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Thursday, July 02, 2015

Games theory extended to multiple games

Introduction

The following question was put the the President of the World Bank, Dr. Jim Yong Kim by my MP, Geoffrey Clifton-Brown 

“How does the World Bank expect the global economy to take the painful steps necessary to address climate change when the world’s most powerful economic blocks remain locked in nuclear weapon standoffs which is terrifying them into borrowing trillions of dollars for weapons that will outlast civilisation as it collapses from climate change and which force preservation of business as usual to the very end?”


This question is considered in the context of Game Theory, where a game is a defined as a decision making scenario where players must take a decision such that the outcome to them is dependent on that made by the other players.

In the question above, the outcome to the players in a game (i.e. climate change) is also dependent on the outcome made in in other games (i.e. nuclear weapons). There are three fundamental games at play which are described below.

The first is the game of climate change negotiations which generally is assumed to be about obtaining an agreement to cut CO2 emissions. However, past failure to do so, means that this must now also be about agreeing to the adaptation measures to be taken. So far, despite all the hype of renewables, global consumption of fossil fuels is continuing to push atmospheric CO2 deeper into the danger zone. It is hypothesised that nations are compelled to do this to maintain economic and military advantage. This is backed up by past evidence at critical decision making points. For example, the US Congress voted unanimously against inclusion into the Kyoto 1 agreement because it would have constrained its military while not constraining its adversaries in the same way and in the Copenhagen COP China refused to make any commitments to cut back coal consumption as it was intent on out competing Western economies.

The second is the game that nuclear weapons states must play on the size and operational status of their arsenals; the decisions in this game have always been about how to make cuts in the size of the arsenals and to minimise the risk of a premature launch by taking weapons off high alert status while trusting others to do the same. These agreements must be made in a world becoming more unstable due to climate change and where the risk of a pre-emptive strike is increasing due nuclear weapons proliferation.

The third game, in reference to the borrowing needed to fund the pursuit of nuclear weapons in the above question, is about maintaining the debt based economic system that military industrialisation competition needs. The fundamental assumption behind its modus operandi is that there is no limit to growth and things that we cannot afford now can be paid in the future by virtue of continued economic growth. However, once this impossibility is to be acknowledged then an economic system such as a carbon rationing or a carbon taxation must be introduced. Without this no agreement on climate change will be reached as fossil fuel consumption will continue to rise and the tensions it causes will propel nations towards nuclear weapons. However, once this is imposed it makes funding a military industrial complex impossible, so security must come centre stage to the negotiations.

Thus the three games outlined above are connected in a deadly dilemma. In an attempt to understand the dynamics of interconnected games a series of experiments were run across thee maths classes which extended the concept of the prisoners dilemma.

The basis of the experiment was as follows:

A class was given the opportunity to win either £1.50 which they could share amongst themselves or one person could win a bar of chocolate, which has a monetary value of 70p.

The game consisted of splitting the class into competing pairs of students. Each student in each pair is given two cards, one says “I love you and want to work for you and will do anything for you,” the other says “XXXX you buddy.” See Appendix A for the cards.

The rules are simple:

If both students play “I love you and want to work for you and will do anything for you” the cost of their love is £2 each.

If both students play “XXXX you buddy” the cost of their love is £8 each.

If one student plays “I love you and want to work for you and will do anything for you” and the other plays “XXXX you buddy,” then the student who plays the “I love you” card gets charged £10 for his love as a punishment for being so stupidly trusting and the one that plays the “XXXX you buddy” card gets charged only £1 as a reward for his ruthless thuggery.

The objective is to minimise the cost of love and the dilemma is clear. If both players trust each other and play the “I love you card,” the total cost of their love is £4. If both mistrust each other and play the “XXX you buddy,” total cost of their love is £16 as they seek to minimise their individual costs.

To play the game, the combined cost of love over five rounds was calculated and if this was kept below a given level, then the class could share the prize of real money. If not the person with the lowest cost of love could get the chocolate bar.
Thus the challenge is that a player not only has to trust his competitor, but also has to trust the outcome from the games that other competing pairs are playing.

