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Eco-efficiency in the era of electronic commerce – should ‘Eco-Effectiveness’ approach be adopted?
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Journal of Cleaner Production 16 (2008) 801e808 www.elsevier.com/locate/jclepro
Eco-efficiency in the era of electronic commerce e should ‘Eco-Effectiveness’ approach be adopted? Sajed M. Abukhader* University of Dubai, College of Business Administration, United Arab Emirates Received 17 October 2006; received in revised form 26 March 2007; accepted 6 April 2007 Available online 6 June 2007
Abstract In the 1980s, when PCs were first introduced, a vision arose of the ‘‘paperless office.’’ Yet, it did not yield the anticipated environmental benefits. Nowadays, such optimism about the implications of information technology, and in particular, E-commerce continues to proliferate today. But will E-commerce turn out to be a success story, or another unrealised utopia? Drawing on content analysis and concept development methods, this paper discusses a number of observations of interest in the literature that, taken together, point out that eco-efficiency is not sufficient to be the leadership strategy of choice for forecasting and reducing environmental damage arising from the implementation of E-commerce. Rather, utilizing an emerging concept of eco-effectiveness together with eco-efficiency may offer a model for managing the environmental consequences of E-commerce. Yet, to wield more influence, the current concept of eco-effectiveness needs to be expanded in order to complement e and not to replace e eco-efficiency. Ó 2007 Elsevier Ltd. All rights reserved. Keywords: Eco-efficiency; Electronic commerce; Eco-effectiveness; Supply chain management; Environmental assessment; Life cycle assessment
1. Introduction Today, a great deal of optimism surrounds electronic commerce and other information technology-based fields, particularly in relation to the possibility that they may yield important environmental benefits [1]. At the same time, there exists a risk that this optimistic trend, especially in the context of electronic commerce (E-commerce) and its impact on the economy, may become a sort of elusive utopia. When the personal computer was first introduced in the 1980s, a vision emerged of the ‘‘paperless office.’’ Unfortunately, and despite expectations, developments at present tend to indicate that what was anticipated is not being realised [2]. E-commerce is a very recent field, and is still in the process of development. In fact, no one can say when or how stabilisation will occur, nor can predict with accuracy the number of ramifications that E-commerce may involve, given the wide range of processes and supply chains implicated [1,3]. The potential * Tel.: þ971 50 7873571; fax: þ971 4 2242151. E-mail addresses: [email protected], [email protected] 0959-6526/$ - see front matter Ó 2007 Elsevier Ltd. All rights reserved. doi:10.1016/j.jclepro.2007.04.001
impact is so great e much greater than it would have been for the paperless office e that it could affect the whole economic system (the sum of all product systems [4]). Of course, it would be better if we had some idea of our ‘‘grip’’ e or level of control e on the consequences of the proliferation of E-commerce. One way to comprehend the nature of the ‘‘grip’’ on the potential outcomes is to examine the tools used to measure performance. In doing this, one inevitably runs into two commonly used terms: efficiency and effectiveness. In this regard, two issues arise. First, there already exists an established term for environmental efficiency, ‘eco-efficiency,’ but the analogous term addressing environmental effectiveness, ‘eco-effectiveness,’ is not in common use. ‘Eco-effectiveness’ is still seen as a metaphor. Secondly, research into environmental assessment runs into many limitations and difficulties in attempting to reach a consensus concerning the environmental outcomes of implementing E-commerce, as well as in specifying the scope and boundaries of assessment [1,3]. Could the above concerns indicate a problem in strength with the current environmental approach towards such
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a challenging trend as E-commerce? Addressing this question involves investigating two questions, which constitute the purpose of this paper:
to E-commerce. Rebound effects are considered one form of implications of E-commerce, which are usually categorised into three forms [5,6,7,8,9]:
What does the literature say about the terminology available? Given that the body of knowledge as it now exists relies on only one dimension e that of eco-efficiency e does it offer adequate control?
a. The impact of the infrastructure of E-commerce (installed cables, PCs, hardware, etc.), b. The impact of the use of E-commerce (affecting various industrial processes of production, transportation, packaging, warehousing, etc. Several challenging trends can be expected, for example, differentiation (as opposed to standardisation) of products and packages, mass customisation, centralisation of warehousing, etc.), and c. The impact of rebound effects, for instance: Substantial changes in consumption patterns, always difficult to predict; The overwhelming number of returns of unwanted or defective products; The supplanting of shopping trips by leisure or other types of trips.
Ultimately, the goal of this paper is to explore whether the concept of eco-efficiency can stand as the only criterion for examining and dealing with the topic of E-commerce from an environmental perspective. In addition, this paper proposes a framework for developing/extending the dimension of ‘eco-effectiveness,’ offering a necessary, complementary (to eco-efficiency) binocular for examining the environmental consequences of E-commerce. It is nevertheless beyond the scope of this paper to compare eco-effectiveness with ecoefficiency or to propose that either term replace the other; indeed, this paper emphasises the fact that the two terms complement each other. 2. Research method This paper makes use of a mix of two research methods, content analysis and concept development, in order to find and analyse lines of interest in the environmental literature that intervene against eco-efficiency as the sole framework for examining the environmental consequences of E-commerce. This research does not encompass the entire body of knowledge in environmental management, E-commerce, or supply chain management, but rather brings together a number of remarks, all of which show that the concept of eco-efficiency alone is not in itself sufficient to appraise E-commerce. As a result of the analysis, and with the aid of concept development, a framework is proposed for developing and extending the concept of eco-effectiveness so as to more suitably fit the conditions of E-commerce. 3. Results and discussions The analysis of the literature reveals that: It is questionable whether eco-efficiency alone can deal adequately with environmental outcomes arising from Ecommerce without involving the other logical dimension, effectiveness (Section 3.1 and 3.2), and Environmental effectiveness, as a term, and ‘eco-effectiveness’ are not functioning in common paradigm (Section 3.3). 3.1. Rebound effects Rebound effects represent one of the primary issues in determining that eco-efficiency is not the sole strategy of choice for forecasting and reducing the environmental damages due
At present, it is generally anticipated that E-commerce will yield great environmental benefits in terms of resource use. Its proponents believe, for example, that private transport (via private cars) will be considerably reduced, that mass production will shift into mass customisation e thus saving resources due to lower inventory levels and less waste generation throughout the life cycle e and that paper consumption will decline dramatically [8]. It has been foreseen that E-commerce will contribute to a dramatic reshaping of future cities [10]. Support for such claims is, however, mostly anecdotal or mere speculation [1,8,10]. There are, as well, opponents to E-commerce who are not optimistic, though their contentions are also lacking in evidence. Rebound effects, being one of the primary drawbacks associated with the use of E-commerce, represent an issue of concern in any attempt to arrive at a consensus. It has been found that whenever technology becomes more efficient, this improvement is usually accompanied by an increase in its use in order to improve the quality of life and make it more comfortable. For instance, in Norway, energy consumption per household rose rather than declined when energy conservation schemes in private buildings were introduced [11,12]. Further, improvements in fuel efficiency achieved over the last 10 years have been counterbalanced by the escalating number and use of vehicles [12]. These observations are not unique on the global scene; there are similar cases elsewhere, especially in the OECD countries [13]. Such observations are in fact not new; the Jevons Paradox, named for William Jevons, states that an increase of efficiency in the use of a resource may actually lead to an increase in the total consumption of that resource [14]. This is well-accepted by modern economic theory. In the E-commerce era, it is likely that people will travel for leisure or for other similar reasons; such travel will replace the decrease in shopping trips (due to home delivery) [9]. It is probable that people will print out online sales catalogues, and that retailers will print out online orders. It is foreseen as likely that people will buy and consume more and more
