Two life cycle assessment (LCA) based methods to analyse and design complex (regional) circular economy systems. Case: making water tourism more sustainable

There is a need for metrics to analyse complex business models in the circular economy. Life cycle assessment (LCA) currently is the best defined system to analyse the environmental aspects, and is capable to analyse circular systems, Product Service Systems, and systems for recycling. However LCA falls short of analysis of the added value of business models. Since new sustainable business models are part of the transition towards a circular economy, there is a need for combined analyses of value and eco-burden. This paper applies the LCA-based Eco-costs Value Ratio (EVR) Model to analyse potential negative environmental effects of business initiatives on a system level, and to provide a theoretical approach to the design of sustainable business models by means of a three dimensional approach of costs, eco-costs and market value. Two methods are applied for analysis and design: Eco-efficient Value Creation (EVR benchmarking) and the Circular Transition Framework (describing stakeholder activities which are required for the transition towards sustainable business models). The practical case of the analysis, design and implementation of a business model for sustainable water recreation in Friesland (a province in the Netherlands) is used to validate the usefulness of these two LCA-based methods. The conclusion is that the approach of Eco-efficient Value Creation helps to avoid many pitfalls of the design of circular business models (e.g. having a positive result on product level, but having a negative effect on societal level; having a positive effect on the environment but having insufficient customer perceived value to overcome fierce market competition). The Circular Transition Framework reveals pitfalls and opportunities in implementation (e.g. the coordination between business models and governmental policies). (C) 2015 Elsevier Ltd. All rights reserved.