Today’s material economy is highly globalized and interlinked. Goods are produced along global supply chains forming a complex economic network. Even post-growth societies based on regional production cycles will most likely depend on such chains, because resources are unequally distributed throughout the globe and therefore not all goods can be produced locally; an aspect often neglected in the discussion of regional economies.
We propose an agent-based modeling approach with a micro foundation. Starting from the current structure of the global supply network representing present day trade relations, we study the impact that taxes on resources have on consumption. As an example, we focus on carbon taxes, not imposed on greenhouse gas emissions resulting from the combustion of fossil energy sources along the supply chain, but directly on resource extraction. We discuss several scenarios for demand response, comparing present day purchasing power distribution in societies with more equal and just distributions; intra- as well as inter-national. This allows for a detailed assessment of how taxes impact on demand for different wealth distributions.
Our study can easily be extended to account for other planetary boundaries such as the nitrogen cycle or blue water consumption. We further plan to extend our model to assess growth (or degrowth) dynamics on a multi-annual timescale by considering exhaustible resources, including alternative technology options as well as long-term investments. Further, rendering the economic network flexible allows to compare network structures arising under different policy scenarios.
This media entry was a contribution to the special session „Distributional effects of resource taxes on consumption“ at the 5th International Degrowth Conference in Budapest in 2016.