IDEAS home Printed from https://ideas.repec.org/a/spr/comgts/v22y2025i1d10.1007_s10287-025-00534-5.html
   My bibliography  Save this article

Understanding the role of technological complexity in sustainability transitions using stochastic, bi-level optimization

Author

Listed:
  • Nathan T. Boyd

    (University of Maryland, College Park)

  • Steven A. Gabriel

    (University of Maryland, College Park
    Norwegian University of Science and Technology
    Aalto University)

Abstract

Practically unlimited natural resources, such as solar energy and advanced seawater desalination, are potential solutions to sustainable resource consumption. However, accessing these natural resources depends on complex technologies that require further research and development. This technological complexity introduces significant uncertainty in the actions required to transition societies to more sustainable levels of resource consumption. Such uncertainty has important implications in terms of risk. The short-term depletion of limited natural resources, such as fossil fuels and freshwater, can pay off if these sustainable technologies mature in the long term. However, this short-term, resource-depletion policy carries the risk that these sustainable technologies will not materialize. In such a case, economic decline, population decline, or both are possible undesirable outcomes. To address this challenge, a stochastic, bi-level optimization problem is developed for sustainability transitions in natural-resource contexts. This model is formulated as a mathematical program with equilibrium constraints and is solved as a mixed-integer, non-linear program. This model is applied to an illustrative water-resources problem with two lower-level players where a policymaker manages freshwater in conjunction with a new water-treatment technology. Overall, this model demonstrates how policies for sustainable resource management can be quantified in terms of risk aversion to adopting new technologies.

