direction is needed to mitigate risks and encourage development toward the vision of a leasing society. Current policies, like the Eco-Design Directive, could be enhanced to promote a leasing society. Policy instruments like taxes could also be used. For instance, a leasing society could be supported by a shift in taxation from labour towards resource consumption, reduced VAT rates for extended maintenance and repair, and extended depreciation rates.
In summary, this study concludes that a leasing society has the potential to bring economies onto a more sustainable pathway. However, economic, social and environmental impacts depend on both the choice of product-service systems and how they are implemented. Further research is necessary to expand knowledge and understanding of the complex macroeconomic impacts of service-oriented business models in a leasing society.
INTRODUCTION
The European Commission (EC 2011) has identified a dual challenge for Europe: “of stimulating the growth needed to provide jobs and well-being to its citizens, and of ensuring that the quality of this growth leads to a sustainable future.” These challenges are rooted in the fact that business-as-usual patterns of production, consumption and disposal cannot be sustained in an equitable way over the long term.
Global resource extraction and use increased by 78 % between 1980 and 2008 (SERI 2011). The EU imports around 6 times more materials than it exports (EEA 2010) and per capita material consumption in Europe is around 40 % higher than the world average (Dittrich et al. 2012). The EEA (2010) highlighted the fact that the world is experiencing environmental change at an unprecedented speed and scale. Although many of the immediate impacts have been outside of Europe’s direct influence, interconnected risks and increased vulnerabilities pose new challenges “for the resilience and sustainable development of the European economy and society” (EEA 2010).
Recognizing these challenges, the European Commission has made resource efficiency one of the seven flagship initiatives of the Europe 2020 strategy for smart, sustainable and inclusive growth. Activities to develop targets for reducing resource consumption are underway at the European level. The key question facing policy makers, industries, business and citizens is how to decouple primary resource use from wealth and well-being.
A significant reduction of primary resource consumption will most likely require structural change in the way economies use resources. It will mean a transition away from linear models of increasing extraction, production, consumption and disposal to more resilient circular models of efficient as well as consistent resource use and re-use. This is the basic idea behind a green economy, a circular economy and a resource-efficient Europe. A so-called “leasing society” could become one of the key elements of a green economy and resource-efficient society. The concept of a leasing society has received a lot of attention recently, especially as a win-win solution for increasing competitiveness in an environmentally friendly way. This report puts a leasing society into perspective by asking what it is, what it can achieve, where its limits are and how it can be fostered at a policy level.
This report argues that how a leasing society is implemented is key to maximizing economic, environmental and social benefits. While there are a number of success stories, evidence of potential macro-economic benefits or drawbacks is largely missing. Anecdotal evidence indicates that the type of leasing is important. Novel and innovative productservice systems to meet customer needs in a resource-efficient way are the pinnacle of a leasing society. Conventional product leasing may represent the beginning of such a society, but measures to ensure that activities progress toward more result-oriented and resource-efficient services are needed.
Chapter 1 begins by presenting a vision of a leasing society. It describes the implications of a leasing society on products and services, property and responsibility, and use and consumption. Chapter 2 takes a detailed look at actual business cases where leasing was made a successful part of business models. It summarises key barriers and drivers identified from the case studies. Chapter 3 assesses the possible strengths and weaknesses of a leasing society. It argues that different types of product-service systems have different economic, social and ecological impacts. Chapter 4 examines policy instruments with the potential to support the transition toward a leasing society. It highlights how existing measures could both contribute to and be enhanced, as well as what new instruments could be used, to promote development of a leasing society in the EU."