Actors behaving badly: Exploring the modelling of non-optimal behaviour in energy transitions

Abstract

There are real political and social barriers to climate mitigation that arise from multiactor dynamics and micro-economic decisions. Exploratory analysis that captures key uncertainties in the energy system, including behaviour, is crucial for policy design aimed at achieving ambitious greenhouse gas (GHG) mitigation targets. This paper explores the case for developing policy assessments that include non-optimal behaviour in energy systems modelling. A stochastic system dynamic model of the energy system that features multiple actors with differentiated behaviours is used to investigate energy transition pathways that deviate from strict economic rationality. The results illustrate the risks of basing GHG reduction strategies on analysis that overlooks key insights into decision making from fields such as behavioural economics and political science. KeywordsEnergy systems modeling; climate policy; decarbonization; behavioral economics; uncertainty; Highlights• Dynamic stochastic model of energy transitions used to explore actor behaviour • Uncertainty analysis explores impact of sub-optimal actor choices and policies • Behaviour could be as significant as the techno-economic drivers of transitions • Climate targets difficult to achieve without idealised assumptions about behaviour • Energy systems modelling must expand consideration of socio-political factors

Simulating the deep decarbonisation of residential heating for limiting global warming to 1.5 °C

“…Cayla and Maïzi (2015) extended the TIMES-Households model for France by including different household categories. Also for France, Giraudet et al (2012) introduce consumer heterogeneity and intangible costs into a bottom-up submodule of IMACLIM-R. Li (2017) presents an optimization model with heterogeneous decision-making which covers heating in the UK. However, most of these studies feature a relatively low resolution of technology types for heating, and are restricted to one (or mostly a few) countries.…”

Aligning integrated assessment modelling with socio-technical transition insights: An application to low-carbon energy scenario analysis in Europe

“…McCollum et al, 2016). Alternatively, the impacts of diverging social actor behaviours on a low-carbon transition have also been studied via stochastic modelling approaches that emulate numerous single actors and their preferences (Li, 2017).…”

Regional winners and losers in future UK energy system transitions

“…Results achieved under such a modelling paradigm effectively assume that real-world actors are tightly coordinated, and that investment decisions are made on the basis of maximising net social welfare. This is of course, one set of valid set assumptions to make, but equally plausible outcomes are found in work exploring so-called "second best" [100] futures that take into account political and social barriers that might make achieving the mathematically optimal outcome impossible [27,101,102]. This is the category into which this study falls.…”

“…Concerns that models are "black boxes" whose internal workings are poorly understood have prompted development of models that facilitate exploration of parameter uncertainty [18][19][20], and increased the prevalence of multi-model exercises to expose uncertainties arising from model structure [21,22]. Other notable responses to criticism of model limitations include the development multi-regional models to explore spatial dynamics [23,24], models that reflect the limited foresight of real decision makers [25], and models that incorporate detailed behavioural choice parameters [26][27][28].…”