Product Life Cycle in the Circular Economy: Economic Priorities vs. Environmental Priorities

Abstract

Purpose: The aim of the study is to develop and justify the preference for a new market mechanism to manage the transition to a multiple product life cycle, allowing not to disguise, but really resolve the conflict between economic and environmental priorities. Design/Methodology/Approach: In the work the method of correlation analysis is applied, with the help of which the contribution of each of the alternative mechanisms in achievement of results of management of transition to multiple life cycle of production is defined. In order to obtain more accurate data, an additional assessment of product life cycle efficiency is carried out using game theory methodology. The assessment is carried out on a single product life cycle (based on data for 2019) and on a multiple product life cycle under the control of the regulatory mechanism and market mechanism. Findings: It has been proved, that in a circular economy a multiple product life cycle is most preferable, involving environmentally efficient and responsible production and consumption using recycled resources and energy, and the transfer of all waste to recycling. The accelerated and most effective transition to a multiple product life cycle is achieved through a market-based management mechanism, as evidenced by its significant contribution to renewable energy production and waste savings. Originality/Value: For practical purposes of the research the management model of multiple life cycle of products in the circular economy of the region based on the market mechanism was developed. In the model specific features of product life cycle which appear at market management are designated. These include organizational support of circular practices in the special economic zone or cluster by state economic regulators of the region, mutual organization of supporting recycling activities by integration association enterprises and their mutual marketing of the circular economy, as well as the necessary infrastructure support of the circular economy in full.