Sustainability transition and digital trasformation: an agent-based perspective

Digital transformation and sustainability transition are complex phenomena characterized by fun-damental uncertainty. The potential consequences deriving from these processes are the subject of open de-bates among economists and technologists. In this respect, adopting a modelling and simulation approachrepresents one of the best solution in order to forecast potential effects linked to these complex phenom-ena. Agent-based modelling represents an appropriate paradigm to address complexity. This research aimsat showing the potential of the large-scale macroeconomic agent-based model Eurace in order to investigatechallenges like sustainability transition and digital transformation. This paper discusses and compares resultsof previous works where the Eurace model was used to study the digital transformation, while it presents newresults concerning the framework on the sustainability transition, where a climate agent is introduced to ac-count the climate economy interaction. As regards the digital transformation, the Eurace model is able to cap-ture interesting business dynamics characterizing the so-called increasing returns world and, in case of highrates of digital technological progress, it shows a significant technological unemployment. As regard the sus-tainability transition, it displays a rebound effect on energy savings that compromises efforts to reduce greenhouse gases emissions via electricity efficiency improvements. Furthermore, it shows that a carbon tax couldbe not sufficient to decouple economy from carbon consumption, and that a feed-in tariff policy fosteringrenewable energy production growth may be more effective.