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June 06, 2003
Book Review: Eco-Service Development: Reinventing Supply and Demand in the European Union
    by William Baue

A new book presents the business case for promoting sustainable development through "eco-services," or the switch from a product-oriented to a service-oriented culture.

Remember when Ma Bell used to rent out telephones? Those heavy rotor-dialers used to last forever, it seemed--my grandmother continued to use what looked like a 1940s model until the 1990s. This used to be called common sense.

Now, it's called "eco-service," or emphasis on the sale of product use rather than on the sale of the product itself, a system that stands to benefit the environment by stemming the flow of materials that litter the earth. This innovative economic restructuring may prove a necessary component in achieving true ecological sustainability, according to the authors of Eco-Service Development: Reinventing Supply and Demand in the European Union.

The book cites a case from Germany similar to the one above, where Deutsche Telekom (ticker: DT) rented out phones until 1990.

"When a telephone ceased to work, it was exchanged immediately free of charge," the book states in a quotation. "Accordingly, the telephones were robust and long-lasting."

"The average time of use was 12 years," the quote continues. "Since the monopoly on telephones was lifted, the market has been flooded with telephones with no comparable life expectancy."

By 1991, the average life expectancy of phones in Germany fell to 8 years, and by 1995, it plummeted to 5 years. Telephone manufacturers profited from quicker turnover of phones, but at the expense of the environment, which absorbed not only the used phones but also the emissions from increased production.

This increasing obsolescence is anathema to sustainability, a fact that prompted the European Commission to initiate a study of how eco-services might promote sustainable development in the European Union. The six authors of the book, who hail from Austria, Germany, the Netherlands, and Spain, conducted research for the project in these countries from 1998 through 2000.

In essence, the book presents the business case for employing eco-services, which include renting, leasing, sharing, and pooling. The research is incredibly thorough and the presentation is measured. If anything, the book presents too much data, practically drowning the reader in charts and graphs. And while the language is precise, it lacks the descriptive flair necessary to breathe life into this issue.

The bulk of the book analyzes the six areas that show the most promise for incorporating eco-services, namely, in the pooling, renting, sharing, or leasing of cars, washer/dryers, do-it-yourself (DIY) equipment, online services, energy supply, and sports equipment. Each section discusses the situation in depth, taking into consideration such issues as market penetration and environmental relief potentials.

What's interesting about the book is its candor: it details the liabilities and benefits of eco-services with equal consideration. Most fascinating was its repeated discussion of a primary obstacle to eco-services, namely the psychological attraction of product ownership, which confers social status on the owner. (It also happens to be more convenient to own your own car, skis, and washing machine.) However, the book also points out many benefits of eco-services: why buy a hedge trimmer that gets used twice a year when renting it is much cheaper, even in the long term?

The book does not act as a cheerleader for eco-services. In fact, it concludes that eco-services fill only a niche role in the market, and are not the final solution to the current ecological crisis.

"Eco-services are not generally an alternative to buying products," the book states. "Eco-services are not the ultimate way of achieving a sustainable level of consumption."


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