Transitions tosustainable

development Karolina Safarzynska

Outline of the presentation

• Sustainability transitions

• Lines of current research:

- the optimal diversity of energy technologies - diversity of energy sources - modelling the rebound effect

• Conclusions

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Sustainable development

Core Questions of Sustainability Science

How the dynamic interactions between nature and society can be modeled?

What are long-term trends in environment and development reshaping nature-society interactions?

What systems of incentive structures can most effective guide society toward sustainability?

Kates et al., (2001) Science

Sustainability policies

Regulations

Prices

Behavioral change

Technological change

Transition Network

Knowledge Network for System Innovations and Transitions

Sustainability Transition Research Network

Environmental Innovations andSocietal Transitions

Transitions

Transitions are “… a gradual continuous process of societal changes in which society (or a complex subsystem of it) structurally changes its character..”

They are characterized by persistent problems deeply rooted in current practices and prevailing structures.

Rotmans et al. (2000)

Transitions

Geels, (2005)

Managing Transitions

Kemp and Loorbach, (2005)

Evolutionary modeling of sustainability transitions

Methods Concepts

- Agent-based modeling

- Evolutionary game theory

- Evolutionary algorithms

- Dynamic systems

- Innovation-Selection- Diversity

- Bounded rationality

- Path dependence

- Group selection

- CoevolutionSafarzynska, (2010)

Open questions for modeling

Safarzynska, Frenken, van den Bergh (2012) Research Policy

Multi-level Multi-phase Coevolution Learning

General Question

How to support sustainability transitions?

Guiding by understanding

How to analyze the second-order effects of policies?

By designing models to unravel mechanisms underlying the system development

Policies

The optimal allocation of investments between different energy technologies

Energy efficiency

Energy taxes

Nuclear and renewable obligations

The optimal diversity

An innovation-selection model

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recombination

Three-technology context

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Selection environments

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Investment in recombinant innovations

Safarzynska, van den Bergh (2011) Journal of Economic Behavior and Organization

Recombination alone Recombination and mutation

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The average cost of energy technologies

Safarzynska and van den Bergh (2013) Journal of Evolutionary Economics

Final remarks

Sufficient investments in recombinant innovations ensure that a new technology emerge

But too much investments in recombinant innovations can result in a lock in to a new technology, which limits possibility for future recombinant innovations

Diversity in energy systems

Are changes in diversity of energy sources indicative of structural transformations?

How energy diversity changes over the course of economic development?

Diversity of energy sources

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Diversity of energy sources

Energy diversity:

The similarity measure between countries i and k:

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Diversity of energy sources

Safarzynska (2013) in preparation

Energy space

Safarzynska (2013) in preparation

Final remarks

Countries grow by diversifying energy sources

Energy diversity is indicative of structural changes

Modeling the rebound effect in two manufacturing industries

Polices aimed at reducing energy use are often ineffective

Improvements in energy efficiency do not bring a proportional reduction in energy use (Jevon’s paradox)

Problems

Demand and supply aspects of the rebound effect studies separately

A structural change towards high quality fuels is often ignored

Aggregate data does not reveal specific mechanisms behind the rebound effect

Coevolution of demand and supply and electricity use

Heterogeneous power plants

Boundedly rational firms

Two classes of consumer

Heterogeneous plants

Electricity market is composed of 11 heterogeneous power plants (gas, coal and nuclear)

Pricing and output decisions are modeled with the Cournot game.

Heterogeneous plants

Cobb-Douglass production functions:

Investments in a new power plant are based on the discounted value of investments:

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Fit

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Electricity market

Safarzynska, van den Bergh (2011) Energy Policy

Producers of final products

5 firms offer differentiated product

Two types of innovation processes: incremental improvements in product design and the search for radical innovation

Electricity as an input

Electricity is an input in production:

Changes in energy efficiency:

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Formal model – poor and rich consumers

2 classes of consumers: 11 rich and 89 poor

Consumers rank products according to utility:

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Network effects through

Market shares

stj – the market share of technology j

A technical characteristics

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Illustrative example

Safarzynska (2012) Technological Forecasting and Social Change

The indicator

Probability of the rebound effect

Market share Technical Characteristics

Network elasticity +Snob elasticity

Substitution elasticity

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Share of capital in production

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Annual change in electricity efficiency

- -

Policies

a tax on electricity ‘nuclear obligations’ to produce ten percent of

electricity from nuclear energy.

The probability of energy backfire (out of 100 simulations)

Nuclear obligations

Nuclear obligations increased significantly the share of electricity produced with nuclear energy

It increases the share of nuclear energy in electricity production from 4% to 24%

Final remarks

Clustering of consumer choices makes the rebound effect more likely to occur (the network effect)

The effectiveness of policies depends on the network effect

Conclusions

Managing transitions to sustainability requires understanding micro-mechanisms that underlie system development

Co-authors

Jereon van den Bergh (ICREA, Barcelona, Spain)

Keon Frenken (Eindhoven University, Netherlands)

Roy Brouwer (VU, Netherlands) Marjan Hofkes (VU, Netherlands)

Elefhteria Vasileiadou (VU, Netherlands)

Thank you!