Once we have gained a more detailed understanding of a company's circular business model, it is also important to think critically about the effect of the business models. There might be drawbacks, trade-offs, or ways in which the positive effects of circularity could be undermined. Assessment of the environmental performance of circular business models is important because the environment improvements are not realized by default, and it is important to think critically. While we generally assume that narrowing, slowing, or closing resource reduces environmental impacts, there are exceptions. Sometimes there are trade-offs, where some types of environmental impacts are reduced but others are increased. Sometimes, the full potential environmental benefit is not achieved. Let's discuss some examples of this in more detail. A momentum benefits can be undermined if the processes needed to get products or materials to suitable state or location for reuse, have a higher environmental impact than the impacts from production of a new product. Only products parts or materials that satisfy users functional and aesthetic requirements will actually be reused, and it is only then that the secondary prediction can replace high-impact primary production. Therefore, instance some material recycling processes that are highly energy intensive and may have environmental impacts that are higher than those of the production of new materials. Another example, is the case of products that consume a lot of energy. Environmental benefits from prolonging the life of these products, can be undermined where products have rapid improvements in use phase energy efficiency. There might be a trade-off between the benefits of less material resource use from prolonging the life of products, and the energy saved from replacement with more efficient products. How big the trade-off is, depends on factors like the rate of efficient, seep improvement, and contextual factors, like the carbon intensity of the energy mix used. Let's take the example of a fridge to demonstrate this. The energy efficiency of fridges has improved substantially in recent years. This makes a big difference because a fridge operates all day every day, consuming energy all the time. So, prolonging the life of inefficient fridges is not necessarily desirable from an environmental point of view, If we consider use phase energy efficiency improvements. The use phace impacts from its energy consumption, can outweigh impacts from production of a new fridge. But if the rate of improvement slots or contextual factors change, such as cleaner electricity, this can change again in favour of prolonging lifetimes. Regular assessments are needed to determine the optimal lifetime of products and whether prolonging lifetimes really leads to environmental benefits overall. Environmental benefits occurring at product level can also be undermined by impacted system level, the so-called circular economy rebound effect. Imagine a situation where all the products are being reused, they may not lower the total amount of new products being produced. This might be the case if reuse products aren't actually good replacement for the primary product. In this case, reuse is more likely to lead to additional consumption rather than substitution. Another type of rebound effect would be that because cheaper secondary products are available, consumers spent the savings on other types of products. Overall, the level of consumption would increase. Although, this is not fully within companies ability to influence, it is important to consider. At least companies should aim to offer secondary products that are good substitutes for primary ones. Despite such potential drawbacks, in general, there are many good circular business model ideas that have great potential. It is just important to remember that the desired environmental benefits may be undermined in some cases. Why these can be exceptions, it is good to think critically and systematically and assessing the effects of products and business models to achieve the full environmental benefit and to manage drawbacks and trade-offs where possible. As part of applying the skill, the next part of the assignment requires you to judge assessment methods that could be suitable to measure the environmental performance of this circular business model. You will also have to critically reflect on whether the business model being pursued, is likely to bring about the desired and environmental benefit. If you need inspiration, you can review the lectures in this week on basic principles of methods for assessment. Whether they can be used for it, but also the limitations they have. So, make sure to look carefully at the assignment text for more detailed instructions.