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[5,6,7]. Moreover, one important trend expected in the next few years is an increase in mass customisation (as opposed to mass production). Although it is anticipated to be worthwhile from an environmental point of view (since waste is reduced throughout the life cycle), there are hidden negative consequences. The effect in this situation is similar to that of, for example, reducing sewage effluent from textile finishing while at the same time increasing the amount of additives used in textiles, thus ending up with a non-recyclable product (example taken from Ref. [15]). Another line of interest regarding rebound effects concerns reverse logistics (which is an issue of ongoing modeling research work on various possibilities with E-commerce). As reverse logistics is a possible facilitator for the recycling/recovery of products, there can be two scenarios for how the recycled material will end up. ‘‘It is important to use recovered materials primarily as a substitution for virgin materials in meeting the existing demand in the market, and not provoke new demands to find a use for recovered materials’’ [12]. ‘‘Substitution for virgin materials’’ denotes eco-effectiveness (defined Section 3.3.3 e ‘‘cradle-to-cradle’’ cycle), and ‘‘provoke new demands’’ implies rebound effects. What might promote the embrace of eco-effectiveness approach is the development of ‘‘better channels for environmental information and feedback loops’’ with the power of Internet [12]. On that account, ecoeffectiveness gains a greater credibility in being considered along with eco-efficiency in the context of E-commerce. 3.2. E-commerce and LCA The considerable limitations involved in using life cycle assessment (LCA) for evaluating the environmental implications of E-commerce (impacts categorised earlier in ‘a’ and ‘b’) [1,3] are another reason why E-commerce cannot be adequately dealt with from the perspective of eco-efficiency alone. The main problem is that LCA (which accompanies eco-efficiency in the paradigm of industrial ecology) is only able to accommodate one chain of assessment at a time, and thus has limited scope, which means that there is a very high probability of missing the changes that take place in many other interconnected chains and which happen as a result of a change in the assessed chain. It must be remembered that E-commerce is a matter of many supply networks affecting the whole economy. For this reason, eco-efficiency does not reveal itself to be in a strong position for leading research into the areas of E-commerce and the environment. In fact, when looking into the field of management of supply chains, one realises through a number of remarks that embracing ‘effectiveness’ term is necessary for complementing the total understanding once using the term, eco-efficiency. 3.2.1. Efficiency in supply chain management While the field of supply chain management (SCM) (which is relevant to E-commerce) offers a comprehensive view of efficiency and effectiveness, the environmental paradigm embraces only one dimension (efficiency) without the other (effectiveness). In SCM, efficiency and effectiveness
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are both utilised and defined. ‘‘Efficiency is related to the internal activities of a company or a supply chain, while effectiveness is externally related.’’ ‘‘Efficiency should (.) be measured internally, while effectiveness is best measured at the interface with end-customers’’ (Fig. 1) [16]. Actually, as in Slater and Narvar [17], efficiency and effectiveness are considered two critical dimensions of customer value. In other words [16]: Efficiency: Doing things in the right way (comparing output to input). Effectiveness: Doing the right things (comparing an accomplished work to a planned target). Thus, both terms are necessary and that they are neither similar nor equivalent, but actually complementary. The picture will be incomplete if one considers only one without the other. 3.2.2. Process vs. strategic focus Since efficiency is a process level issue (concerned with evaluating internal processes) and effectiveness is a strategic level issue (evaluating the total outcome and achievement of the goals and vision), discrepancies will occur if the efficiency approach alone examines the consequences of E-commerce. In the same time, E-commerce e defined as: ‘‘any form of business transaction in which the parties interact electronically rather than by physical exchanges or direct physical contact’’ [18] e is a topic of potentially wide-scale impact across various supply networks/chains. This fact underlines the need for the complementary approach of effectiveness to achieve an aggregate level of assessment. Therefore, efficiency and effectiveness are definitely complementary to each other; to investigate the environmental implications of E-commerce, both concepts are needed. 3.3. The available definitions This section investigates four forms of terminology: ‘environmental efficiency’, ‘environmental effectiveness’, ‘eco-efficiency’, and ‘eco-effectiveness’. The aim is to see which of these terms are recognised and in common use, and to determine if they can be distinguished from one another. The search
Fig. 1. Measuring efficiency and effectiveness in supply chains (After Saghir, 2004) [16].
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was triangulated across three types of sources: specialised dictionaries, experts (one academic and one professional), as well as certain relevant references. 3.3.1. Definitions from specialised dictionaries and experts Table 1 and Fig. 2 present a number of definitions aggregated from several sources. From the table and the figure, it can be seen that there is no complementary corollary ‘ecoeffectiveness’ for the known term ‘eco-efficiency’. Also, it is noted that there is no prevailing environmental interpretation of the concept effectiveness.
term for more than a decade. WBCSD considers an ‘ecoefficiency portfolio’ (where the environmental burden and the total economic costs are plotted on a two-axis graph) a key to determining a product’s environmental efficiency [32]. Some of the definitions found for eco-efficiency include the following:
3.3.2. In relevant references The term most commonly seen in several references is, in fact, eco-efficiency. Focusing on reducing the environmental waste of industrial processes, eco-efficiency has been widely hailed as the approach of choice for environmental leadership [31]. The World Business Council for Sustainable Development (WBCSD) has promoted this
1. ‘‘The ability of a managed entity to simultaneously meet cost, quality, and performance goals, reduce environmental impacts, and conserve valuable resources’’, where the ‘‘entity’’ is a product or a process [33]. 2. ‘‘Eco-efficiency, cleaner production and lean production are based on a common philosophy: to reduce waste in all steps of a production process. Eliminating waste will lead to improvements in eco-efficiency and thus contributes to: less energy consumption, less waste material, less materials handling, and less intermediate storage’’ [34]. 3. The ‘‘call for a new management philosophy aimed at steering the course of a company in a direction that will
Table 1 Summary of the definitions of the terms environmental efficiency and effectiveness Name of dictionary
English dictionaries
Cambridge dictionaries [21]
Merriam-Webster dictionary [22]
The definitions Efficiency
Effectiveness
‘‘The efficiency of a machine or an engine is the difference between the amount of energy that is put into it in the form of fuel, effort, etc. and the amount that comes out in the form of movement’’ ‘‘Productive without waste’’
‘‘Something can be described as effective if it produces the results that it was intended to’’
It is rather an economical term presented as ‘Cost-effectiveness’ to describe how much a process is ‘‘economical in terms of tangible benefits produced by money spent’’
Engineering encyclopaedias
Mc Graw-Hill encyclopaedia of science and technology [23]
The common meaning is ‘‘the ratio expresses as a percentage, of the output to the input of power (energy or work per unit time)’’
Described through a phrase ‘effective dose’: ‘‘to characterize the potency of a drug by the amount required to produce a response in 50% of the subjects to whom the drug is given’’
Environmental dictionaries
Longman dictionary of environmental science [24] Encyclopaedia of environmental science and engineering [25] Encyclopaedia of energy technology and environment [26]
None
None
None
None
The general common meaning as being the measure of the body’s performance e the ratio of output over input None
(in the environment section of the Encyclo.) We find only the term ‘cost-effectiveness analysis’a None
None
None
‘‘How cost-effectively inputs are converted into outputs and results are achieved’’ ‘‘The allocation of goods to their uses of highest relative value’’b
‘‘A measure of the extent to which a project or programme is successful in achieving its results’’ None
US environmental protection agency (a website glossary) [27] The soil science society of America (a website glossary) [28] U.N. Enviro. Prog. (A Projects’ Manual on the Net) [29] Environmental economics glossary (a consultancy website) [30]
a This analysis ‘‘involves comparison of the costs of alternative approaches to achieving a specific objective, e.g., a reduction in pollution. Unlike benefit-cost analysis, which requires monetization of both the benefits and costs of the proposed action, cost-effectiveness analysis does not require that benefits be expressed in monetary terms. Instead, benefits are expressed as the reduction in different types of damages or sources of damages, e.g., decreased risk of mortality or decrease in the concentration of the pollutant in a body of water. A cost-effectiveness can be assessed by choosing a target level of effectiveness (or goal) for which the least-cost alternative is identified’’. b ‘‘Allocative efficiency: Obtaining the most consumer satisfaction from available resources’’ [30].
