Trade versus the Environment: Strategic Settlement from a Systems Engineering Perspective

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Trade versus the Environment Strategic
Settlement from a Systems Engineering Perspective

• KEITH W. HIPEL
• University Professor, PhD, PEng, FIEEE, FCAE,
  FINCOSE, FEIC, FRSC, FAWRA
• Department of Systems Design Engineering
• University of Waterloo
• Waterloo, Ontario, Canada N2L 3G1
• Telephone [phone], ext. 32830
• Fax [phone]
• Email kwhipel_at_uwaterloo.ca
• Home Page www.systems.uwaterloo.ca/Faculty/Hipel/
  
• Conflict Analysis Group http//www.systems.uwater
  loo.ca/Research/CAG/

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ABSTRACT

• The key goal of this research is to employ a
  Systems Engineering approach to conflict
  resolution to clearly identify the ubiquitous
  conflict taking place at the local, national and
  global levels between the basic values underlying
  trading agreements and those principles providing
  the foundations for environmental stewardship,
  and to suggest solutions as to how this most
  basic of disputes can be responsibly resolved.
  Subsequent to outlining the current situation
  involving free trade among nations and associated
  environmental problems, the positions of both
  sides in this chronic dispute between trade and
  the environment are summarized. Supporting the
  stance of free trade is the fundamental driving
  forces of profit maximization, while in direct
  opposition to this market-driven value system are
  the principles of maintaining a healthy
  environment and related social welfare
  objectives. Accordingly, this global clash of
  values is systematically studied as a game in
  which the values of the Global Market-Driven
  Economy (GMDE) are in confrontation with those of
  a Sustainable Ecosystem (SES) philosophy. A
  Systems Engineering tool for strategic analysis,
  called the Graph Model for Conflict, is utilized
  for realistically capturing the key
  characteristics of this type of complex conflict
  and for providing strategic insights regarding
  its potential resolution. In particular, a
  systematic Graph Model investigation reveals that
  the environment and social standards will
  continue to deteriorate if the entrenched
  positions and related value systems of both camps
  persist. However, based on the strategic
  understanding gained from this formal conflict
  study, a number of positive proposals are put
  forward for resolving this conflict from a
  win/win perspective, at least in the long run. To
  highlight inherent advantages of employing a
  formal Systems Engineering tool for addressing
  strategic conflict problems, the application is
  used for illustrating how the Graph Model can be
  conveniently applied to a specific dispute and
  comments regarding the capabilities and benefits
  of the conflict methodology are provided at each
  step in the modeling and analysis procedure.

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REFERENCES

• Hipel, K.W. and Obeidi, A., Trade versus the
  Environment Strategic Settlement from a Systems
  Engineering Perspective, Systems Engineering,
  Vol. 8, No. 3, pp. 211-233, 2005.
• See the web page of the Conflict Analysis Group
  at the University of Waterloo to obtain an
  extensive list of references.
• Conflict Analysis Group http//www.systems.uwater
  loo.ca/Research/CAG/

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OBJECTIVES

• Model the conflict of values between the
  proponents of the Global Market-Driven Economy
  (GMDE) and those supporting a sustainable
  Ecosystem (SES).
• Analyze this global conflict using the Graph
  Model for Conflict Resolution and its associated
  decision support system GMCR II to gain strategic
  insights.
• Suggest what can be done politically to promote
  sustainable development, including responsible
  and equitable utilization of water.

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RECOMMENDATIONS

• Extensive educational and lobbying efforts are
  required for encouraging market-place proponents
  to change their value system by putting a higher
  priority on sustainable development.
• International trade agreements such as those of
  the World Trade Organization (WTO) and North
  American Free Trade Agreement (NAFTA) must be
  reformed or replaced to reflect these values.