The payoff matrix replicates the dilemma of nations making decisions on climate change. A nations could decide to pursue a zero carbon economy and it might cost them say £2billion. If his competitor refuses and pursues a fossil economy then the cost to the nation that opts for the zero carbon economy rises to £10billion as a result of having to cope with the resulting ecological damage and the loss of competitive advantage. If on the other hand, a nation decides to maintain a fossil fuel economy, the minimum cost will only be £8billion from the ecologic damage incurred but by maintaining competitive advantage they will not be liable for the full cost.  The actual costs are immaterial, all that counts is the relative values with respect to the choice, see Appendix B for the pay-off matrix.

The results follow for three classes:

Class 1

The target was to get “the cumulative cost of their love” below £90 across four simultaneous games and over five rounds. If all students played the love card, the minimum cost of their love would be £80, thus allowing two players to default and still win the money.


The results follow:



Conclusion of the game

In the first round, one player in each game played the “XXXX you buddy” card. The result was that it would be impossible for the class to win the money. Players in Games 1 and 2 collaborated and agreed to stick to the pattern of one player playing “XXXX you buddy” and the other playing “I love you.” This ensured that one player would get the lowest possible score and so win the bar of chocolate; the cost for this is that the bar of chocolate would have to be shared with amongst all the players in Games 1 and 2.  

Players in games 3 and 4 were not party to this agreement and so got nothing at the end.

Once the result became a foregone conclusion and the target for the minimum cost of love could not be achieved, players effectively lost interest but carried on out of a sense of duty.

Implications

In this game, once the initial sub optimal positions were set across all the games it was difficult to move away from it. This reflects the difficulty that nations face in negotiations when they have to move significantly from the positions that they have previously taken based on self-interest to those that are in the best interests of all parties.

Thus globally, nations that have already committed to high carbon and militarised societies will become entrenched in these positions, not just because of the conversion difficulty, but also because of the responses from other players that will be determined on the results of past rounds.

Once the result becomes fixed, interest in the game diminishes. This was reflected in the last UK election where climate change was not considered, despite the scientific community screaming for urgent and extreme action. However negotiations continue out of a sense of duty, thus the UK will continue sending delegates to the climate change conferences despite the impossibility of achieving a satisfactory result.

Despite the groups being unable to co-operate across all the games, small scale co-operation was made between games 1 and 2 to share the suboptimal prize (the bar of chocolate). This is reflective of the co-operation that is seen between states who are close competitors. Thus, the European and US co-operated on trade pacts and military alliances while Russia and China likewise co-operate on military and energy policies. However in each case the win from the localised co-operation is far less than that obtainable from globalised co-operation. 

Class 2


The target was to get “the cumulative cost of their love” below £90 across four simultaneous games and over five rounds. If all students played the love card, the minimum cost of their love would be £80, thus allowing two players to default and still win the money.

The results follow:


Conclusion of the game

In the first three rounds all players co-operated to play the “I love you” card and were on track to keep the cost of their love below £90 and win the money prize.

However in round 3 the co-operation fell apart. One player reneged on the agreement and by being the only player to play the “XXXX you buddy” card stole a lead on the rest of the players. In the last round, all players could still win the money, however the player who had previously played the “XXXX you buddy” was now incentivised to play the same strategy. If he played “XXXX you buddy” he would definitely win the bar of chocolate, even if someone else did the same.  This is exactly what he did. At the end of the game graciously shared the bar with his opponent, who both ate it and left. The rest sat there bemused. 

This is the emergence of a free-for-all scenario. It occurs when one player reneges on an agreement that has only a minimal chance of delivering the optimum solution even if all the other players are still prepared to work towards the wider agreement.

Implications

China has already embarked on a free-for-all strategy. Its carbon emissions initially from coal, and now from oil, are massively out of proportion to the rest of the world. They has taken effectively played the “XXXX you buddy” card against the rest of the world. From the outside, it is as if they have already decided that there is no point in going for a climate change agreement, so they will race to get everything they can while they still can. It is a highly dangerous strategy. If everyone reciprocates, then no one will survive. Even if no nation follows it, no one will survive. It is of note that India is now following China’s path as its closest competitor.



