Abstract for:Diffusion Challenges of Circular Economic Products

Today’s technology already allows some of the commercial products to be fully recycled through a closed-loop supply chain. However, despite many technological and commercial effort, such products are often prone to low market penetration and fail to reach a critical mass before their business become self-sustaining. To investigate why and to gain insight for an effective policy strategy, a diffusion process of such “circular economic” product is modeled and analyzed. For model case, a textile product chemically recycled through a closed loop supply chain is considered. The simulation revealed that a diffusion of such products are both enabled and constrained by reinforcing loops originating from the installed capacity for production and collection, as well as accumulated social recognition such as trust of the product. As conclusion, the path dependent nature of the process is identified as the main hurdle for the diffusion, and therefore a policy to reduce it by introducing a powerful balancing loop (budget allocation via taxation) is discussed.