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CONTENTS

• TRADE AND THE ENVIRONMENT
• CONCEPTUALIZING THE CONFLICT A CLASH OF VALUES
• CONFLICT MODEL
• ANALYTICAL RESULTS AND INSIGHTS
• SENSITIVITY ANALYSIS MODERATE PREFERENCE CHANGE
• ACHIEVING GLOBAL SUSTAINABLE DEVELOPMENT
• REFORMING GLOBALIZATION

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WORLD CRISIS

• Consumption
• Energy
• Population growth
• Widening gap between rich and poor
• Pollution
• Extinction of species
• Water shortages

Encouraged by international trade agreements
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INNER CONFLICT OF VALUES

• Basic drive to survive and prosper
• Versus
• Desire to pressure environment in a pristine state

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SOCIETAL LEVEL

• Cumulative intense economic activities
• Versus
• Environmental preservation

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SUSTAINABLE DEVELOPMENT

• Economic needs of humanity
• are balanced against
• Preserving nature for future generations

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AWARENESS AND RESPONSIBILITY

• Society
• Versus
• The Environment
• Humans must come to terms with this chronic
  conflict of values existing within and among
  themselves and take responsible actions to
  resolve it.

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TRADE AGREEMENTS

• BRETTON WOODS AGREEMENTS
• World Bank
• International Monetary Fund (IMF)
• General Agreement on Tariffs and Trade (GATT)
  (1947)
• OTHER AGREEMENTS
• WTO (1995)
• NAFTA (1994)
• FTAA (Free Trade Area of the Americas will
  replace NAFTA)
• Canada/US Auto Pact (socially responsible)
• European Community (EC, integrated agreements)

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TRANSNATIONAL ENVIRONMENTAL TREATIES

• No comprehensive international environmental
  treaty is in place.
• Some treaties exist in specific areas
• Law of the Sea
• Montreal Protocol on Substances that Deplete the
  Ozone Layer
• Basel Convention on banning trade in hazardous
  wastes
• Kyoto Protocol for reducing greenhouse gases

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ENVIRONMENTAL IMPACTS OF TRADE

• Trade rules are globally operational
• And
• No encompassing environmental treaty exists.
• Many specific cases in which trade-based
  decisions harmed the environment and human health.

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CONCEPTUALIZING THE CONFLICT A CLASH OF VALUES
Sustainable Ecosystem (SES) Values
GLOBAL MARKET-DRIVEN ECONOMY (GMDE) Values
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POSITIONS AND VALUE SYSTEMS

• Global Market-Driven Economy (GMDE)
• Sustainable Ecosystem (SES)
• Background information for carrying out a formal
  conflict study

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GMDE VALUE SYSTEM

• Prioritizes free trade and globalization based on
  the principle of a market driven economy.
• Many benefits will follow.

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SES VALUE SYSTEM

• Prioritizes environmental stewardship,
  biodiversity, sustainable development, human
  rights, democratic principles, and other related
  issues that are important to societal well-being.
• Highly critical of current free trade agreements,
  such as WTO agreements and NAFTA which are
  founded on market economics.

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CONFLICT OF VALUES

• Trade
• Versus
• The Environment
• Carry out strategic analyses to find ethical and
  just resolutions.

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CONFLICT RESOLUTION

• Use a formal systems engineering approach called
  the Graph Model for Conflict Resolution to model
  and analyze the Conflict of Values Trade versus
  the Environment.
• This flexible methodology is implemented using
  the decision support system GMCR II.

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DECISION MAKERS AND OPTIONS
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CONFLICT OF VALUES

• Reflects a generic conflict taking place around
  the globe.
• Systematically studying this ubiquitous conflict
  can provide understanding and wisdom for solving
  similar, but more complicated realworld disputes
  over trade and the environment.
• First time that this generic conflict has been
  strategically analyzed.

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CARRYING OUT A CONFLICT STUDY
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GRAPH MODEL FOR CONFLICT RESOLUTION

• Theory is founded upon a rigorous mathematical
  framework, utilizing concepts from graph theory,
  set theory and logicthe mathematics of
  relationships.
• Design is mathematically based but completely
  nonquantitative in nature.
• Can handle any finite number of decision makers
  and options.
• Utilizes relative preferences.
• Can handle irreversible and common moves.