Class 3


The target was to get “the cumulative cost of their love” below £65 across three simultaneous games and over five rounds. If all students played the love card, the minimum cost of their love would be £70, thus allowing two players to default and still win the money. In the last round the minimum cost of love was reduced to £65


The results follow:


Conclusion of the game

The dynamics of this group were considerably different to the others. The sat closer together and spent more time discussing strategies between them. Their success in the first round of getting all to agree along with the communication they had set up between them provided the basis for reinforcement such that it became difficult to change the pattern that had been established. It is a similar observation to that of the first class, except that class had become stuck on the sub-optimal solution.

As they entered the last round still with no defections, the target for the minimum cost of love was reduced to £65 to incentivise someone to defect. Even this did not break the pattern that had now emerged as the social pressure to comply was so much greater than the temptation to go for personal gain.

On winning the £1.50 the class immediately went to college shop and bought two bars of chocolate which they shared equally amongst each other.

The class acknowledged that they were only able to achieve this because they were working closely together and said that had each competing pair been sitting in different rooms they would not have been able to achieve this.  Their success may also have been enabled by only three simultaneous games being played, rather than four.

Implications

If multiple games are being played where the result from can adversely affect the other, then they must be interconnected to achieve the optimum result, hence climate change, nuclear weapons and economic reform talks must be fundamentally integrated and the interconnections between these must thoroughly understood.

In these circumstances the optimum position can be achieved.

The problems outlined with class 1, where the individual games became stuck in a sub optimal initial solution, and of class 2, where a lone player went for a free-for-all strategy of damning everyone else and is then incentivised to maintain this, makes achieving the objective of climate change agreements extremely difficult. However failure to do so, guarantees failure in all games.

The challenge facing nations is that the prizes are somewhat different and much more is at stake. Instead of the combined money prize of £1.50 for collaboration, the prize now is that some people might get change to survive. Instead of mendacious behaviour being rewarded by chocolate bar that can be shared with nearest competitors, the prize is that a nation will be able preserve wealth right up to the point of their extinction. Neither is a great result.

If any optimism can the taken from this, it is that a clear interconnection between the games being played does enable the best collective result to be obtained, but this must first overcome the entrenchment of caused by past actions. 

Appendix A - Playing cards






Appendix B - Pay off matrix






Sunday, June 21, 2015

A Brief Analysis of the 2015 BP Statistical Review

The following analysis is based on the BP Statistical Review of World Energy 2015

A pdf version is available here and here


Summary

Fossil fuel consumption is increasing in all the developing regions of the world and outstripping reductions made by the developed world. It makes the prospect of climate change agreement at the December COP impossible to contemplate.

It is already well documented that the explosive increase in fossil fuel consumption across the developing world, in particular China, reflects the shift in manufacturing to these regions. This is especially so with products and services requiring steel and cement production which are unavoidably carbon intensive. This was initially reflected in exponentially expanding coal consumption. Now that Chinese coal consumption has leveled out, oil consumption is now expanding exponentially reflecting China’s transition into its next phase of destructive growth.

Today’s globalised economy interconnects national economies such that the wealth of one country is dependent on the wealth that others can create for it. In this environment prothletising about individual national successes in achieving carbon reductions is irrelevant.  What is needed is far more profound efforts to jointly reduce emissions. This can only be done with joint sacrifices.

The growth of renewables is stalling. It is concerning that this is happening when it still constitutes such a small percentage (1.81%) of the total global fossil fuel energy production. It severely challenges the arguments that are being put forward at the COP conferences that renewable technologies will provide the key to a zero carbon economy.

There is no evidence to substantiate the claim that developing economies will take up new low carbon technologies in such a significant way that they will leap-frog the fossil fuel consumption stage of past industrialised economies.

Given the severe state of climate change as measured by the Arctic ice cap melting and atmospheric CO2 already exceeding 400ppm, these figures demonstrate that unless we radically change our approach we will be unable to avoid the total collapse of our ecosystem and our extinction.

