Geology Reference
In-Depth Information
2.6.5 Thermoeconomics
Thermoeconomics is a general theory solidly rooted in the Second Law (see Chap. 3).
In its widest possible sense it is the science which connects Thermodynamics with
Economics (Valero, 1998). It is located in the spectral transition between cost as
a physical and measurable destruction of resources and cost as an analytical ac-
counting technique of the direct and indirect monetary flows needed to produce a
specific product or service. Thermoeconomics has thus an integrating and explana-
tory function. It integrates all the methodologies of energy analysis under the scope
of Thermodynamics and general systems theory whilst also serving to clarify the
rules for “sustainability” accountancy. Arguably, Thermoeconomics encompasses
(with objections) some of the above mentioned indicators such as mass, energy,
embodied energy, emergy, entropy, exergy and cumulative exergy consumption.
It provides answers based on the logical application of the Second Law in the
search for cause-effect relations and chains of causality. This connects well with
the mathematical apparatus of the Input-Ouput theory of Leontief (1951, 1970),
commonly used in conventional economic analysis. It explains the physical bases of
cost, unifying it with the physical processes within which the sacrifice of physical re-
sources is located, causalised and quantified in terms of thermodynamic irreversibil-
ity. Given that irreversibility can only be measured with the Second Law and that
the valuation property most widely used in calculations is exergy, Thermoeconomics
is also known as exergoeconomics (Tsatsaronis and Winhold, 1985).
The details of Thermoeconomics are explained in Chap. 3, as is the methodology
used in this topic for accounting the degradation of the mineral endowment on
Earth.
2.7 Summary of the chapter
In this chapter, a review of the contribution of economists, accountants and natural
scientists regarding depletion of natural capital has been undertaken.
The concept of natural capital is derived from its economic counterpart, as it is
a means to value the services that Nature offers. Mineral capital, the focus of this
topic, forms part of the non-renewable sub-category and includes all minerals, fossil
fuels and industrial rocks of economic value. Natural capital as a concept and an
assessment of its degradation is understood differently by each school of thought.
Viewpoints range from a complete denial of depletion and an unyielding confidence
in future substituting options, to the belief that exhaustion of natural resources
(and subsequently its prevention) should be at the heart of economic theory.
Neoclassical economists believe that the Earth represents nothing more than
resources to be used. Eventually the free market will ultimately lead to a natural
order of things and avoid resource depletion.
The school of environmental economists have developed methods to evaluate
the economic effect of using natural resources to support economic activities. They
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