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DESIGN FEATURES OF THE DECISION SUPPORT SYSTEM
GMCR II

• GMCR II is programmed in C, possesses a
  carefully designed data structure, and can handle
  small, medium and large models.
• A 32-bit doubleword represents a specific
  selection of options wherein each digit or bit
  equals 1 or 0 to indicate whether or not the
  option it represents is taken or not.
• This design can accommodate up to 32 options,
  which is more than enough for all realworld
  applications considered to date.

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GMCR II STRUCTURE
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CONFLICT MODEL
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INFEASIBLE STATES

• Each option can be selected or not taken.
• Hence, there exist states.
• Remove states that cannot occur in real world.
• Reform and influence are mutually exclusive.
• Reform and promote are mutually exclusive.
• Reform and pressure are mutually exclusive.
• 36 feasible states remain after removing the
  infeasible ones.

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FEASIBLE STATES
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EXECUTING A CONFLICT STUDY
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PREFERENCES

• Rank states from most to least preferred for each
  decision maker (DM) where ties are allowed.
• In option prioritization, preferences of a DM are
  expressed using preference statements about
  options that are listed in a hierarchical fashion
  from most important at the top to least important
  at the bottom.
• The preference statements follow the rules of
  first order logic.

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PREFERENCES

• Assuming transitivity, an algorithm uses the
  preference statements to rank the states for the
  DM.
• States can be subsequently sorted manually using
  direct ranking.

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REFERENCE STATEMENTS
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GMDE PREFERENCE STATEMENTS
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SES PREFERENCE STATEMENTS
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RANKING OF STATES
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COMMENTS ON PREFERENCE ELICITATION

• GMCR II only requires relative preferences for
  each decision maker.
• The problem of obtaining cardinal preference
  information, such as utility values, is avoided.
• GMCR II develops an ordinal ranking of states
  from most to least preferred and allows for ties.
• The graph theory methodology can handle
  intransitive preferences.

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TYPES OF VALUES

• Held or protected value an enduring, moral
  principle
• Example Protecting the environment from
  unwarranted economic activity.
• A held value should not be traded off with other
  values.
• Assigned value worth of something to an
  individual or organization within a given context
• Illustration aesthetics may be valued less if it
  becomes too expensive.

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CONFLICT, ETHICS AND VALUE SYSTEMS

• Conflicts arise because of differences of
  objectives or value systems among participants.
• Each participant or decision maker has his or her
  criteria for deciding upon its preferences among
  states or possible scenarios.
• An ethical or moral environmentalist would
  prioritize criteria or objectives such as
  minimizing environmental impacts, as well as
  maximizing fairness and societal well being.
• However, ethics is measured relative to a
  specific value system.
• A participant's ethics is reflected in the
  choices he or she make in a given situation.

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PREFERENCE ELICITATION IN GMCR II
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EXECUTING A CONFLICT STUDY
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INPUT INTERFACE

• Decision Makers
• Options
• Feasible States
• State Transitions
• Preferences

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OUTPUT

• Input information
• Individual stability results
• Equilibria
• Coalition analysis
• Sensitivity analysis
• Tracing the evolution of the conflict

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STABILITY ANALYSIS

• A state is stable for a DM if it is not
  advantageous for the DM to unilaterally move away
  from it.
• Because people may behave differently under
  conflict, stability can brought about in a
  variety of ways.
• A solution concept is a mathematical description
  of how a DM may behave in a dispute.
• Table 5 lists a range of solution concepts.

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SOLUTION CONCEPTS
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COMMENTS ON REALISTICALLY DESCRIBING HUMAN
BEHAVIOUR IN CONFLICT SITUATIONS

• People can behave in different ways under
  conditions of conflict.
• A range of solution concepts mathematically
  define different types of human behaviour.
• Solution concepts are precisely stated using set
  theory, logic and graph theory-the mathematics of
  relationships.
• Directed graphs or reachable lists keep track of
  movements when decision makers dynamically
  interact.
• The graph model methodology is entirely
  nonquantitative yet completely mathematical and
  axiomatic.

