Models in evolutionary economics and environmental policy: Towards an evolutionary environmental economics

In this paper we review evolutionary economic modelling in relation to environmental policy. We discuss three areas in which evolutionary economic models have a particularly high added value for environmental policy-making: the double externality problem, technological transitions and consumer demand. We explore the possibilities to apply evolutionary economic models in environmental policy assessment, including the opportunities for making policy-making endogenous to environmental innovation. We end with a critical discussion of the challenges that remain.

Long-term diffusion factors of technological development - an evolutionary model and case study

In the first part of this article, a short description of the most popular models of two competing technologies (the Fisher-Pry model and its modifications proposed by Blackman, Floyd, Sharif and Kabir) and the multi technological substitution models of Peterka and Marchetti-Nakiæenoviæ are presented. In the second section, we describe an evolutionary model of diffusion processes based on biological analogy, together with the method of its parameters’ identification using real data on technologies development. In the final sections the applications of that model to describe the real diffusion processes (namely, primary energy sources in the world energy consumption and the raw steel production in the United States) are presented. The feasibility of using the model to predict future shares of given technologies and to build alternative scenarios of future evolution of structure of the market is suggested.diffusion; substitution; evolution; simulation; s-curve; logistic curve; logistic function

An Evolutionary Economic Analysis of Energy Transitions

Evolutionary economics offers clear insights into the mechanisms that underlie innovations, structural change and transitions. It is therefore of great value for the framing of policies aimed at fostering a transition to a sustainable development. This paper offers an overview of the main insights of evolutionary economics and derives core concepts, namely ‘diversity’, ‘innovation’, ‘selection environment’, ‘bounded rationality’, ‘path dependence and lock-in’, and ‘coevolution’. These concepts are subsequently used to formulate guidelines for the role of the government and the design of public policies, such as the learning from historical technological pathways and the creation of an extended level playing field. In addition, the developments of certain energy technologies are examined in detail within the adopted evolutionary economics framework. Three particular technologies received attention, namely fuel cells, nuclear fusion, and photovoltaic cells.

Lock-in & Break-out from Technological Trajectories: Modeling and policy implications

Arthur [1,2] provided a model to explain the circumstances that lead to technological lock-in into a specific trajectory. We contribute substantially to this area of research by investigating the circumstances under which technological development may break-out of a trajectory. We argue that for this to happen, a third selection mechanism--beyond those of the market and of technology--needs to upset the lock-in. We model the interaction, or mutual shaping among three selection mechanisms, and thus this paper also allows for a better understanding of when a technology will lock-in into a trajectory, when a technology may break-out of a lock-in, and when competing technologies may co-exist in a balance. As a system is conceptualized to gain a (third) degree of freedom, the possibility of bifurcation is introduced into the model. The equations, in which interactions between competition and selection mechanisms can be modeled, allow one to specify conditions for lock-in, competitive balance, and break-out

Dynamical Solution of the On-Line Minority Game

We solve the dynamics of the on-line minority game, with general types of decision noise, using generating functional techniques a la De Dominicis and the temporal regularization procedure of Bedeaux et al. The result is a macroscopic dynamical theory in the form of closed equations for correlation- and response functions defined via an effective continuous-time single-trader process, which are exact in both the ergodic and in the non-ergodic regime of the minority game. Our solution also explains why, although one cannot formally truncate the Kramers-Moyal expansion of the process after the Fokker-Planck term, upon doing so one still finds the correct solution, that the previously proposed diffusion matrices for the Fokker-Planck term are incomplete, and how previously proposed approximations of the market volatility can be traced back to ergodicity assumptions.Comment: 25 pages LaTeX, no figure

Reconceptualizing major policy change in the advocacy coalition framework: a discourse network analysis of German pension politics

How does major policy change come about? This article identifies and rectifies weaknesses in the conceptualization of innovative policy change in the Advocacy Coalition Framework. In a case study of policy belief change preceding an innovative reform in the German subsystem of old-age security, important new aspects of major policy change are carved out. In particular, the analysis traces a transition from one single hegemonic advocacy coalition to another stable coalition, with a transition phase between the two equilibria. The transition phase is characterized (i) by a bipolarization of policy beliefs in the subsystem and (ii) by state actors with shifting coalition memberships due to policy learning across coalitions or due to executive turnover. Apparently, there are subsystems with specific characteristics (presumably redistributive rather than regulative subsystems) in which one hegemonic coalition is the default, or the "normal state." In these subsystems, polarization and shifting coalition memberships seem to interact to produce coalition turnover and major policy change. The case study is based on discourse network analysis, a combination of qualitative content analysis and social network analysis, which provides an intertemporal measurement of advocacy coalition realignment at the level of policy beliefs in a subsystem

Current and evolving approaches for improving the oral permeability of BCS Class III or analogous molecules

The Biopharmaceutics Classification System (BCS) classifies pharmaceutical compounds based on their aqueous solubility and intestinal permeability. The BCS Class III compounds are hydrophilic molecules (high aqueous solubility) with low permeability across the biological membranes. While these compounds are pharmacologically effective, poor absorption due to low permeability becomes the rate-limiting step in achieving adequate bioavailability. Several approaches have been explored and utilized for improving the permeability profiles of these compounds. The approaches include traditional methods such as prodrugs, permeation enhancers, ion-pairing, etc., as well as relatively modern approaches such as nanoencapsulation and nanosizing. The most recent approaches include a combination/hybridization of one or more traditional approaches to improve drug permeability. While some of these approaches have been extremely successful, i.e. drug products utilizing the approach have progressed through the USFDA approval for marketing; others require further investigation to be applicable. This article discusses the commonly studied approaches for improving the permeability of BCS Class III compounds

The cultural psychology of obesity: diffusion of pathological norms from Western to East Asian societies

We examine the accelerating worldwide obesity epidemic using a mathematical model relating a cognitive hypothalamic-pituitary-adrenal axis tuned by embedding cultural context to a signal of chronic, structured, psychosocial threat. The obesity epidemic emerges as a distorted physiological image of ratcheting social pathology involving massive, policy-driven, economic and social 'structural adjustment' causing increasing individual, family, and community insecurity. The resulting, broadly developmental, disorder, while stratified by expected divisions of class, ethnicity, and culture, is nonetheless relentlessly engulfing even affluent majority populations across the globe. The progression of analogous epidemics in affluent Western and East Asian socieities is particularly noteworthy since these enjoy markedly different cultural structures known to influence even such fundamental psychophysical phenomena as change blindness. Indeed, until recently population patterns of obesity were quite different for these cultures. We attribute the entrainment of East Asian societies into the obesity epidemic to the diffusion of Western socioeconomic practices whose imposed resource uncertainties and exacerbation of social and economic divisions constitute powerful threat signals. We find that individual-oriented 'therapeutic' interventions will be largely ineffective since the therapeutic process itself (e.g. relinace on drug treatments) embodies the very threats causing the epidemic