PIMS Chats with Ivar Ekeland

Ivar Ekeland was the Canada Research Chair in Mathematical Economics at the University of British Columbia from 2003 to 2011. During his career, he has served as the President of Université Paris-Dauphine, Director of the research centres CEREMADE and Institute Finance-Dauphine as well as Director of PIMS from 2003 to 2008. He has been awarded prizes from the French Academy of Sciences, the French Mathematical Society, and the Belgian Academy of Sciences and has received honorary doctorates from UBC, from Saint Petersburg State University of Economics and Finance and from the University of Vienna.

Ekeland is the founding editor of the Annales de l'Institut Henri Poincaré-Analyse Nonlineaire and the editor-in-chief of Mathematics and Financial Economics. He has written several books, including reflections on, or popularization of, mathematics. For these contributions, Ekeland was awarded the Prix Jean Rostand by the Association des Ecrivains Scientifiques de France and the Prix d'Alembert by the Société Mathématique de France.

In 1970 Ekeland played a critical role in the creation of The Université Paris-Dauphine. “We had to compete with Paris 6 [the Pierre-and-Marie-Curie University], which was focused on pure mathematics, so we took a different angle. Math is not a science; it is a language and you cannot teach it by itself. Traditionally, you teach math and physics, but we decided there to take a different approach.” Instead, they paired math and economics, creating the first mathematics-economics bachelor and master’s degrees in France and possibly the world. The structure was extremely successful and now includes math, economics, finance and computer science.

After his term as President of the Université Paris-Dauphine, Ekeland turned to economics, which in turn led him to explore many ideas pertaining to the mathematics of planet earth. “Consider our planet as a large computer that has become too slow. Technology is advancing so that its old software [ie. biological phenomena] cannot keep up or correct itself.”

His research has led him to the conclusion that, in addition to the physical inertia of climate change (once carbon gets into the atmosphere it will stay there for hundreds of years) there is an economic inertia. “You can stop the destruction of the environment, but once it is destroyed you can never go back. You can set a limit from above, say that you will not destroy more than 50% of the amazon forest, but if you destroy 50%, you will never be able to get back to 60%.” The irreversibility of this type of situation comes about because everyone expects someone else to fix the problem, which results in no one taking action.

A basic assumption from early economics had been that society behaves like an infinite individual looking into the future and thinking about how to allocate resources to gain the most happiness. “People think it’s like physics – like a gas is full of atoms – atoms are identical and they don’t care about each other, people are not,” explains Ekeland. “Those who will be most affected by climate change are not born yet, collectivities do not act or react like individuals, and we cannot model their decisions in the same way.”

Another aspect of Ekeland’s work in climate change is in time inconsistency, the premise of which is that the incentive to keep a commitment is significantly less than the incentive to make the commitment. “Today I might decide that it would be very good to start running, but when tomorrow comes, tomorrow is today, and then again, it is much better to start tomorrow.” This, he explains, is why people pay huge subscriptions to gyms: just to commit themselves. The problem with climate change is that governments cannot commit to tomorrow, because they may not be there. “They can really only commit this year’s budget; all the rest is empty promises. And so, when you look to climate change 50 to 100 years ahead, you see there may be 50 governments in between. Today’s generations will not commit to the future generations.” The consequence of this is that there is no incentive for governments to adopt the best policy on climate change because if tomorrow’s government does not agree, it will likely be reversed. The best policy is useless if it is not accepted by the next government.

The kind of economic problems Ekeland is currently working on – as part of a project on sustainable development at Dauphine, working with other economists, and with a colleague at UBC – involve determining what a good policy should or could look like.

“I think that Western Canada is the best place to explore the mathematics of climate change because it is a region that still has plenty of natural resources and an interest in maintaining them: the pine beetle, the controversy about the ecological and health impacts of farming salmon… people are aware that there is a problem. People at PIMS have been working on this type of thing and should continue to exploit those ties with mathematical biology, fisheries and statistics. The opportunities and incentive are there!”