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An academic scholar [19]
“The distinction between efficiency and effectiveness must come from economy. But the terms are not always sharp there. Effectiveness: the degree to which you reach your aim. Efficiency: the same, but then divided by the costs.”
An environmental expert [20]
“Environmental efficiency refers to products and processes that provide goods and services with lower environmental impacts. An example is a fluorescent light bulb, which produces the same amount of light while using 1/4 or the electricity used by an incandescent light bulb. Environmental efficiency is also called eco-efficiency. Environmental effectiveness is not a term of practice, so its meaning will depend on its use. Possibly it refers to eco-efficiency. Possibly it refers to environmental engineering or management techniques that support environmental quality”
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Fig. 2. Definitions of efficiency and effectiveness from two environmental experts through personal communications [19,20].
reduce the overall input of nature per unit of output’’ is the aspiration of the term eco-efficiency. This term represents ‘‘an overlap between economic efficiency and ecological efficiency’’ [35]. 4. ‘‘It has been developed by business for business. The first word of the concept encompasses both ecological and economic resources e the second says we have to make optimal use of both. One important aspect of eco-efficiency in practice is resource productivity e doing more with less. Reducing waste and pollution, and using fewer energy and raw material resources, is obviously good for the environment, and making better use of inputs translates into bottom-line benefits. These benefits potentially will increase as governments implement plans to change market frameworks in order to make resources and pollution more expensive. Eco-efficiency focuses as well on creating additional value by better meeting customer needs while maintaining or reducing environmental impacts’’ [36]. To summarise, ‘‘eco-efficiency is reached by the delivery of competitively priced goods and services that satisfy human needs and bring quality of life, while progressively reducing environmental impacts and resources intensity throughout the life cycle, to a level at least in line with the earth’s estimated carrying capacity’’ [36]. 5. ‘‘The reduction of environmental impact through more efficient use of materials and natural resources in manufacturing, is driven in large part by process and operational decisions that would fall under the category of pollution prevention’’ [37]. The term ‘environmental effectiveness’ has been used in the literature limited to the application of environmental management systems. For Hamschmidt and Dyllick [38], ‘‘‘effectiveness’ here means ‘doing the right things’ in order to reach absolute improvements of environmental performance. This goes beyond the common understanding of eco-efficiency (‘doing the things right’), which generally aims at reducing negative environmental impacts per unit of output’’, as clearly seen in the definitions above for eco-efficiency. When evaluating the statements in the above various references, one finds that there is a general consensus that efficiency basically means measuring output to input, while for effectiveness the available definitions are not in concordance. At times, effectiveness is seen as an economic issue; elsewhere
it becomes the achievement of goals, and at other times it appears to be with no practice. 3.3.3. Search for ‘Eco-effectiveness’ An intensive search in various journal databases revealed that the term ‘eco-effectiveness’ seems to be an emerging concept, which has been adopted limitedly in: Schaltegger and Sturm (1990, 1992, and 1998) as being complementary to the economic value orientation of eco-efficiency [39], and Braungart and McDonough (Braungart, 1994; Braungart and McDonough, 1998; McDonough and Braungart, 2002; and McDonough, Braungart, Anastas and Zimmerman, 2003) [40,41,42,43] to identify a different concept from eco-efficiency. The examples, through which this concept is explained, commonly deliver a message that ‘‘long-term prosperity depends not on the efficiency of a fundamentally destructive system, but on the effectiveness of the processes designed to be healthy and renewable in the first place. Eco-effectiveness celebrates the abundance and fecundity of natural systems, and structures itself around goals that target 100 percent sustaining solutions’’ [42]. The basic idea is that eco-effectiveness ‘‘leads to human industry that is regenerative rather than depletive,’’ and ‘‘from an industrial design perspective, it means products work within cradle-to-cradle life cycle rather than cradle-to-grave ones’’ [31]. In other words, products are designed to be discharged into the environment, and absorbed by it [44]. One may argue that linking the term to ‘‘cradle-to-cradle’’ seems unclear especially since eco-efficiency also is concerned with recycling. However, eco-efficiency aspires to promoting ‘‘the minimisation’’ approach toward waste disposal and not to centrally recycling it. Recycling is considered important since waste contains valuable and rare materials in many instances. ‘‘Eco-efficiency optimises efficiency and environmental impact, and thus it only reduces the waste associated with industrial activity but does not eliminate it. Hence, it only delays an eventual ecological decline’’ [45]. ‘‘Although the debate about eco-efficiency is by far from over,’’ Dyllick and Hockerts [46] argue in their paper, the ‘‘issue of eco-effectiveness deserves equal scholarly attention’’ [46].
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4. Extending eco-effectiveness 4.1. Consumption behavior Despite its relative success in confronting rebound effects, eco-effectiveness still lacks the human side as a direct influence. This is because with eco-effectiveness the consumption behavior issue is not as yet solved; it is only the technical problem, which involves materials and a ‘‘complete recycling system’’ (‘‘cradle-to-cradle’’), that gets solved. Buying and consuming may still increase, which means there will still be an increase in the consumption of natural resources (particularly the non-renewables), especially via processes that handle material recovery/recycling and perform transportation from ‘‘grave’’ back to ‘‘cradle’’. For instance, there is a belief [46] that the current focus might shift from the efficiency of fossil fuels to the effectiveness of solar cells. However, the abundance of energy that solar cells will produce might in itself create a considerable increase in electricity consumption as people use the infrastructure and consequently as well the impact of large scale production of solar cells themselves. Still, it can be argued that if the solar energy system is standardised and has ‘‘complete’’ recycle-ability (according to the concept of eco-effectiveness), then the impact of production might be negligible. Another consideration along the same line is that one of the main advantages of E-commerce transactions (from an SCM/business point of view) is to respond to customers’ demands effectively. This is likely to lead to a higher level of differentiation of products and packages [47], and may in fact engender more complication and place further demands on the recycling goals of eco-effectiveness. This paper therefore proposes that eco-effectiveness should attempt to potentially reengineer consumer culture and sociology so that consumers pay more consistent attention to the functionality of products or services they pay for rather than just accumulating products as possessions [48]. Thus, the idea in this connection is to promote the slogan ‘‘functionality and not possession’’ [48]. This can happen if the device that produces a service is shared instead of being purchased by each individual, or many individuals purchasing the service from the owner of the device. One example is car pools, which involves sharing of automobiles: a group of people reserves one or two cars for their use at any time for a small monthly or annual fees. Although changing people’s attitudes is not an easy task, the interest and aim should be to make ‘‘functionality’’ more attractive, challenging the wish for ‘‘more products’’. Ropke [49] in her review states that ‘‘some people hope that the consumption patterns will change, almost by themselves, in a more sustainable direction, because consumers come to a certain degree of satiation with material goods and therefore demand non-material services’’. However, Ropke [49] points out that ‘‘the contribution from private services has been limited’’, and that ‘‘future possibilities of increasing environmentally benign services meet serious limitations, so active policies are needed to overcome these’’.
