Abstract
At a time when climate change has become an accepted risk to civilisation, governments are developing and implementing policies designed to reduce the impacts of anthropogenic greenhouse gas (GHG) emissions. These can include “command and control” directives. However, in free market economies, such as the United Kingdom, there is a preference for a lassie faire approach with taxes and incentives designed to shape the market rather than direct government intervention. This thesis examines the feasibility of using agent-based modeling techniques for predictive analysis with respect to the application of carbon taxes on electricity consumption in the context of wider societal objectives and scenarios – particularly in the procurement of information and communication technology (ICT) equipment and services by small and medium businesses (SMEs) in the United Kingdom. In doing so it provides an area of novel research. With more than 2% of greenhouse gas (GHG) emissions associated with the usage of ICT and with that proportion expected to grow, it is an important sector to target with emission reduction strategies. Testing these strategies in simulation prior to application to the market place is important to policy makers. Normally, policy makers wish to reduce the risk of implementing policies that would not achieve the desired goals and or harm the economy. Agent-based modeling potentially offers policy makers valuable insight into probable emergent market behaviour from a “bottom-up” methodology that better suits free markets that contain millions of SMEs. This thesis applies a multidisciplinary problem solving approach, including microeconomics, agent based modeling and policy research, to examining potential market responses to carbon taxes such as the Climate Change Levy (CCL); the UK’s primary carbon tax designed to reduce carbon emissions produced by SMEs. Areas of novelty in the thesis include the use of agent based models to examine the effects of carbon taxes on the behaviour of SMEs and the use of ICT as a factor production with the SME agents themselves.