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ANALYTICAL INSIGHTS

• Predict possible compromise resolutions.
• Determine how a given DM may wish to respond in
  an optimal fashion within the social constraints
  of the conflict.
• Ascertain if and when it is advantageous to
  cooperate with others in order to jointly reach a
  more preferred outcome.
• Find out how the conflict could dynamically
  evolve from a status quo state to an eventual
  resolution.

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STABILITY ANALYSIS

• GMCR II analyzes each state for stability for
  each DM according to each solution concept.
• An equilibrium is stable for all DMs with respect
  to a given solution concept.
• An equilibrium constitutes a possible compromise
  resolution since the conflict will stop when it
  reaches an equilibrium during the evolution of
  the dispute.

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EQUILIBRIA
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DECISION MAKERS AND OPTIONS
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CONFLICT EVOLUTION
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SENSITIVITY ANALYSIS

• Determine how meaningful changes in the model
  parameters can influence the stability results.
• The specific types of sensitivity analyses to
  carry out are dictated by the particular
  characteristics of the problem being studied.

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TYPES OF SENSITIVITY ANALYSES

• Preference changes
• Option modification or expansion
• Side payments
• Bring other decision makers into the dispute
• Consideration of other kinds of human behaviour
  (solution concepts)
• Coalitions
• Misunderstandings (called hypergames)
• Entertainment of other modes to bargaining and
  negotiation

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SENSITIVITY ANALYSIS MODERATE PREFERENCE CHANGE

• Make meaningful changes in the ranking of states
  for both GMDE and SES (see Section 5).
• Determine how the equilibrium results change.
• The findings are similar to the equilibria
  predicted by the original model.
• Equilibrium results are fairly robust with
  respect to the preference changes

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INSIGHTS

• None of the strong equilibria in Tables 6 and 10
  include GMDEs reform option.
• To obtain reform, GMDE must have a positive
  attitude towards environmental stewardship.
• SES must understand that unless GMDE changes its
  value system reform is not possible.
• SES could better educate the general public and
  GMDE about the advantages of being
  environmentally responsible and obtaining a
  win/win resolution.

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ACHIEVING GLOBAL SUSTAINABLE DEVELOPMENT

• Another form of sensitivity analysis is performed
  by assuming that GMDE substantially revises its
  relative preferences.
• Demonstrations in Seattle, Quebec, Cancun and
  elsewhere against global trade are a chronic
  annoyance for GMDE.
• GMDE may reform its agenda as long as these
  demonstrations are not perceived as a source of
  intimidation.

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ENLIGHTENED PREFERENCES FOR GMDE

• A revised preference structure is proposed based
  on the premise that GMDE intends to reform its
  agenda.
• An enlightened preference structure for GMDE is
  proposed such that the most preferred states are
  those that contain reform or not influence if SES
  does not pressure trade negotiators (3-1 IF -6).
  The second most important preference for GMDE is
  SES not pressure (-6).

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REFORMED PREFERENCE STRUCTURE
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ORIGINAL PREFERENCE STATEMENTS
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ENLIGHTENED PREFERENCES FOR GMDE

• The modified preference statements for GMDE are
  shown on the left in Table 11 while the unchanged
  preferences for SES are listed on the right.
• Table 3 shows the preference statements used in
  the original conflict analysis.
• Notice that the only change in GMDEs preferences
  is that its most important statement given in the
  top left of Table 3 as -31 is replaced by the
  conditional preference statement in the top left
  of Table 11 written as 3-1 IF -6.