Still, the above thinking (‘‘functionality and not possession’’) shall be complemented with considering various means of extending lifetime of those products by reusing, repairing, remanufacturing, etc. This is because if the product is consumed in a relatively short time, then its value will finally be lost. Yet, it must be mentioned that in some situations, dumping is more efficient and more cost-effective. Returnable packages, for instance, have not yet been proved to be an environmental choice vis-a`-vis one-way packages [50]. For mass-produced items such as complex appliances or certain vehicle parts, repair is not cost-effective in comparison to dumping, although there is still a good potential for repair/renovation if manufacturers are given incentives [51]. Functionality remains a relevant issue since E-commerce is expected to motivate an increase in outsourcing and third party growth, which are just simply synonyms for the functionality/leasing idea. One may argue that functionality is already being promoted due to the use of the term ‘sufficiency’ in response to the topic of consumption [35] (Fig. 3). However, this is in fact ‘‘an issue of individual choice rather than a single firm’s responsibility’’ as most advocates see sufficiency [46]. Although it has a value in influencing the consumer’s attitude, it is not a part of ecoeffectiveness. 4.2. System type III In industrial ecology, three ecosystem types are defined [52]. ‘‘A traditional Type I system is one in which the input of natural resources and output of wastes are not, fundamentally, considered except in an economic fashion, and where there is flow of materials from one life cycle production process to the other. This is essentially an inactive approach to sustainability although it can become reactive through imposition of command and control such as pollution constraints’’ [48]. ‘‘A Type II industrial ecological system is one in which there is recycling of wastes and reuse of by-products of one process, either in the same process, or in another one, in order to reduce the resource input requirements and the output waste by-products of the several processes’’. ‘‘Process redesign and
Fig. 3. Overview of the six criteria of corporate sustainability [46].
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reengineering can potentially enable the Type II system to become a Type III system in which the overall industrial ecological system is closed and there are no (un-renewable) resource requirements and no waste products. This is a proactive approach to industrial ecology and one that ultimately leads to simultaneous human socio-economic development and sustainability’’ [48]. This research finds that in fact eco-efficiency attempts to promote System Type II of industrial systems, while eco-effectiveness is instead related to Type III; up to own knowledge, no researcher as yet has pointed out these connections. Perhaps, this can be another modest endorsement of the terminology and interpretation of the eco-effectiveness metaphor vis-a`-vis eco-efficiency. 4.3. The future research Trading off the shortcomings of eco-efficiency by ecoeffectiveness seems of promising value, particularly in complex endeavors such as that of E-commerce. Both are valuable and, more importantly, they should complement each other. As E-commerce is still in the initial phases of its development, it is a good time to seize the opportunity for ‘‘designing E-commerce for environment’’. As it has been shown that an environmental assessment of E-commerce is not of great value at this stage, it is wiser to focus on guiding E-commerce during the design stage towards sustainable development, otherwise E-commerce proceeds towards satisfying market needs without considering the environment. 5. Concluding remarks It is indisputable that there is a need to consider the potential of eco-effectiveness in the dawning era of E-commerce. At the same time, it is worth pointing out that by no means would eco-efficiency be excluded from the industrial control e such is not the objective. Both represent valuable perspectives and, more importantly, each should complement the other. The need for eco-effectiveness in handling E-commerce situations becomes clear in relation to the rebound effects implications. The issue of reversing products in supply chains also justifies the need for eco-effectiveness (cradle-to-cradle thinking) if the rebound effects are taken into account when discussing Ecommerce. Yet, to achieve a greater influence, the eco-effectiveness model has to be expanded beyond its current form in order to incorporate the ‘‘human’’ dimension. This dimension involves the persistent problem of consumption. To enhance this model, this paper proposes extending the concept of ecoeffectiveness through ‘‘functionality, not possession of products’’. As a result of the research carried out, eco-effectiveness reveals a movement with ambitions similar to those of System Type III (recalling industrial ecology principles). At this early stage in the implementation of E-commerce, the opportunity exists to intervene positively in the design of E-commerce processes. Such opportunity should be seized, since present tools allow little to be gained by performing
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environmental assessment. With eco-effectiveness, as a conceptual model, there is an opportunity to ‘‘design E-commerce for environment’’. References [1] Abukhader S, Jo¨nson G. The environmental implications of electronic commerce e a critical review and framework for future investigation. Management of Environmental Quality: An International Journal 2003;14(4). [2] Arnfalk P. Virtual mobility and pollution prevention. Doctoral dissertation, International Institute of Industrial Environmental Economics, Lund University, Sweden; 2002. [3] Abukhader S, Jo¨nson G. E-commerce and the environment: a gateway to the renewal of greening supply chains. International Journal of Technology Management 2004;28(2). [4] Udo de Haes H, Lindeijer E. The conceptual structure of life cycle impact assessment. In: Towards best practice in life cycle impact assessment. Penscola: SETAC; 2002. p. 5 [chapter 8]. [5] Li Y. Greening of local E-commerce, how to realise the environmental potential of online grocery trade e a case study in the City of Lund. MSc Thesis, Lund University; 2000. [6] Punakivi M, Holmstro¨m J. Environmental performance improvement potentials by food home delivery. Journal of Industrial Ecology 2003;6(2). [7] Tuerk V. Assessing the resource intensity of the Internet structure. Master’s Thesis, International Institute of Industrial Environmental Economics, Lund University, Sweden; 2001. [8] Fichter K. E-commerce: sorting out the environmental consequences. Journal of Industrial Ecology 2002;6(2). [9] Cairns S. The home delivery of shopping: the environmental consequences. TSU Working Paper, ESRC Transport Studies Unit, University of London; 1999. [10] Rejeski D. Electronic impact. The Environmental Forum; 1999 July/August. [11] Ljones A, Nesbakken R, Sandbakken S, Aaheim A. Energy in housekeepings e the energy survey 1990 (in Norwegian). Statistical Central Bureau Report 22/92; 1992. [12] Hanssen O. Sustainable product systems e experiences based on case projects in sustainable product development. Journal of Cleaner Production 1999;7:27e41. [13] Herring H. Confronting Jevon’s Paradox: does promoting energy efficiency save energy? Speech at the 18th Roundtable on Sustainable Development, Paris 14th June, 2006. [14] Jevons WS. The coal question: an inquiry concerning the progress of the nation, and the probable exhaustion of our coalmines. 2nd ed., revised. London: Macmillan and Co.; 1866. [15] EPEA Internationale. The basics of eco-effectiveness,. Last accessed: April 2003. [16] Saghir M. A platform for packaging logistics development: a systems approach. Doctoral dissertation, Department of Design Sciences, Lund University, Sweden; 2004. [17] Slater S, Narvar J. Market orientation, customer value, and superior performance. Business Horizons 1994;37(March/April):22e8. [18] European Commission. An introduction to electronic commerce. accessible at: ; 1998. [19] Udo de Haes H. Personal communication by email in September 2002. Center for Environmental Science, Leiden University, Netherlands (Chairman of the LCA Steering Committee of SETAC-Europe, and also of the working group on Life Cycle Impact Assessment of this organisation). [20] Schenck R. Personal communication by email in September 2002. Executive director of Institute for Environmental Research and Education, a non-profit organisation that supports environmental decision-making. [21] Cambridge dictionaries, . Last accessed: September 2002. [22] Merriam-Webster dictionary, . Last accessed: September 2002. [23] McGraw-Hill encyclopedia of science and technology. 8th ed. McGrawHill; 1997.
