IE WP 02/04 Technology and the environment: an evolutionary approach to sustainable technological change

Can the individual actions of agents spontaneously move the system out of a state where it is locked into an environmentally inferior technology, or is coordination from outside the system necessary in the form of public intervention? More importantly, even if the system were able to make the transition unaided, could market coordination mechanisms play an important role? The results of our model show that it would be advisable to undertake policies expressly aimed at the process of sustainable technological change –applying an ex ante (precautionary) approach– in a way that is complementary to the conventional equilibrium oriented environmental policies. The nature of these policies and how they might be implemented are questions we will address from this novel approach to the concept of sustainable development. In short, the main objectives of this paper are to understand more fully the dynamics of the process of technological change, its role in sustainable development, and to assess the implications of this dynamic approach to techno-environmental policy. To achieve these goals we have developed an agent based model (ABM), using distributed artificial intelligence (DAI) concepts drawn from the general methodology of social simulation.