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BREAKTHROUGH WITH GMDES ENLIGHTENED ATTITUDE

• GMDEs preference changes are not very dramatic.
• Hence, they are credible and politically feasible
• Equilibria are obtained that contain the reform
  option being taken (states 5, 10, 15, and 20)
• State 20 is a strong equilibrium

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DESIRABLE CONFLICT EVOLUTION
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BREAKTHROUGH

• The chronic Conflict of Values dispute is an
  example of what Burton (1987) calls a deep-rooted
  conflict.
• Given a set of entrenched preferences or
  deep-rooted value systems, GMCR II can predict
  the possible resolutions and associated insights.
• GMCR II shows that a reasonable change in GMDEs
  preferences (see Tables 8 and 11) can result in
  reform taking place (Table 13).
• Facilitation, mediation and other procedures can
  help participants in a conflict to better
  understand one another so positions can shift and
  thereby produce enhanced strategic results such
  as state 20.

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REFORMING GLOBALIZATION

• Strategic analyses reveal that a sustainable
  resolution to the conflict of trade versus the
  environment is possible.
• Specific suggestions are put forward in this
  section as to how reform can be implemented.

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1909 BOUNDARY WATERS TREATY BETWEEN CANADA AND
THE USA

• Example of a successful bilateral treaty that
  espouses integrative water resources management.
• Deals with water quality, water quantity, air
  quality and other environmental issues between
  Canada and the USA.
• Based on the principle of equity between the
  citizens of Canada and the USA and environmental
  integrity principles.
• Is a good model for helping to design
  Multilateral Environmental Agreements.

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INTERNATIONAL JOINT COMMISSION (IJC)

• International mediator for boundary water
  disputes between Canada and the USA.
• Composed of three members from Canada and three
  from the USA.
• IJCs mandate is dictated by the Boundary Waters
  Treaty of 1909.
• Can make recommendations on a water or
  environmental dispute put forward by either
  country.

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INTERNATIONAL JOINT COMMISSION (IJC) (Contd)

• ICJ uses the best experts from both countries to
  carry out its background studies when it comes up
  with an impartial recommendation for settling the
  dispute.
• In some cases, the ICJ can make a binding
  judgment.
• The Boundary Water Treaty has worked extremely
  well over the years and is an ideal model for
  framing similar international treaties.

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POLICY DESIGN

• Design policies, laws, treaties and other
  agreements based upon ethical principles
  concerning the environment and peoples
  well-being.
• These types of principles must be an integral
  part of any economic or trading agreement.
• Take stakeholders viewpoints into account.

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POLICY DESIGN (Contd)

• Use both carrot (economic incentives) and
  stick (severe fines) approaches to ensure
  compliance.
• Multiple Criteria Decision Analysis (MCDA) can be
  useful in policy design when evaluating policy
  alternatives using both nonquantitative and
  qualitative criteria where held principles are
  given higher priority.
• Include an effective dispute resolution mechanism
  within which formal conflict techniques could be
  employed.

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RELIABLE INFRASTRUCTURE FOR SOCIETAL SYSTEMS

• Strong, equitable and reliable infrastructure is
  required to meet the basic needs of citizens.
• Society needs properly designed electrical
  systems, reliable water distribution systems, and
  other policies and programs for societal
  well-being and safety.
• Solid infrastructure provides a high-level
  playing field upon which people and organizations
  can compete or cooperate to economically produce
  high quality products and services that are
  sustainable.
• Society requires policies and rules that
  encourage ethical behavior to produce overall
  results which are beneficial to society and do
  not harm the environment.

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PARTICULAR RESEARCH IN ETHICAL SYSTEMS DESIGN
ENGINEERING

• Reform or replace trade agreements such as the
  WTO agreements and NAFTA, which only take into
  account the one-dimensional goal of economic
  gain.
• Society can prosper under policies that directly
  consider multiple objective needs that hold
  proper ethical values of both individuals and
  society at a higher level than profit
  maximization.
• Only design intelligent and integrated systems
  that are ethical and effective.

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ETHICAL TRADE AGREEMENTS

• Follow principles of sustainable development.
• Environmental standards and controls as well as
  other issues related to societal well-being must
  be incorporated into any trade agreement as
  binding clauses.
• Monetary fines and other sanctions can be used
  to punish violators using stick approaches.
• Financial and reputational carrots can be used
  to reward conformers.
• This provides a level playing field for true
  competition to take place.