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[24] Lawrence E, Jackson A, Jackson J. Harlow. Longman dictionary of environmental science; 1998. [25] Pfafflin James R, Ziegler Edward N. Encyclopaedia of environmental science and engineering. 4th ed. Amsterdam: Gordon & Breach; 1998. [26] Bisio Attilio, Boots Sharon. Encyclopaedia of energy technology and the environment. New York: Wiley; 1997. [27] US EPA’s glossary of environment,. Last accessed: September 2002. [28] Soil Science Society of America, . Last accessed: September 2002. [29] UNEP website, . Last accessed: September 2002. [30] Environmental Economics Glossary, . Last accessed: September 2002. [31] MBDC. Synthetic materials for eco-effective design, . Last accessed: April 2003. [32] WBCSD (World Business Council for Sustainable Development) website, . Last accessed: September 2002. [33] Fiksel J, editor. Design for environment: creating eco-efficient products and processes. McGraw-Hill; 1996. [34] North K. Environmental business management. 2nd revised ed., Geneva: International Labor Organisation; 1997. [35] Sachs W, Loske R, Linz M. Greening the north e a post-industrial blueprint for ecology an equity. translated edition. London: Zed Books Publications; 1998. [36] DeSimone L, Popoff F. Eco-efficiency: the business link to sustainable development, Published in association with the World Business Council for Sustainable Development, Cambridge; 1997. [37] Rothenberg S, Pil F, Maxwell J. Lean, green, and the quest for superior environmental performance. Production and Operations Management 2001;10(3). [38] Hamschmidt J, Dyllick T. ISO14001, profitable? yes! but is it eco-effective. Greener Management International: The Journal of Corporate Environmental 2001;34(summer issue).
[39] Schaltegger S, Sturm A. Eco-efficiency by eco-controlling. Zurich: VDF; 1998. [40] Braungart M. Ein wirtschaftssystem fur ‘intelligente produkte’ anstatt einer High-TechAbfallwirtschaft. In: Hockerts K, et al., editors. Kreislaufwirtschaft statt Abfallwirtschaft. Ulm: Universita¨tsverlag; 1994. p. 45e55. [41] Braungart M, McDonough W. The next industrial revolution. The Atlantic Monthly October 1998;282(4):82e92 (republished in a book Greenleaf Publishing 2001). [42] McDonough W, Braungart M. Cradle-to-cradle: remaking the way we make things. North Point Press; April 2002. [43] McDonough W, Braungart M, Anastas P, Zimmerman J. Applying the principles of green engineering to cradle-to-cradle design. Environmental Science and Technology 2003;37(23):434e41. [44]. Last accessed: September 2006. [45] Messerle HK. Eco-effectiveness and sustainability, 109. ATSE Focus (The Australian Academy of Technological Sciences and Engineering), ; Nov/ Dec 1999. Last accessed: April, 2003. [46] Dyllick T, Hockerts K. Beyond the business case for corporate sustainability. Business Strategy and the Environment 2002;11:130e41. [47] The Swedish Institute for Packaging and Distribution (PackaForsk). Tomorrow’s consumer and new business structures e implications for packaging. Packa Futura Report 1999, Sweden. [48] Sage AP. Systems engineering and management for industrial ecology and Sustainable Development. IEEE Symposium Proceedings; 1997. [49] Ropke I. Is consumption becoming less material? The case of services. International Journal of Sustainable Development 2001;4(1). [50] Erlo¨v L, Lo¨fgren C, So¨ra˚s A. Packaging e A tool for the prevention of environmental impact. Packforsk Report 194 (The Swedish Institute for Packaging and Distribution); 2000. [51] Ayres RU. Products as service carriers: should we kill the messenger e or send it Back. INSEAD working paper series 2000/36/EPS/CMER, France; 2000. [52] Graedel TE, Allenby BR. Industrial ecology. Upper Saddle River, NJ: Prentice Hall; 1995.
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Eco-efficiency in the era of electronic commerce e should ‘Eco-Effectiveness’ approach be adopted? Sajed M. Abukhader* University of Dubai, College of Business Administration, United Arab Emirates Received 17 October 2006; received in revised form 26 March 2007; accepted 6 April 2007 Available online 6 June 2007
Abstract In the 1980s, when PCs were first introduced, a vision arose of the ‘‘paperless office.’’ Yet, it did not yield the anticipated environmental benefits. Nowadays, such optimism about the implications of information technology, and in particular, E-commerce continues to proliferate today. But will E-commerce turn out to be a success story, or another unrealised utopia? Drawing on content analysis and concept development methods, this paper discusses a number of observations of interest in the literature that, taken together, point out that eco-efficiency is not sufficient to be the leadership strategy of choice for forecasting and reducing environmental damage arising from the implementation of E-commerce. Rather, utilizing an emerging concept of eco-effectiveness together with eco-efficiency may offer a model for managing the environmental consequences of E-commerce. Yet, to wield more influence, the current concept of eco-effectiveness needs to be expanded in order to complement e and not to replace e eco-efficiency. Ó 2007 Elsevier Ltd. All rights reserved. Keywords: Eco-efficiency; Electronic commerce; Eco-effectiveness; Supply chain management; Environmental assessment; Life cycle assessment
1. Introduction Today, a great deal of optimism surrounds electronic commerce and other information technology-based fields, particularly in relation to the possibility that they may yield important environmental benefits [1]. At the same time, there exists a risk that this optimistic trend, especially in the context of electronic commerce (E-commerce) and its impact on the economy, may become a sort of elusive utopia. When the personal computer was first introduced in the 1980s, a vision emerged of the ‘‘paperless office.’’ Unfortunately, and despite expectations, developments at present tend to indicate that what was anticipated is not being realised [2]. E-commerce is a very recent field, and is still in the process of development. In fact, no one can say when or how stabilisation will occur, nor can predict with accuracy the number of ramifications that E-commerce may involve, given the wide range of processes and supply chains implicated [1,3]. The potential * Tel.: þ971 50 7873571; fax: þ971 4 2242151. E-mail addresses: [email protected], [email protected] 0959-6526/$ - see front matter Ó 2007 Elsevier Ltd. All rights reserved. doi:10.1016/j.jclepro.2007.04.001
impact is so great e much greater than it would have been for the paperless office e that it could affect the whole economic system (the sum of all product systems [4]). Of course, it would be better if we had some idea of our ‘‘grip’’ e or level of control e on the consequences of the proliferation of E-commerce. One way to comprehend the nature of the ‘‘grip’’ on the potential outcomes is to examine the tools used to measure performance. In doing this, one inevitably runs into two commonly used terms: efficiency and effectiveness. In this regard, two issues arise. First, there already exists an established term for environmental efficiency, ‘eco-efficiency,’ but the analogous term addressing environmental effectiveness, ‘eco-effectiveness,’ is not in common use. ‘Eco-effectiveness’ is still seen as a metaphor. Secondly, research into environmental assessment runs into many limitations and difficulties in attempting to reach a consensus concerning the environmental outcomes of implementing E-commerce, as well as in specifying the scope and boundaries of assessment [1,3]. Could the above concerns indicate a problem in strength with the current environmental approach towards such
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a challenging trend as E-commerce? Addressing this question involves investigating two questions, which constitute the purpose of this paper:
to E-commerce. Rebound effects are considered one form of implications of E-commerce, which are usually categorised into three forms [5,6,7,8,9]:
What does the literature say about the terminology available? Given that the body of knowledge as it now exists relies on only one dimension e that of eco-efficiency e does it offer adequate control?
a. The impact of the infrastructure of E-commerce (installed cables, PCs, hardware, etc.), b. The impact of the use of E-commerce (affecting various industrial processes of production, transportation, packaging, warehousing, etc. Several challenging trends can be expected, for example, differentiation (as opposed to standardisation) of products and packages, mass customisation, centralisation of warehousing, etc.), and c. The impact of rebound effects, for instance: Substantial changes in consumption patterns, always difficult to predict; The overwhelming number of returns of unwanted or defective products; The supplanting of shopping trips by leisure or other types of trips.
