Competitive Diffusion and Sustainable Transitions: The Case of Plastics Recycling Technologies

Abstract

Climate change confronts modern societies with numerous challenges requiring the emergence of innovative technologies. Often, emerging sustainable technologies face the barrier of mature and environmentally unsustainable counterparts. Even novel sustainable concepts and practices, such as recycling, can be hindered by the adoption and diffusion of outdated polluting technologies, jeopardizing the widespread adoption of innovative sustainable solutions. It is crucial to understand the mechanism of diffusion to design policies enabling the establishment of promising yet underdeveloped technologies. We propose an agent-based model of competitive diffusion with learning based on percolation theory, where adoption occurs in a social network through word-of-mouth. We investigate how learning affects diffusion and competition and find that small differences in technology costs lead to large differences in diffusion size. Most importantly, increasing the number of initial adopters may hamper overall diffusion, due to competition. Our model captures several stylized facts of plastics waste recycling, where mechanical and physical/chemical technologies are being adopted as alternative solutions.

Keywords: Agent-based modeling, Innovation, networks, Percolation, Technological change.