When ‘sustainable’ fashion backfires on the environment

Erez Yerushalmi; Krish Saha

doi:10.64628/AB.cv7yrfvcy

When ‘sustainable’ fashion backfires on the environment

Erez Yerushalmi^* (Corresponding / Lead Author), Krish Saha

^*Corresponding author for this work

Research output: Contribution to journal › Review article › peer-review

Abstract

Circular economy innovations in fashion - like recycling, rental platforms, and AI-driven waste reduction - are often seen as sustainable solutions. However, our computable general equilibrium (CGE) model reveals a significant rebound effect, where increased efficiency lowers costs and encourages higher consumption, offsetting environmental gains. We quantified a global backfire rebound index of 1.6: every 1% efficiency gain leads to a 0.6% increase in production.

Without intervention, these innovations may worsen environmental impacts. Policy tools such as Pigouvian taxes, production caps, and consumption incentives are essential to manage rebound.

Sustainability in fashion requires systemic changes, behavioural shifts, and coordinated global policies - not just technological improvements.

Original language	English
Journal	The Conversation
DOIs	https://doi.org/10.64628/AB.cv7yrfvcy
Publication status	Published (VoR) - 11 Sept 2025

Keywords

Circular Economy (CE)
innovation
Rebound Effect (RE)
Computable General Equilibrium (CGE) model
Degrowth
Textile and Clothing Sector

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title = "When {\textquoteleft}sustainable{\textquoteright} fashion backfires on the environment",

abstract = "Circular economy innovations in fashion - like recycling, rental platforms, and AI-driven waste reduction - are often seen as sustainable solutions. However, our computable general equilibrium (CGE) model reveals a significant rebound effect, where increased efficiency lowers costs and encourages higher consumption, offsetting environmental gains. We quantified a global backfire rebound index of 1.6: every 1\% efficiency gain leads to a 0.6\% increase in production. Without intervention, these innovations may worsen environmental impacts. Policy tools such as Pigouvian taxes, production caps, and consumption incentives are essential to manage rebound. Sustainability in fashion requires systemic changes, behavioural shifts, and coordinated global policies - not just technological improvements.",

keywords = "Circular Economy (CE), innovation, Rebound Effect (RE), Computable General Equilibrium (CGE) model, Degrowth, Textile and Clothing Sector",

author = "Erez Yerushalmi and Krish Saha",

year = "2025",

month = sep,

day = "11",

doi = "10.64628/AB.cv7yrfvcy",

language = "English",

journal = "The Conversation",

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TY - JOUR

T1 - When ‘sustainable’ fashion backfires on the environment

AU - Yerushalmi, Erez

AU - Saha, Krish

PY - 2025/9/11

Y1 - 2025/9/11

N2 - Circular economy innovations in fashion - like recycling, rental platforms, and AI-driven waste reduction - are often seen as sustainable solutions. However, our computable general equilibrium (CGE) model reveals a significant rebound effect, where increased efficiency lowers costs and encourages higher consumption, offsetting environmental gains. We quantified a global backfire rebound index of 1.6: every 1% efficiency gain leads to a 0.6% increase in production. Without intervention, these innovations may worsen environmental impacts. Policy tools such as Pigouvian taxes, production caps, and consumption incentives are essential to manage rebound. Sustainability in fashion requires systemic changes, behavioural shifts, and coordinated global policies - not just technological improvements.

AB - Circular economy innovations in fashion - like recycling, rental platforms, and AI-driven waste reduction - are often seen as sustainable solutions. However, our computable general equilibrium (CGE) model reveals a significant rebound effect, where increased efficiency lowers costs and encourages higher consumption, offsetting environmental gains. We quantified a global backfire rebound index of 1.6: every 1% efficiency gain leads to a 0.6% increase in production. Without intervention, these innovations may worsen environmental impacts. Policy tools such as Pigouvian taxes, production caps, and consumption incentives are essential to manage rebound. Sustainability in fashion requires systemic changes, behavioural shifts, and coordinated global policies - not just technological improvements.

KW - Circular Economy (CE)

KW - innovation

KW - Rebound Effect (RE)

KW - Computable General Equilibrium (CGE) model

KW - Degrowth

KW - Textile and Clothing Sector

UR - https://doi.org/10.1002/bse.70135

U2 - 10.64628/AB.cv7yrfvcy

DO - 10.64628/AB.cv7yrfvcy

M3 - Review article

JO - The Conversation

JF - The Conversation

ER -

When ‘sustainable’ fashion backfires on the environment

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