Ultimately, the goal of this paper is to explore whether the concept of eco-efficiency can stand as the only criterion for examining and dealing with the topic of E-commerce from an environmental perspective. In addition, this paper proposes a framework for developing/extending the dimension of ‘eco-effectiveness,’ offering a necessary, complementary (to eco-efficiency) binocular for examining the environmental consequences of E-commerce. It is nevertheless beyond the scope of this paper to compare eco-effectiveness with ecoefficiency or to propose that either term replace the other; indeed, this paper emphasises the fact that the two terms complement each other. 2. Research method This paper makes use of a mix of two research methods, content analysis and concept development, in order to find and analyse lines of interest in the environmental literature that intervene against eco-efficiency as the sole framework for examining the environmental consequences of E-commerce. This research does not encompass the entire body of knowledge in environmental management, E-commerce, or supply chain management, but rather brings together a number of remarks, all of which show that the concept of eco-efficiency alone is not in itself sufficient to appraise E-commerce. As a result of the analysis, and with the aid of concept development, a framework is proposed for developing and extending the concept of eco-effectiveness so as to more suitably fit the conditions of E-commerce. 3. Results and discussions The analysis of the literature reveals that: It is questionable whether eco-efficiency alone can deal adequately with environmental outcomes arising from Ecommerce without involving the other logical dimension, effectiveness (Section 3.1 and 3.2), and Environmental effectiveness, as a term, and ‘eco-effectiveness’ are not functioning in common paradigm (Section 3.3). 3.1. Rebound effects Rebound effects represent one of the primary issues in determining that eco-efficiency is not the sole strategy of choice for forecasting and reducing the environmental damages due
At present, it is generally anticipated that E-commerce will yield great environmental benefits in terms of resource use. Its proponents believe, for example, that private transport (via private cars) will be considerably reduced, that mass production will shift into mass customisation e thus saving resources due to lower inventory levels and less waste generation throughout the life cycle e and that paper consumption will decline dramatically [8]. It has been foreseen that E-commerce will contribute to a dramatic reshaping of future cities [10]. Support for such claims is, however, mostly anecdotal or mere speculation [1,8,10]. There are, as well, opponents to E-commerce who are not optimistic, though their contentions are also lacking in evidence. Rebound effects, being one of the primary drawbacks associated with the use of E-commerce, represent an issue of concern in any attempt to arrive at a consensus. It has been found that whenever technology becomes more efficient, this improvement is usually accompanied by an increase in its use in order to improve the quality of life and make it more comfortable. For instance, in Norway, energy consumption per household rose rather than declined when energy conservation schemes in private buildings were introduced [11,12]. Further, improvements in fuel efficiency achieved over the last 10 years have been counterbalanced by the escalating number and use of vehicles [12]. These observations are not unique on the global scene; there are similar cases elsewhere, especially in the OECD countries [13]. Such observations are in fact not new; the Jevons Paradox, named for William Jevons, states that an increase of efficiency in the use of a resource may actually lead to an increase in the total consumption of that resource [14]. This is well-accepted by modern economic theory. In the E-commerce era, it is likely that people will travel for leisure or for other similar reasons; such travel will replace the decrease in shopping trips (due to home delivery) [9]. It is probable that people will print out online sales catalogues, and that retailers will print out online orders. It is foreseen as likely that people will buy and consume more and more
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[5,6,7]. Moreover, one important trend expected in the next few years is an increase in mass customisation (as opposed to mass production). Although it is anticipated to be worthwhile from an environmental point of view (since waste is reduced throughout the life cycle), there are hidden negative consequences. The effect in this situation is similar to that of, for example, reducing sewage effluent from textile finishing while at the same time increasing the amount of additives used in textiles, thus ending up with a non-recyclable product (example taken from Ref. [15]). Another line of interest regarding rebound effects concerns reverse logistics (which is an issue of ongoing modeling research work on various possibilities with E-commerce). As reverse logistics is a possible facilitator for the recycling/recovery of products, there can be two scenarios for how the recycled material will end up. ‘‘It is important to use recovered materials primarily as a substitution for virgin materials in meeting the existing demand in the market, and not provoke new demands to find a use for recovered materials’’ [12]. ‘‘Substitution for virgin materials’’ denotes eco-effectiveness (defined Section 3.3.3 e ‘‘cradle-to-cradle’’ cycle), and ‘‘provoke new demands’’ implies rebound effects. What might promote the embrace of eco-effectiveness approach is the development of ‘‘better channels for environmental information and feedback loops’’ with the power of Internet [12]. On that account, ecoeffectiveness gains a greater credibility in being considered along with eco-efficiency in the context of E-commerce. 3.2. E-commerce and LCA The considerable limitations involved in using life cycle assessment (LCA) for evaluating the environmental implications of E-commerce (impacts categorised earlier in ‘a’ and ‘b’) [1,3] are another reason why E-commerce cannot be adequately dealt with from the perspective of eco-efficiency alone. The main problem is that LCA (which accompanies eco-efficiency in the paradigm of industrial ecology) is only able to accommodate one chain of assessment at a time, and thus has limited scope, which means that there is a very high probability of missing the changes that take place in many other interconnected chains and which happen as a result of a change in the assessed chain. It must be remembered that E-commerce is a matter of many supply networks affecting the whole economy. For this reason, eco-efficiency does not reveal itself to be in a strong position for leading research into the areas of E-commerce and the environment. In fact, when looking into the field of management of supply chains, one realises through a number of remarks that embracing ‘effectiveness’ term is necessary for complementing the total understanding once using the term, eco-efficiency. 3.2.1. Efficiency in supply chain management While the field of supply chain management (SCM) (which is relevant to E-commerce) offers a comprehensive view of efficiency and effectiveness, the environmental paradigm embraces only one dimension (efficiency) without the other (effectiveness). In SCM, efficiency and effectiveness
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are both utilised and defined. ‘‘Efficiency is related to the internal activities of a company or a supply chain, while effectiveness is externally related.’’ ‘‘Efficiency should (.) be measured internally, while effectiveness is best measured at the interface with end-customers’’ (Fig. 1) [16]. Actually, as in Slater and Narvar [17], efficiency and effectiveness are considered two critical dimensions of customer value. In other words [16]: Efficiency: Doing things in the right way (comparing output to input). Effectiveness: Doing the right things (comparing an accomplished work to a planned target). Thus, both terms are necessary and that they are neither similar nor equivalent, but actually complementary. The picture will be incomplete if one considers only one without the other. 3.2.2. Process vs. strategic focus Since efficiency is a process level issue (concerned with evaluating internal processes) and effectiveness is a strategic level issue (evaluating the total outcome and achievement of the goals and vision), discrepancies will occur if the efficiency approach alone examines the consequences of E-commerce. In the same time, E-commerce e defined as: ‘‘any form of business transaction in which the parties interact electronically rather than by physical exchanges or direct physical contact’’ [18] e is a topic of potentially wide-scale impact across various supply networks/chains. This fact underlines the need for the complementary approach of effectiveness to achieve an aggregate level of assessment. Therefore, efficiency and effectiveness are definitely complementary to each other; to investigate the environmental implications of E-commerce, both concepts are needed. 3.3. The available definitions This section investigates four forms of terminology: ‘environmental efficiency’, ‘environmental effectiveness’, ‘eco-efficiency’, and ‘eco-effectiveness’. The aim is to see which of these terms are recognised and in common use, and to determine if they can be distinguished from one another. The search
Fig. 1. Measuring efficiency and effectiveness in supply chains (After Saghir, 2004) [16].
