Environmental Modeling & Assessment

, Volume 22, Issue 4, pp 323–343 | Cite as

The Effect of Green Investments in an Agent-Based Climate-Economic Model

  • Sylvie Geisendorf
  • Christian KlippertEmail author


Climate-economic modeling often relies on macroeconomic integrated assessment models (IAMs) that in general try to capture how the combined system reacts to different policies. Irrespective of the specific modeling approach, IAMs suffer from two notable problems. First, although policies and emissions are dependent on individual or institutional behavior, the models are not able to account for the heterogeneity and adaptive behavior of relevant actors. Second, the models unanimously consider mitigation actions as costs instead of investments: an arguable definition, given that all other expenditures are classified as investments. Both are challenging if the long-term development of climate change and the economy shall be analyzed. This paper therefore proposes a dynamic agent-based model, based on the battle of perspectives approach (Janssen [1]; Janssen and de Vries [2]; Geisendorf [3, 4]) that details the consequences of various behavioral assumptions. Furthermore, expenditures for climate protection, e.g., the transition of the energy system to renewables, are regarded as investments in future technologies with promising growth rates and the potential to incite further growth in adjoining sectors (Jaeger et al. [5]). The paper analyzes how a different understanding of climate protection expenditures changes the system’s dynamic and, thus, the basis for climate policy decisions. The paper also demonstrates how erroneous perceptions impact on economic and climate development, underlining the importance to acknowledge heterogeneous beliefs and behavior for the success of climate policy.


Climate change Energy policy Energy transition Green investments Agent-based modeling Learning by doing 



We are grateful for the constructive and useful advice received from participants at the WEHIA conference, the ICP workshop, and the ICYESS conference as well as from two unknown reviewers. We thank Ms. Elisabeth Nevins Caswell of Effectual Editorial Services for proofreading the text.


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© Springer International Publishing Switzerland 2017

Authors and Affiliations

  1. 1.ESCP Europe, Business School Berlin, Chair of Environment and EconomicsBerlinGermany
  2. 2.SustBusy: Business and Society—Towards a Sustainable WorldResearch Center at ESCP Europe Business School BerlinBerlinGermany
  3. 3.Competence Centre for Climate Mitigation and Adaptation (CliMA)KasselGermany

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