Noncooperative game theory to ensure the marketability of organic fertilizers within a sustainable circular economy

Abstract

To optimize the environmental performance and the conflicting economic interests of the main stakeholders that interact within circular integrated waste management systems (CIWMSs), life cycle analysis and a game-theoretical model-based on the Stackelberg equilibrium-were integrated into a multiobjective optimization framework. The framework was used to determine the operational decisions and the configuration of a CIWMS that simultaneously minimize the total global warming impacts (GWIs) and maximize the profits of (i) the waste managers that valorize the municipal organic waste generated in the Spanish region of Cantabria and (ii) the regional farmers that purchase the resulting organic fertilizers. A bilevel optimization problem was formulated and solved by replacing the lower-level problem with its equivalent Karush-Kuhn-Tucker conditions. The balance between the stakeholders' objectives is reflected in the low prices set for the organic fertilizers (0-2 €·metric ton-1 of compost and 0-1 €·metric ton-1 of digestate). Although the minimal GWIs are constrained by the waste managers' profits, it is possible to improve the values of the objective functions by increasing the waste management tax. The proposed framework proved to be useful to plan for a sustainable circular economy, warranting the profitability of organic fertilizers for both ends of the supply chain.