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was triangulated across three types of sources: specialised dictionaries, experts (one academic and one professional), as well as certain relevant references. 3.3.1. Definitions from specialised dictionaries and experts Table 1 and Fig. 2 present a number of definitions aggregated from several sources. From the table and the figure, it can be seen that there is no complementary corollary ‘ecoeffectiveness’ for the known term ‘eco-efficiency’. Also, it is noted that there is no prevailing environmental interpretation of the concept effectiveness.
term for more than a decade. WBCSD considers an ‘ecoefficiency portfolio’ (where the environmental burden and the total economic costs are plotted on a two-axis graph) a key to determining a product’s environmental efficiency [32]. Some of the definitions found for eco-efficiency include the following:
3.3.2. In relevant references The term most commonly seen in several references is, in fact, eco-efficiency. Focusing on reducing the environmental waste of industrial processes, eco-efficiency has been widely hailed as the approach of choice for environmental leadership [31]. The World Business Council for Sustainable Development (WBCSD) has promoted this
1. ‘‘The ability of a managed entity to simultaneously meet cost, quality, and performance goals, reduce environmental impacts, and conserve valuable resources’’, where the ‘‘entity’’ is a product or a process [33]. 2. ‘‘Eco-efficiency, cleaner production and lean production are based on a common philosophy: to reduce waste in all steps of a production process. Eliminating waste will lead to improvements in eco-efficiency and thus contributes to: less energy consumption, less waste material, less materials handling, and less intermediate storage’’ [34]. 3. The ‘‘call for a new management philosophy aimed at steering the course of a company in a direction that will
Table 1 Summary of the definitions of the terms environmental efficiency and effectiveness Name of dictionary
English dictionaries
Cambridge dictionaries [21]
Merriam-Webster dictionary [22]
The definitions Efficiency
Effectiveness
‘‘The efficiency of a machine or an engine is the difference between the amount of energy that is put into it in the form of fuel, effort, etc. and the amount that comes out in the form of movement’’ ‘‘Productive without waste’’
‘‘Something can be described as effective if it produces the results that it was intended to’’
It is rather an economical term presented as ‘Cost-effectiveness’ to describe how much a process is ‘‘economical in terms of tangible benefits produced by money spent’’
Engineering encyclopaedias
Mc Graw-Hill encyclopaedia of science and technology [23]
The common meaning is ‘‘the ratio expresses as a percentage, of the output to the input of power (energy or work per unit time)’’
Described through a phrase ‘effective dose’: ‘‘to characterize the potency of a drug by the amount required to produce a response in 50% of the subjects to whom the drug is given’’
Environmental dictionaries
Longman dictionary of environmental science [24] Encyclopaedia of environmental science and engineering [25] Encyclopaedia of energy technology and environment [26]
None
None
None
None
The general common meaning as being the measure of the body’s performance e the ratio of output over input None
(in the environment section of the Encyclo.) We find only the term ‘cost-effectiveness analysis’a None
None
None
‘‘How cost-effectively inputs are converted into outputs and results are achieved’’ ‘‘The allocation of goods to their uses of highest relative value’’b
‘‘A measure of the extent to which a project or programme is successful in achieving its results’’ None
US environmental protection agency (a website glossary) [27] The soil science society of America (a website glossary) [28] U.N. Enviro. Prog. (A Projects’ Manual on the Net) [29] Environmental economics glossary (a consultancy website) [30]
a This analysis ‘‘involves comparison of the costs of alternative approaches to achieving a specific objective, e.g., a reduction in pollution. Unlike benefit-cost analysis, which requires monetization of both the benefits and costs of the proposed action, cost-effectiveness analysis does not require that benefits be expressed in monetary terms. Instead, benefits are expressed as the reduction in different types of damages or sources of damages, e.g., decreased risk of mortality or decrease in the concentration of the pollutant in a body of water. A cost-effectiveness can be assessed by choosing a target level of effectiveness (or goal) for which the least-cost alternative is identified’’. b ‘‘Allocative efficiency: Obtaining the most consumer satisfaction from available resources’’ [30].
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An academic scholar [19]
“The distinction between efficiency and effectiveness must come from economy. But the terms are not always sharp there. Effectiveness: the degree to which you reach your aim. Efficiency: the same, but then divided by the costs.”
An environmental expert [20]
“Environmental efficiency refers to products and processes that provide goods and services with lower environmental impacts. An example is a fluorescent light bulb, which produces the same amount of light while using 1/4 or the electricity used by an incandescent light bulb. Environmental efficiency is also called eco-efficiency. Environmental effectiveness is not a term of practice, so its meaning will depend on its use. Possibly it refers to eco-efficiency. Possibly it refers to environmental engineering or management techniques that support environmental quality”
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Fig. 2. Definitions of efficiency and effectiveness from two environmental experts through personal communications [19,20].
reduce the overall input of nature per unit of output’’ is the aspiration of the term eco-efficiency. This term represents ‘‘an overlap between economic efficiency and ecological efficiency’’ [35]. 4. ‘‘It has been developed by business for business. The first word of the concept encompasses both ecological and economic resources e the second says we have to make optimal use of both. One important aspect of eco-efficiency in practice is resource productivity e doing more with less. Reducing waste and pollution, and using fewer energy and raw material resources, is obviously good for the environment, and making better use of inputs translates into bottom-line benefits. These benefits potentially will increase as governments implement plans to change market frameworks in order to make resources and pollution more expensive. Eco-efficiency focuses as well on creating additional value by better meeting customer needs while maintaining or reducing environmental impacts’’ [36]. To summarise, ‘‘eco-efficiency is reached by the delivery of competitively priced goods and services that satisfy human needs and bring quality of life, while progressively reducing environmental impacts and resources intensity throughout the life cycle, to a level at least in line with the earth’s estimated carrying capacity’’ [36]. 5. ‘‘The reduction of environmental impact through more efficient use of materials and natural resources in manufacturing, is driven in large part by process and operational decisions that would fall under the category of pollution prevention’’ [37]. The term ‘environmental effectiveness’ has been used in the literature limited to the application of environmental management systems. For Hamschmidt and Dyllick [38], ‘‘‘effectiveness’ here means ‘doing the right things’ in order to reach absolute improvements of environmental performance. This goes beyond the common understanding of eco-efficiency (‘doing the things right’), which generally aims at reducing negative environmental impacts per unit of output’’, as clearly seen in the definitions above for eco-efficiency. When evaluating the statements in the above various references, one finds that there is a general consensus that efficiency basically means measuring output to input, while for effectiveness the available definitions are not in concordance. At times, effectiveness is seen as an economic issue; elsewhere
it becomes the achievement of goals, and at other times it appears to be with no practice. 3.3.3. Search for ‘Eco-effectiveness’ An intensive search in various journal databases revealed that the term ‘eco-effectiveness’ seems to be an emerging concept, which has been adopted limitedly in: Schaltegger and Sturm (1990, 1992, and 1998) as being complementary to the economic value orientation of eco-efficiency [39], and Braungart and McDonough (Braungart, 1994; Braungart and McDonough, 1998; McDonough and Braungart, 2002; and McDonough, Braungart, Anastas and Zimmerman, 2003) [40,41,42,43] to identify a different concept from eco-efficiency. The examples, through which this concept is explained, commonly deliver a message that ‘‘long-term prosperity depends not on the efficiency of a fundamentally destructive system, but on the effectiveness of the processes designed to be healthy and renewable in the first place. Eco-effectiveness celebrates the abundance and fecundity of natural systems, and structures itself around goals that target 100 percent sustaining solutions’’ [42]. The basic idea is that eco-effectiveness ‘‘leads to human industry that is regenerative rather than depletive,’’ and ‘‘from an industrial design perspective, it means products work within cradle-to-cradle life cycle rather than cradle-to-grave ones’’ [31]. In other words, products are designed to be discharged into the environment, and absorbed by it [44]. One may argue that linking the term to ‘‘cradle-to-cradle’’ seems unclear especially since eco-efficiency also is concerned with recycling. However, eco-efficiency aspires to promoting ‘‘the minimisation’’ approach toward waste disposal and not to centrally recycling it. Recycling is considered important since waste contains valuable and rare materials in many instances. ‘‘Eco-efficiency optimises efficiency and environmental impact, and thus it only reduces the waste associated with industrial activity but does not eliminate it. Hence, it only delays an eventual ecological decline’’ [45]. ‘‘Although the debate about eco-efficiency is by far from over,’’ Dyllick and Hockerts [46] argue in their paper, the ‘‘issue of eco-effectiveness deserves equal scholarly attention’’ [46].
