The international economics of resources and resource ... - Index of

Multi-agent modeling of economic innovation dynamics and its implications 335
competition are related to each other triggering different modes of action one of
which is novelty creation. Due to the difficulty to anticipate the time dependent
frequency of these modes of action, due to the unpredictable outcome of individual
novelty creating endeavors, and due to unknown social acceptance of these
outcomes (in terms of diffusion) there is no possibility to assess or even to plan
such a process in advance. Rather it necessitates to confine political influence or
regulation to a trial and error perspective. 23 Nevertheless the exemplary simulation
analysis given above shows that any kind of political regulation has to face an
innovation dilemma: If innovation is successful on the individual as well as on the
social level there is a high probability that it generates growth and if it generates
growth, it generates additional emissions. The only self-organized way to circumvent
this dilemma seems to be economic stagnation and crisis.
Against this background three general options for regulation can be distinguished:
(i) blocking the core of the innovation dynamics, (ii) fostering differentiation in
favor of establishing environmental benign technologies as well as products and (iii)
redirecting the innovation dynamics. Option (i) seems to be unfeasible in that it is
incompatible with a given market and competition environment. Option (ii) is often
pursued by political authorities but faces the problem of establishing and protecting a
niche or—to take it the other way round—it is confronted with the constraints of
path dependencies (cf. Nill 2009). Due to these constraints for options (i) and (ii) the
following discussion focuses on option (iii). Without going into the details of an
instrumental debate it is assumed that regulatory authorities are willing and firms are
able to implement a predefined path of reducing emissions. This is more specific
than the usual framing of the problem to reduce emissions (e.g. in the debate about
climate research) in that economic agents as the main subject of these policy options
are explicitly taken into account.
The first regulatory regime to analyze more closely is a short term dynamic
incremental dynamic abatement of emissions. Setting the initial change factor of
emission coefficient to 95% (i.e. in the beginning of the simulation, when creating an
innovative product, a firm has to reduce the emissions per produced unit by 5%
compared to the mean emission factor of the branch) the innovating firms have to
comply with the obligation of reducing this change factor of emission coefficient
(model parameter M; cf. section 5 (2)) by further 5% every 20 time steps (5 years).
This means that the speed of technological progress in terms of the reduction of
emission factors is accelerated more and more over the whole simulation. This
regime is depicted in Fig. 10.
In formal terms this means
Mt ðÞ¼0:95 for t < 20; Mtþ ð 20Þ
¼ Mt ðÞ 0:05 for all t: ð18Þ
Figure 11 indicates that it is not before t=100 (i.e. only after 5 regulation periods)
that the emissions in two of the four sectors start to be reduced leading to an overall
23
For a specification of this perspective of political regulation cf. Kemp and Zundel 2007 and
Beckenbach 2007.