A Novel Approach Incorporating Game Theory to Encourage Cooperation of Stakeholders Towards a Circular Economy Waste Management at a City Scale

Abstract

Circular economy is interpreted as the direct opposite of the current linear consumption paradigm based on extract, manufacture, use and dispose. It provides for a more effective approach to materials and waste management in which resources are fed back into the process rather than being ‘lost’. The concept is progressively attracting attention from general public, academics, urbanists, investors, industrialists, governments and others. For a successful transition towards a circular economy in cities, it is imperative to bring together all actors and disciplines in a comprehensive approach. However, circular economy implementation faces a variety of challenges, ranging from societal attitudes, practices to governance and attraction of investors. In the implementation stage, the rise of many partnerships and disputes must be expected, in a context where all stakeholders have differing priorities and interests, which will often result in conflict. To overcome such barriers and capture multiple types of value, it is essential that stakeholders work together to create joint value, and yet cooperation is proving difficult to achieve in practice. The main contribution of this research is to present an innovative methodology which combines the strengths of scenario analysis, multi-criteria decision making (MCDM) and game theory, to address the issue of stakeholders’ conflicting perspectives towards alternative scenarios in circular economy waste management at the city scale. Such practical tool is developed to improve cooperation opportunities between stakeholders consisting of: 1) measure the awareness of circular economy aspects for stakeholders; 2) construct possible future scenarios for Municipal Solid Waste Management (MSWM); 3) select criteria to evaluate these alternatives; 4) request stakeholders to rank such criteria; 5) reveal their criteria preferences; and 6) use the preferences to analyse the potential opportunities for cooperation in the circular economy transition. Incorporating game theory elements in the last step is the novel backbone of the method, it is a particularly useful mathematical technique, to study the interactions between stakeholders with multiple viewpoints and objectives. To test the proposed methodology, a case study is being conducted in the Tyseley Energy Park (TEP) in Birmingham, UK, where a major Energy from Waste (EfW) facility is located which deals with over two thirds of the Municipal Solid Waste (MSW) of the city. A number of stakeholders, are involved in the expansion and rearrangement of the park. Several changes to the site and the operational portfolio of business models are being aligned to more circular economy principles. This research aims to advance successful cooperation, which would allow the capture of various types of value, many deriving from infrastructure interdependencies, in an energy infrastructure park aiming to become a national exemplar for other cities. Anticipated results would lead to the formulation of recommendations on how to reach decisions which are optimal, feasible and stable for all the stakeholders, and therefore how to best implement circular economy principles at the meso and macro scales.

Keywords: Circular economy; game theory; energy park; multi-criteria decision making; municipal solid waste; scenario analysis