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4. Extending eco-effectiveness 4.1. Consumption behavior Despite its relative success in confronting rebound effects, eco-effectiveness still lacks the human side as a direct influence. This is because with eco-effectiveness the consumption behavior issue is not as yet solved; it is only the technical problem, which involves materials and a ‘‘complete recycling system’’ (‘‘cradle-to-cradle’’), that gets solved. Buying and consuming may still increase, which means there will still be an increase in the consumption of natural resources (particularly the non-renewables), especially via processes that handle material recovery/recycling and perform transportation from ‘‘grave’’ back to ‘‘cradle’’. For instance, there is a belief [46] that the current focus might shift from the efficiency of fossil fuels to the effectiveness of solar cells. However, the abundance of energy that solar cells will produce might in itself create a considerable increase in electricity consumption as people use the infrastructure and consequently as well the impact of large scale production of solar cells themselves. Still, it can be argued that if the solar energy system is standardised and has ‘‘complete’’ recycle-ability (according to the concept of eco-effectiveness), then the impact of production might be negligible. Another consideration along the same line is that one of the main advantages of E-commerce transactions (from an SCM/business point of view) is to respond to customers’ demands effectively. This is likely to lead to a higher level of differentiation of products and packages [47], and may in fact engender more complication and place further demands on the recycling goals of eco-effectiveness. This paper therefore proposes that eco-effectiveness should attempt to potentially reengineer consumer culture and sociology so that consumers pay more consistent attention to the functionality of products or services they pay for rather than just accumulating products as possessions [48]. Thus, the idea in this connection is to promote the slogan ‘‘functionality and not possession’’ [48]. This can happen if the device that produces a service is shared instead of being purchased by each individual, or many individuals purchasing the service from the owner of the device. One example is car pools, which involves sharing of automobiles: a group of people reserves one or two cars for their use at any time for a small monthly or annual fees. Although changing people’s attitudes is not an easy task, the interest and aim should be to make ‘‘functionality’’ more attractive, challenging the wish for ‘‘more products’’. Ropke [49] in her review states that ‘‘some people hope that the consumption patterns will change, almost by themselves, in a more sustainable direction, because consumers come to a certain degree of satiation with material goods and therefore demand non-material services’’. However, Ropke [49] points out that ‘‘the contribution from private services has been limited’’, and that ‘‘future possibilities of increasing environmentally benign services meet serious limitations, so active policies are needed to overcome these’’.
Still, the above thinking (‘‘functionality and not possession’’) shall be complemented with considering various means of extending lifetime of those products by reusing, repairing, remanufacturing, etc. This is because if the product is consumed in a relatively short time, then its value will finally be lost. Yet, it must be mentioned that in some situations, dumping is more efficient and more cost-effective. Returnable packages, for instance, have not yet been proved to be an environmental choice vis-a`-vis one-way packages [50]. For mass-produced items such as complex appliances or certain vehicle parts, repair is not cost-effective in comparison to dumping, although there is still a good potential for repair/renovation if manufacturers are given incentives [51]. Functionality remains a relevant issue since E-commerce is expected to motivate an increase in outsourcing and third party growth, which are just simply synonyms for the functionality/leasing idea. One may argue that functionality is already being promoted due to the use of the term ‘sufficiency’ in response to the topic of consumption [35] (Fig. 3). However, this is in fact ‘‘an issue of individual choice rather than a single firm’s responsibility’’ as most advocates see sufficiency [46]. Although it has a value in influencing the consumer’s attitude, it is not a part of ecoeffectiveness. 4.2. System type III In industrial ecology, three ecosystem types are defined [52]. ‘‘A traditional Type I system is one in which the input of natural resources and output of wastes are not, fundamentally, considered except in an economic fashion, and where there is flow of materials from one life cycle production process to the other. This is essentially an inactive approach to sustainability although it can become reactive through imposition of command and control such as pollution constraints’’ [48]. ‘‘A Type II industrial ecological system is one in which there is recycling of wastes and reuse of by-products of one process, either in the same process, or in another one, in order to reduce the resource input requirements and the output waste by-products of the several processes’’. ‘‘Process redesign and
Fig. 3. Overview of the six criteria of corporate sustainability [46].
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reengineering can potentially enable the Type II system to become a Type III system in which the overall industrial ecological system is closed and there are no (un-renewable) resource requirements and no waste products. This is a proactive approach to industrial ecology and one that ultimately leads to simultaneous human socio-economic development and sustainability’’ [48]. This research finds that in fact eco-efficiency attempts to promote System Type II of industrial systems, while eco-effectiveness is instead related to Type III; up to own knowledge, no researcher as yet has pointed out these connections. Perhaps, this can be another modest endorsement of the terminology and interpretation of the eco-effectiveness metaphor vis-a`-vis eco-efficiency. 4.3. The future research Trading off the shortcomings of eco-efficiency by ecoeffectiveness seems of promising value, particularly in complex endeavors such as that of E-commerce. Both are valuable and, more importantly, they should complement each other. As E-commerce is still in the initial phases of its development, it is a good time to seize the opportunity for ‘‘designing E-commerce for environment’’. As it has been shown that an environmental assessment of E-commerce is not of great value at this stage, it is wiser to focus on guiding E-commerce during the design stage towards sustainable development, otherwise E-commerce proceeds towards satisfying market needs without considering the environment. 5. Concluding remarks It is indisputable that there is a need to consider the potential of eco-effectiveness in the dawning era of E-commerce. At the same time, it is worth pointing out that by no means would eco-efficiency be excluded from the industrial control e such is not the objective. Both represent valuable perspectives and, more importantly, each should complement the other. The need for eco-effectiveness in handling E-commerce situations becomes clear in relation to the rebound effects implications. The issue of reversing products in supply chains also justifies the need for eco-effectiveness (cradle-to-cradle thinking) if the rebound effects are taken into account when discussing Ecommerce. Yet, to achieve a greater influence, the eco-effectiveness model has to be expanded beyond its current form in order to incorporate the ‘‘human’’ dimension. This dimension involves the persistent problem of consumption. To enhance this model, this paper proposes extending the concept of ecoeffectiveness through ‘‘functionality, not possession of products’’. As a result of the research carried out, eco-effectiveness reveals a movement with ambitions similar to those of System Type III (recalling industrial ecology principles). At this early stage in the implementation of E-commerce, the opportunity exists to intervene positively in the design of E-commerce processes. Such opportunity should be seized, since present tools allow little to be gained by performing
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