This set of data brings the concept of Mutually Assured Destruction (MAD) that formed the basis of the Cold War into a new and more brutal focus. Unless we can all agree on an immediate and significant reduction in CO2 emissions along with restoration of our ecosystem and successful geo engineering, then MAD is our fate. 

Basis of Data

This report is based entirely on the 2015 BP Statistics Review, which covers trends to 2014. All energy production and consumption is broken down into Millions of Tonnes of Oil Equivalent (MTOE) for easy comparison. There will inevitably be errors with this conversion factor, however it still provides a useful comparison for overall trends. 

Global Fossil Fuel Consumption

Global fossil fuel consumption continues to grow, albeit the rate of growth has slowed slightly. 

Despite the hype of renewables, it has not translated into a reduction in fossil fuels. The only time this has happened over the last 40 years was during the global recessions of 1980 and 2009.  By way of comparison, in 2009 fossil fuel consumption fell by 196 MTOE compared with an increase of 60 MTOE between 2013 and 2014.

Consumption is now 5 times higher than in 1965. From atmospheric CO2 measurements taken at Manu Loa since 1958, which have always shown an increasing trend, it is known that even 1965 levels were not sustainable in the long term.  

The extreme emissions of today are happening when the sequestration ability of the planet has been heavily compromised due to the impact of past damage and global heating. As such, rapid rises of atmospheric CO2 are to be expected in the very short term.

Today’s increase is being driven and sustained by economic growth in the Asia Pacific region.



Global Coal Consumption

Following the extraordinary expansion of coal consumption from 2000 to 2010, it is now either plateauing or returning to the previous levels of growth of the 1970s. It is not possible to determine which, other than to observe that global coal consumption grew by 15 MTOE last year.

Much has been made recently of China’s reduction in coal consumption; however reductions in growth have been more than offset by rises in Indian coal consumption. If India follows the pattern of China, its coal consumption could rise considerably and rapidly and then take many years to reduce back to zero.


Despite progress being made in China on renewables, declining from the current level of coal consumption will take too long to avoid runaway climate change. 



It is of note that Pakistan and Bangladesh coal consumption is not even visible on the chart, despite these nations once being part of India and having substantial populations.

Oil Consumption

Despite oil consumption declining in North America and Europe, it has risen in every other region of the world; in particular the Asian Pacific region. These rises have negated all the savings made in the developed world. 


Gas

As with oil and coal, gas consumption has risen in all regions of the world, with the exception of Europe.


Renewables

All developed nations are betting on an effective roll out of renewables as the primary basis of their climate change response at the COP talks. Despite the efforts over recent years, solar and wind still only produce 1.81% of the energy delivered by fossil fuels.




Most concerning is that the rate of increase has shown its first signs of slowing by quite clearly coming off the exponential trajectory that it was previously on.  

This data provides a strong warning that the concept that renewables can be rapidly expanded globally to replace fossil fuels is potentially flawed and that it is already approaching its limits.

The other main source of renewables is hydro. Globally this has shown a steady increase which on break down is seen to be largely driven by China whose hydro consumption has risen to about 250 MTOE, or about 30% of the global total. This has been achieved by damming every river that drains the Tibetan plateau at much financial cost and with a corresponding increase in international tension with its neighbours.  The others area of growth has been South America with the construction of dams on the tributaries to the Amazon. Both of these energy sources are likely to be challenged as climate change melts the Tibetan ice sheets and disrupts Amazonian rainfall. Consequently, there is not much scope for further growth and even maintaining this level will is likely to be impossible in the long term. 

It is of note that in hydro is currently generating about 4 times that of wind and solar and a global loss of this energy source could negate much of the gains from wind and solar. 




Saturday, May 16, 2015

Swindon Think Slam, Second talk - why do we let politicans lie?



Why do we let politicians lie to us? 

We could try and persuade ourselves that we are powerless to stop them or we can blame the press for not holding them properly to account or pretend to ourselves that that they are of such low life that we should expect nothing better.  

But, what would happen if we got our wish and the politicians suddenly spoke the truth, what would they say to us?   

They would say something like this; 

Atmospheric CO2 is at 400ppm and increasing so fast that catastrophic global heating is unavoidable. As a result sea level rises will be so high that we must immediately start evacuating our coastal cities and decommissioning our nuclear reactors.

