CIRCULAR ECONOMY AND THE THEORY OF GAMES: Nature as a player?

When I first saw the biographic movie of John Nash (A Beautiful Mind) there was a scene that made me think: the one where the basics of the theory of games is explained, with an hypothetic scene of Nash’s university colleagues wanting to dance with the very same nice blond girl: they were the players and the girl would be the “payoff”. Under this theory, the players have to be intelligent rational decision-makers; they actually play the game. So, as a woman, it kind of first stroke me that in such example, the “thing” the players could win, the “payoff”, was actually a girl (as if she did not have the capacity to decide for herself the guy she liked the most…).

Nothing but the girl…

But then I started reasoning: what about Nature in the theory of games? It is a fact that the game theory has been widely recognized as an important tool in many fields, and was applied to biology in the 1970s. But I mean in economic science, where the theory was mostly integrated. In conventional economy, nature with its resources is also treated just as a thing, just as the girl in the movie. It does not work as a player. But it should! In fact, what Environment NGOs have being doing all this time, is trying to speak on behalf of Nature, to compensate the fact that it is a mute player (only talks when very “angry”).

As a biologist, I am aware that there is a game going on since the beginning of life: the game of survival of species, the evolution of ecological systems. On the other hand everybody knows that the natural resources are finite and we are depleting them with over extraction, pollution, etc.

So, I started searching for articles on the theory of games and nature, as I was persuaded that if an economic model could integrate nature as part of the players system, this could be (at least theoretically) a solution for reaching a sustainable economy system in a healthy planet. I found some articles on climate change and the theory of games, I even contacted the inspiring Pavan Suckdev and some other relevant researchers. But did not find what I wanted.

A matter of fitness?

I wanted to find something that could make the bridge between economic models and ecological models. I found some interesting stuff on mathematic theories predator-prey and, finally on “fitness”¹, the ability of a species to survive, the best approximation to the concept of a “player”. But despite these were wonderful models, they were on the field on maths and ecology, not economics.

Then I wondered if the mathematical equations of fitness could be inserted into mathematical game models that could maybe work. My idea was to create a problem using for instances a population of an X species and start with several positive results for fitness under the pressure of a predator, or similar, and were the conventional economic players could still make their winnings. Basically, to get win-win solutions that could both ensure the fitness of such a population but still get some winnings for a certain economic activity. But although maths is a common language, it has its “dialects” and I am not sure if that’s is possible, only an interdisciplinary work could make advances, if someone could ever be interested…

The circular snake dream

All that was more than 5 years ago. Meanwhile, everybody talks about the concept of circular economy, assumed as a general policy by European Commission, ultimately based on the nature rule formulated by Lavoisier that in nature nothing is created or get lost, all is transformed. Apparently interdisciplinary between chemistry and economics is doing its first steps!

A recent article on circular economy model² shows that “contrary to the Environmental Kuznets Curve (EKC), environmental quality cannot be maintained or improved via economic growth. Instead, the improvement in environmental quality, as measured by a reduction in pollution, can only be achieved by an increase in the environmental self-renewal rate or the recycling ratio”.

As the fantastic Ellen MacArthur says in her speeches promoting circular economy: a linear economy in a circular world… does not work. This reminded me of the story of the discovery of benzene molecule formula I learned in Organic Chemistry: a certain chemist was unsuccessfully trying to formulate benzene under a linear structure, so one day he dreamed the atoms were circulating and transforming into a snake biting its own tail, he woke up and tried a circular design and it worked perfectly! That’s our world: we need to dream further and find the right formula for economics that fit into the circular reality of the system.

In a poster presented in 2012 at a Conference on Ecosystems markets, we drew a rather simplistic graphic of a circular system representing the green market, where the market could effectively “give back” to nature, which in turn provided a lot of services. That of course means a lot more than just avoiding or recycling waste.

Despite circular economy is being worked out mostly on the field of waste management, design, recycling and so on, maybe finally it can be helpful to reach a mathematical model where nature is a player, or even maybe more: where nature actually sets the rules of the game.

One thing I believe: increasing interdisciplinary work on economic models and environmental sciences will help the economic world to get convinced faster that a structural shift is needed.