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We conceive of path dependency as emerging from the adaptation of companies to dif-
ferent incentives that are introduced sequentially. The concept of a bio-based economy
involves biomass processing industries such as composters, anaerobic digesters, bio-
fuel plants, bio plastics producers, and others [11]. While the processing options imply
irreversible cascades of biomass use, any real-world implementation may fail to fully
exploit the available technological potential if lock-ins occur early in the development.
In addition to that, we would like to know whether the sequence in which the poli-
cies were introduced had a positive (dampening) effect on price volatility or what else
might dampen price volatility (e.g. contract duration). Obviously, this is important for
future policy implementation as it may allow or disallow the exploitation of the full
technological and economic potential of biomass use.
Secondly, we are interested in explaining how resilient the system is to external
shocks in the short term, e.g. seasonal loss of agricultural land due to flood, and how
robust to long term stress e.g. of rising oil prices or permanent loss of agricultural land?
We are thus interested in endogenous and exogenous shocks.
Finally, we want to know whether there are negative network externalities that might
reintroduce price volatility (e.g. of biofuel)? While we believe that there is evidence
for this in regard to the use of used cooking oil for biofuel production (e.g. sharp price
increase in the last four years) we need to understand whether negative network exter-
nalities also applied to other biomass flows and indeed the bio-based economy at the
Humber as a whole.
8
Conclusions
As this work has progressed we have become interested in the emerging interdependen-
cies between the different biomass flows in the development of a bio-based economy,
in particular in the sequence of the earlier waste policy and the later renewable energy
policy. This problem, which resulted in a restated and better specified research question,
was not obvious from the outset of the research project. In this respect the first phase of
the research project represents a search for relevance. The second phase is now quickly
leading to an agent-based model capable of answering very specific research questions.
The re-conceptualisation of the agent-based model will allow a relevant simulation of
the bio-based economic system. It will reflect endogenous development of the network
more effectively, as much as complexity is now emerging from the interaction of eco-
nomic actors. This should allow us to arrive at more reliable predictions of effects from
different policies.
References
1. Ackerman, F., Gallagher, K.: Mixed signals: market incentives, recycling, and the price spike
of 1995. Resources, Conservation and Recycling 35(4), 275-295 (2002)
2. Angus, A., Casado, M.R., Fitzsimons, D.: Exploring the usefulness of a simple linear re-
gression model for understanding price movements of selected recycled materials in the uk.
Resources, Conservation and Recycling 60, 10-19 (2012)