There will be no energy to enable us to do this, because we will either run out of energy or the climate change agreements we reach in December this year will be so draconian that we won't be allowed to burn what we have. All the critical life support systems in our energy intensive economy will cease to be reliable, from the refrigerators in your homes to the logistic systems that deliverer food and emergency aid.  

In the chaos that we face, we will be unable to trust any other nation to abide by international law and we expect increased proliferation of nuclear weapons. 

There will be no money to fund responses to any of this because our debt based financial system relies on future prospects of growth for its liquidity. As there are no prospects for the future, there will be no money.  

With a global population heading towards 10 billion, all these problems will be magnified by mass migration, panic and endless war.   

That is what our politicians would tell us if they were to tell the truth, and then they would ask us to vote for the cold blooded rational policies to address these crises so they had the mandates they need but which we fear giving to anyone.  

And what would you do if you heard the politicians telling everyone the truth and you realised the masses now know what you fear. You will do what everyone else will do, you will race to your nearest Tesco to rip the food of the shelves and beat to a pulp anyone that tries to stop you, meanwhile everyone will be doing the same. 

It will be a free for all, and it is to stop this that we accept the lies of our politicians. We all know that none of them can balance the budgets, fund the NHS, tackle climate change or solve wealth inequality, but we accept these failures as the price for stability and we hope against all reason that the lying can continue indefinitely. 

So we go to the ballot box and partake in the charade, because that's all we can do.  

See http://www.amazon.co.uk/The-Vortex-Violence-losing-climate-ebook/dp/B00PUNSI06

Swindon Think Slam, first talk - How Long do you want to live?



How long do you want to liveFrom the time of Stoneage to the onset of the 1st World War, the life expectancy of a male in the UK was around 52.  If this were today, there would be less than a 50% chance that I would be here.  

Today life expectancy for a male is 79 years, giving me 27 chances to attempt win this event 
If I died of a heart attack now there would be lamentations that my passing was too early. Today no one is expected to die young. 

Many people are not even expected to die old.  80 years olds are often subjected to invasive surgery to drag out their existence for a few more years.  

If you have used your mind, body and soul to its fullest potential so that fatigue is flowing through your veins, do you really want to drag out your existence till you become a burden on society or should you welcome the long sleep with the satisfaction that you will live on in the memory of those that you love.  

In the techno-centred world that traps us allsuch talk is dismissed as a slide towards fascism. But our techno-centred world can only survive by destroying the natural and depriving us from ever using our minds, bodies and souls to their full capabilities. Instead, our minds are filled with trivia, our bodies with junk food and poisonous chemicals and the spirit of our soul with the self-interest needed for survival in a hyper competitive industrial world on the point of collapse.  

Today, few people live life to the full.  Rarely does anyone connect with nature by eating a fish they caught and which wriggled in their hands as it died; we get red meat from McDonalds rather than joining a hunting party to chase down quarry and kill it with a stab to the neck, nor do we have to fight to death for things that are not for us while fuelled only by altruism and principle.

So perhaps the reason why we try to so hard to drag out our existence is because our society deprives us of so much and we cling onto life in the hope that quantity replaces quality. 

We reconcile this dilemma within the myriad of conflicts that our dystopian techno-society creates for us. The same society that diminishes us also provides the techno fixes to extend life expectancy of a new born to 100 years while threatening his early death with runaway climate change and radioactive poisoning.  

So what do we do with the old and infirm that are being kept artificially alive long after their natural life expectancy and when society has exceeded all limits of sustainably.   

The Innuit community in Greenland living on the edge of survival in the most brutal environment possible were acutely aware of this.  Once their elderly women resigned themselves to fact they were of no benefit to the community they jumped off a cliff to their death. 

Perhaps if we told todays elder generation that the quid pro quo for the profligate lifestyle that they have profiteered from is that they must forgo artificial extension to their lives then perhaps we might have the dialogue we need to avoid a decent into dystopia. This would put the rather mundane debate about how we fund the NHS during the election into a more realistic perspective.