Energy Implications of Product Leasing

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Author Name: 
Intlekofer, Koji
Publication Title: 
MS Thesis, Woodruff School of Mechanical Engineering Georgia Institute of Technology

A growing number of advocates have argued that leasing is a ‘greener’ form of business transactions than selling. Leasing internalizes the costs of process wastes and product disposal, placing the burden on the OEMs who gain from reducing these costs. Product leasing results in closed material loops, promotes remanufacturing or recycling, and sometimes leads to shorter life cycles. In this paper we provide two case studies to quantitatively test these claims for two distinct product categories. Life cycle optimization and scenario analysis are applied, respectively, to the household appliance and the computer industry to determine the effect that life spans have on energy usage, and to what extent leasing the product versus selling it may influence the usage life span. We find that products with high use impacts and improving technology can benefit from reduced life cycles (achieved through product leases) while products with high manufacturing impacts and no improving technology do not.