Quantifying the Climate Impact Potential of Asia’s Circular Economy with Carousell
Calculating the Avoided Emissions and Replacement Rate of Purchasing Second-Hand Items for Carousell Group
The benefits of the circular economy transition could well be the most powerful tools we have to slow down the climate crisis, and adoption starts with knowledge sharing and awareness. At Vaayu, we have worked extensively to calculate the benefits of circular economy looking at the avoided carbon emissions of shopping second-hand versus new, and this partnership with Carousell Group pioneers our in-house expertise and state-of-the-art technology in a scaled expansion across six out of seven Asian markets, driving data insights around avoided carbon emissions to help new markets understand the potential benefits of circular economy business models at scale.
The first chapter of the strategic three-year partnership saw the release of Carousell Group's Circular Economy Business Impact Report, powered by Vaayu, quantifying the net climate impact and potential avoided carbon emissions of its platforms to provide unrivaled data accuracy and a comprehensive overview of the Group’s overall footprint.
Understanding the Climate Impact Potential of Circular Business Models
Research continues to show that we are not on track to keep global warming below 1.5C and that we’re at a critical inflection point. With retail alone responsible for 25% of global carbon emissions, circular economy business models, like recommerce, offer a clear and viable path to reducing impact on the planet and creating a more circular economy approach to a product life cycle. Until now the traditional approach has been linear, for example the Take-Make-Use-Waste model. At the same time, a lack of awareness of the impact this has on the Earth and its natural resources has dominated our economies, with credible data-led insights on potential being limited, one of the challenges to the adoption of circular economy models.
By accurately quantifying avoided emissions, retailers have the opportunity to open doors to the historic challenges to circular economy and pave the way for quantifying the emissions that can be saved through circular economy life cycles when choosing second-hand over new, further advancing the shift to circular economy models.
Using LCA to Power Cradle-to-Consumer Impact and Avoided Emissions Calculations
The methodology employed elements from consequential circular economy and life cycle assessment (LCA), a leading global method for calculating avoided emissions that looks beyond a single product or transaction with the objective of quantifying the impacts within a broader system.
In order to provide insight into the avoided emissions at product category level, Vaayu calculated the product carbon footprints of comparable new products and quantified the emissions from deliveries, packaging and operations (Scope 1 and Scope 2) for each second-hand product to position circular economy as a solution.
Obtaining granular detail to inform calculations at an LCA cradle-to-consumer level was only possible using Vaayu’s automated and scalable proprietary AI and machine learning technology, backed by its in-house LCA cradle-to-consumer expertise, to compute the product carbon footprints of secondhand items purchased across four retail verticals in three of the Group’s marketplaces in 2022 with unrivaled accuracy. This covers approximately 31% of the total GMV transacted on the marketplaces in 2022.
To account for actual customer purchasing behavior, Vaayu and Carousell implemented a circular economy and life cycle assessment informed by insights from almost 14,000 Carousell users on how often customers avoid the purchase of a new product by shopping second-hand. Studying user behavior and sourced primary data to highlight circular economy solutions, Vaayu calculated the Displacement Rate by market and product category.
The methodology was guided by global standards on calculating comparative product emissions to provide the most accurate data available via LCA at a cradle-to-consumer level.
Elevating Circular Business Models as a Viable Framework for the Future
With the publication of Carousell Group’s Circular Economy Impact Report, Vaayu’s life cycle data is paving the way for businesses and consumers alike to understand the environmental impact of products, benefits of circular business models and the potential CO2 emissions avoided through data-driven insights that have the potential to drive awareness and adoption of the circular economy life cycle approach.
There was no existing research on CO2 emissions avoided and category-specific Displacement Rates at scale in the seven markets that make up Carousell Group’s operations, positioning the report as a significant contribution to understanding the environmental impact of products and to good practice in the sector, confirming Vaayu’s creation of the biggest primary dataset in Asia.
First-of-its-kind research helping Asia to understand the impact of shopping second-hand versus buying new
Calculated based on ~14,000 survey responses as part of the biggest primary dataset in Asia, marking a significant contribution to understanding category-specific and market-specific Displacement Rates
Empowering businesses and consumers alike to take a more proactive role in the circular economy by educating and informing
Scaling technology across 7+ retail verticals, expanding to Asia offers Vaayu the opportunity to propel forward its global mission to help retail avoid 1 gt of carbon by 2030, while pioneering the quantification of circular business models for a whole new continent.