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WATER CORPORATIONS DESIRE

• Certainty
• Permits sound economic planning
• Performance-based regulations
• Provides a level playing field within each type
  of industry.

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THE GLOBAL PLAYING FIELD

• Design a level global economic playing field
  resting on the foundations of environmental
  stewardship, key societal values, and reliable
  infrastructure.
• Corporations and economic entities can openly
  compete according to their basic design and value
  systems of pursuing profit maximization.
• The playing field would be entirely located
  within the realm of sustainable development so
  all economic competitors can claim they behave
  ethically according to their value systems.

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WIN/WIN RESOLUTION

• Strategic analyses show that environmental and
  social education are required to encourage
  proponents of the Global Market-Driven Economy to
  become environmentally and socially aware.
• Environmental and social concerns should be held
  at a higher priority than economic values in
  international agreements.
• WTO and NAFTA must be radically restructured or
  else replaced.
• Agreements should empower individuals and not
  large corporations and special interest groups.

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THE LOBBYING DILEMMA

• Citizens in both the USA and Canada have been
  essentially disenfranchised due to lobbying by
  large corporations and other interest groups.
• Campaign donations by lobby groups win the
  loyalty of politicians.
• Hence, electoral reform is urgently needed and
  only small campaign donations should be permitted
  by individuals.

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END OF THE COLD WAR

• Anatol Rapoport predicted that an enlightened
  Soviet Leader would end the Cold War.
• (1983 presentation at the University of Waterloo)
• The US Government was incapable of instituting
  real change because of its suffocating lobbying
  system.
• Soviet Premier Gorbachev stopped the ridiculous
  Clod War in 1990.
• Likewise, China has a unique historical
  opportunity to lead the world in green house gas
  reduction.

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ADAPTIVE SYSTEM OF SYSTEMS DESIGN TO ENSURE
ROBUSTNESS

• Deng Xiao Pings economic system design of the
  late 1970s was highly successful in modernizing
  China.
• Global warming was not perceived as a serious
  physical systems problem at that time.
• If China does not update or replace its economic
  model to substantially reduce greenhouse gas
  emissions, the current economic system will
  dramatically fail.
• Require an integrative systems model that adapts
  to changing environmental and societal
  conditions.

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ENHANCED DECISION MAKING

• Engineering is all about design.
• Design is creative problem solving.
• Informed decision making to benefit stakeholders
  within a sustainable, integrative and adaptive
  system of systems perspective.

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SYSTEMS THINKING

• Systems Engineering
• Operational Research
• Management Science
• Decision Analysis
• Provide formal tools for addressing challenging
  large scale system of systems problems from a
  complex adaptive systems viewpoint.

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STRATEGIC OPPORTUNITIES IN SYSTEMS ENGINEERING

• Expand the theory of system of systems
  engineering including complex adaptive system of
  systems theory.
• Tackle pressing global complex system of systems
  problems.
• Reference Hipel K.W., Jamshidi, M.M., Tien,
  J.M., and White III, C.C. The Future of Systems,
  Man, and Cybernetics Application Domains and
  Research Methods, IEEE Transactions on Systems,
  Man, and Cybernetics Part C Applications and
  Reviews, Vol. 37, No. 5., pages 726-743, 2007.

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GLOBAL SYSTEM OF SYSTEMS CHALLENGES

• Extreme Overpopulation
• Climate change Food
• Water Infrastructure
• Pollution Services
• Deforestation Finances
• Energy Industry
• Widening gap between rich and poor
• Security Nuclear weapons
• War Unknown unknowns

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AMERICAN FINANCIAL SYSTEM

• Value system is in reverse.
• Society serves the system.
• Financial system should serve society.
• Unethical and unfair to individual citizens.

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AMERICAN FINANCIAL SYSTEM

• Removal of regulations protecting society.
• Market fox is guarding the chicken coop.
• System collapses from greed and indigestion.
• Robustness removed.

