Navigating the Pareto front: Understanding economic – environmental tradeoffs under value diversity among stakeholders

This research project funded through the IIASA’s Systems Analysis Forum (SAF) explores methods of finding efficient, consensus-enabling solutions reconciling competing goals of diverse agents with potentially unequal bargaining positions.

Johann Dréo | Pareto front

Johann Dréo | Pareto front

Undertaking a coordinated climate action or implementing the United Nations’ Sustainable Development Goals (SDGs) are examples of challenges, which the international community is currently facing. Addressing these problems requires balancing competing interests and goals of different countries while pursuing the common good in a most efficient way. On a more abstract level, these challenges translate into multi-criteria optimization problems aiming at finding efficient solutions, which are satisfactory to all of the concerned agents (e.g., countries) with diverse preferences (e.g., defined by a country’s options and requirements for future development) and diverse bargaining positions (e.g., wealth, development level or the international position of a country).

A compromise solution must be efficient in utilizing the available resources. An efficient solution is defined by a certain distribution of resources between agents in such a way that it is not possible to further improve the objectives of one agent without sacrificing interests of some other agent(s). The set of all efficient solutions is called the Pareto front.

The Pareto front typically contains a large (or infinite) number of efficient solutions, hence examining each one of them separately in order to assess whether it may serve as a compromise solution is not a feasible approach. In this project we propose computationally effective method of navigating the Pareto front in search for optimal robust compromise solutions. It relies on a suitable aggregating function, which convolutes objectives of all agents into a single overarching criterion serving to establish a preference relation between each pair of efficient solutions.

In this project we survey available approaches to constructing the aggregating function and explore their potential to indicate various desirable meta-level features of the efficient solutions such as “good balance” or “fairness”. The latter can range from the utilitarian approach based on maximizing the sum of the agents’ to alternative ones concerned with protecting the interests of the least satisfied agents against interests of agents with stronger bargaining position (e.g., the egalitarian approach, “proportional fairness” or “relative fairness”).

In addition, we intend to apply the selected promising methods in a stylized model of multi-regional economic development with the climate change feedback in order to identify strategies ensuring equitable and robust sustainable pathways. 


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Last edited: 22 February 2017

CONTACT DETAILS

Elena Rovenskaya

Program Director

Advanced Systems Analysis

T +43(0) 2236 807 608

CONTACT DETAILS

Ulf Dieckmann

Program Director

Evolution and Ecology

SA-YSSP Dean (IIASA)

Capacity Building and Academic Training

T +43(0) 2236 807 386

Timeframe

June 2016 - June 2017

International Institute for Applied Systems Analysis (IIASA)
Schlossplatz 1, A-2361 Laxenburg, Austria
Phone: (+43 2236) 807 0 Fax:(+43 2236) 71 313