Suggested Citation

  • Nathan T. Boyd & Steven A. Gabriel, 2025. "Understanding the role of technological complexity in sustainability transitions using stochastic, bi-level optimization," Computational Management Science, Springer, vol. 22(1), pages 1-36, June.
    • Handle: RePEc:spr:comgts:v:22:y:2025:i:1:d:10.1007_s10287-025-00534-5
    DOI: 10.1007/s10287-025-00534-5
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10287-025-00534-5
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10287-025-00534-5?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Nilay Noyan & Gábor Rudolf & Miguel Lejeune, 2022. "Distributionally Robust Optimization Under a Decision-Dependent Ambiguity Set with Applications to Machine Scheduling and Humanitarian Logistics," INFORMS Journal on Computing, INFORMS, vol. 34(2), pages 729-751, March.
    2. Brozynski, Max T. & Leibowicz, Benjamin D., 2020. "Markov models of policy support for technology transitions," European Journal of Operational Research, Elsevier, vol. 286(3), pages 1052-1069.
    3. Brozynski, Max T. & Leibowicz, Benjamin D., 2022. "A multi-level optimization model of infrastructure-dependent technology adoption: Overcoming the chicken-and-egg problem," European Journal of Operational Research, Elsevier, vol. 300(2), pages 755-770.
    4. Chang, Miguel & Thellufsen, Jakob Zink & Zakeri, Behnam & Pickering, Bryn & Pfenninger, Stefan & Lund, Henrik & Østergaard, Poul Alberg, 2021. "Trends in tools and approaches for modelling the energy transition," Applied Energy, Elsevier, vol. 290(C).
    5. Antonio J. Conejo & Miguel Carrión & Juan M. Morales, 2010. "Decision Making Under Uncertainty in Electricity Markets," International Series in Operations Research and Management Science, Springer, number 978-1-4419-7421-1, December.
    6. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    7. Safarzyńska, Karolina & Frenken, Koen & van den Bergh, Jeroen C.J.M., 2012. "Evolutionary theorizing and modeling of sustainability transitions," Research Policy, Elsevier, vol. 41(6), pages 1011-1024.
    8. Johan Rockström & Joyeeta Gupta & Dahe Qin & Steven J. Lade & Jesse F. Abrams & Lauren S. Andersen & David I. Armstrong McKay & Xuemei Bai & Govindasamy Bala & Stuart E. Bunn & Daniel Ciobanu & Fabric, 2023. "Safe and just Earth system boundaries," Nature, Nature, vol. 619(7968), pages 102-111, July.
    9. Harker, Patrick T., 1991. "Generalized Nash games and quasi-variational inequalities," European Journal of Operational Research, Elsevier, vol. 54(1), pages 81-94, September.
    10. Nemet, Gregory F., 2006. "Beyond the learning curve: factors influencing cost reductions in photovoltaics," Energy Policy, Elsevier, vol. 34(17), pages 3218-3232, November.
    11. Gaya Herrington, 2021. "Update to limits to growth: Comparing the World3 model with empirical data," Journal of Industrial Ecology, Yale University, vol. 25(3), pages 614-626, June.
    12. Zhuang, Jifang & Gabriel, Steven A., 2008. "A complementarity model for solving stochastic natural gas market equilibria," Energy Economics, Elsevier, vol. 30(1), pages 113-147, January.
    13. Markard, Jochen & Raven, Rob & Truffer, Bernhard, 2012. "Sustainability transitions: An emerging field of research and its prospects," Research Policy, Elsevier, vol. 41(6), pages 955-967.
    14. Brian Arthur, W. & Ermoliev, Yu. M. & Kaniovski, Yu. M., 1987. "Path-dependent processes and the emergence of macro-structure," European Journal of Operational Research, Elsevier, vol. 30(3), pages 294-303, June.
    15. Geels, Frank, 2005. "Co-evolution of technology and society: The transition in water supply and personal hygiene in the Netherlands (1850–1930)—a case study in multi-level perspective," Technology in Society, Elsevier, vol. 27(3), pages 363-397.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zeppini, Paolo, 2015. "A discrete choice model of transitions to sustainable technologies," Journal of Economic Behavior & Organization, Elsevier, vol. 112(C), pages 187-203.
    2. Jiang, Syuan-Yi, 2022. "Transition and innovation ecosystem – investigating technologies, focal actors, and institution in eHealth innovations," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    3. Miklós Antal & Ardjan Gazheli & Jeroen C.J.M. van den Bergh, 2012. "Behavioural Foundations of Sustainability Transitions. WWWforEurope Working Paper No. 3," WIFO Studies, WIFO, number 46424, October.
    4. Christopher Durugbo & Joseph Amankwah‐Amoah, 2019. "Global sustainability under uncertainty: How do multinationals craft regulatory policies?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(6), pages 1500-1516, November.
    5. Appiah, Michael & Li, Mingxing & Sehrish, Saba & Abaji, Emad Eddin, 2023. "Investigating the connections between innovation, natural resource extraction, and environmental pollution in OECD nations; examining the role of capital formation," Resources Policy, Elsevier, vol. 81(C).
    6. Attila Havas & Doris Schartinger & K. Matthias Weber, 2022. "Innovation Studies, Social Innovation, and Sustainability Transitions Research: From mutual ignorance towards an integrative perspective?," CERS-IE WORKING PAPERS 2227, Institute of Economics, Centre for Economic and Regional Studies.
    7. Weigelt, Carmen & Lu, Shaohua & Verhaal, J. Cameron, 2021. "Blinded by the sun: The role of prosumers as niche actors in incumbent firms’ adoption of solar power during sustainability transitions," Research Policy, Elsevier, vol. 50(9).
    8. Brozynski, Max T. & Leibowicz, Benjamin D., 2022. "A multi-level optimization model of infrastructure-dependent technology adoption: Overcoming the chicken-and-egg problem," European Journal of Operational Research, Elsevier, vol. 300(2), pages 755-770.
    9. Gunther Maier, 2011. "History, Spatial Structure, and Regional Growth: Lessons for Policy Making," Advances in Spatial Science, in: Börje Johansson & Charlie Karlsson & Roger R. Stough (ed.), Theories of Endogenous Regional Growth, chapter 6, pages 111-134, Springer.
    10. Defeuilley, Christophe, 2019. "Energy transition and the future(s) of the electricity sector," Utilities Policy, Elsevier, vol. 57(C), pages 97-105.
    11. Zeppini, Paolo & van den Bergh, Jeroen C.J.M., 2020. "Global competition dynamics of fossil fuels and renewable energy under climate policies and peak oil: A behavioural model," Energy Policy, Elsevier, vol. 136(C).
    12. Francesco Lamperti & Giovanni Dosi & Mauro Napoletano & Andrea Roventini & Alessandro Sapio, 2018. "And then he wasn't a she : Climate change and green transitions in an agent-based integrated assessment model," Working Papers hal-03443464, HAL.
    13. Lamperti, F. & Dosi, G. & Napoletano, M. & Roventini, A. & Sapio, A., 2020. "Climate change and green transitions in an agent-based integrated assessment model," Technological Forecasting and Social Change, Elsevier, vol. 153(C).
    14. Paolo Zeppini & Koen Frenken & Roland Kupers, 2013. "Threshold models of technological transitions," Working Papers 13-06, Eindhoven Center for Innovation Studies, revised Aug 2013.
    15. Aghion, Philippe & David, Paul A. & Foray, Dominique, 2009. "Science, technology and innovation for economic growth: Linking policy research and practice in 'STIG Systems'," Research Policy, Elsevier, vol. 38(4), pages 681-693, May.
    16. Papachristos, George, 2017. "Diversity in technology competition: The link between platforms and sociotechnical transitions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 73(C), pages 291-306.
    17. Sorrell, Steve, 2018. "Explaining sociotechnical transitions: A critical realist perspective," Research Policy, Elsevier, vol. 47(7), pages 1267-1282.
    18. Walrave, Bob & Raven, Rob, 2016. "Modelling the dynamics of technological innovation systems," Research Policy, Elsevier, vol. 45(9), pages 1833-1844.
    19. Zolfagharian, Mohammadreza & Walrave, Bob & Raven, Rob & Romme, A. Georges L., 2019. "Studying transitions: Past, present, and future," Research Policy, Elsevier, vol. 48(9), pages 1-1.
    20. Paolo Zeppini, 2014. "A discrete choice model of transitions to sustainable technologies: speed limits and optimal monetary policies," Department of Economics Working Papers 28/14, University of Bath, Department of Economics.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:comgts:v:22:y:2025:i:1:d:10.1007_s10287-025-00534-5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.