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AMERICAN FINANCIAL SYSTEM

• Subprime mortgages traded globally
• Mortgages lenders disconnected from the mortgage
  buyers.
• Unbounded uncertainty in this complex system of
  systems.

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GLOBAL WARMING

• Distorted value system.
• Economics is held at a much higher priority than
  humans life support system of systems.
• Atmospheric systems is highly unstable.
• Irreversible change may gradually or unexpectedly
  occur.

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END OF THE COLD WAR

• Anatol Rapoport predicted that an enlightened
  Soviet Leader would end the Cold War.
• (1983 presentation at the University of Waterloo)
• The US Government was incapable of instituting
  real change because of its suffocating lobbying
  system.
• Soviet Premier Gorbachev stopped the ridiculous
  Clod War in 1990.
• Likewise, China has a unique historical
  opportunity to lead the world in green house gas
  reduction.

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US MEDICAL SYSTEM

• Distorted value system.
• Profit maximization.
• The sicker you are, the more you pay.
• Unfair society.

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CANADIAN, GERMAN AND FRENCH MEDICAL SYSTEM

• Ethical value system.
• Universal coverage.
• Equal risk sharing.
• Everyone pays the same.
• Robust society.

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INSIGHT

• An equal risk sharing, universal coverage,
  medical system can be designed using a
• public,
• private or
• mixed system
• Design a system that can deliver in practice
  according to the underlying values of equal risk
  sharing and universal coverage.

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EFFECTIVE MEDICAL SYSTEM

• Decide upon underlying values.
• Design a system that works in practice according
  to culture, tradition, and other factors.
• Compare the various implementation designs
  according to criteria that reflect the underlying
  values.
• Improve system according to performance criteria.

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OPPORTUNITY FOR THE GLOBE AND US LEADERSHIP

• US President Barak Obama could use the financial
  crisis to meaningfully address climate change as
  well as other environmental and social issues.
• Institute an integrative and adaptive global
  governance system.
• A unique historical opportunity for the USA.

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CHINA

• Bright highly educated leaders.
• An enlightened leader has the power to implement
  dramatic changes (ex. Deng Xiao Pings economic
  reforms of the late 1970s).
• Increasing gaps between the rich and poor.
• Massive environmental problems.
• Huge investments in education and infrastructure.

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USA

• Legacy of neo-conservative incompetence.
• Financial crisis gives chance of real reform by
  Obama.
• Smothering lobbying system stifles needed
  political initiatives.
• Setbacks in social and environmental reforms.
• Increasing gap between the rich and poor.
• A spirit of innovation and entrepreneurship.

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EUROPEAN UNION

• Informed, highly trained leaders.
• Cooperatively implemented real free trade over
  many years.
• Socially and environmentally responsible.
• Fairness in wealth sharing.
• Huge investment in research and development.
• A race to the top.

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MODELING PHILOSOPHY OF THE GRAPH MODEL FOR
CONFLICT RESOLUTION

• Determine the best a decision maker can do on his
  or her own.
• Check if the decision maker can do even better by
  cooperating with others through coalition
  formation.

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Multiple Criteria Decision Analysis (MCDA)

• Consideration of both quantitative and
  qualitative criteria when comparing alternative
  solutions to a problem
• Screening out inferior solutions from further
  analyses
• Modelling interdependencies among alternatives
  when considering combinations of alternatives as
  possible final choices
• Handling uncertainty using fuzzy set theory and
  rough sets
• Classification of alternatives according to
  nominal categories
• MCDA-based bargaining and negotiation
• Sorting according to case-based reasoning
• Decision support systems in MCDA

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Applications

• Case studies to assess and demonstrate the
  validity of new methodologies and their
  implementation
• Studies in bargaining and negotiation in water
  resources management, environmental engineering,
  labour-management relationships, international
  trade, privatization of public infrastructure,
  sustainable development, brownfield
  redevelopment, and other fields
• Practical policies for improving environmental
  enforcement
• Multiple criteria decision analysis in water
  supply, pollution clean-up, waste disposal,
  infrastructure privatization, and other
  alternative-choice problems