From Thermodynamics to Economics and Ecology - Thanatia: The Destiny of the Earth's Mineral Resources - page 76

The value of the exergy cost of a given material is always the sum of its exergy
plus all the irreversibilities that occurred in its production process. The greater
the exergy cost, the lower the production chain e ciency. A product's exergy cost
could be typically tens or even thousands of times greater than its exergy.
Exergy values should be used because of the need for homogenous and universal
standards. Neither mass nor energy can provide them. This is because the mass and
energy of a mineral in a mine or quarry remains the same, no matter if that mineral
is dispersed or concentrated. The same occurs with process emissions. In addition,
exergy can help in assigning costs. The main problem in doing so has been the
identification of a function that adequately characterises every one of the internal
flows in a system and distributes cost proportionally. This di culty derives from the
fact that the function needs to be universal, sensitive and additive. That is, it needs
to provide an objective value for every possible material manifestation; it must be
able to vary when these manifestations do so and enable each internal flow property
to be represented cumulatively. There is a widely recognised international consensus
that the best function, at least for systems that exchange energy, is exergy, which
can contain in its own analytical structure a given flow's history.
The concept of exergy cost is still within the realm of Thermodynamics but
it clearly shares many of the cost accounting methodologies from the conventional
accounting principles of Economics. Thus, the isomorphism between exergy cost and
economic cost enables the straightforward conversion of thermodynamic costs into
thermoeconomic costs. This can be done by simply transforming resource exergy
costs into resource prices and adding to each subsystem their annualised (levelised)
installation rate and maintenance costs. However there is a definitive difference
between the two: exergy costs unlike their economic counterparts, relate physical
measurements like mass flow rates, pressures, temperatures and compositions, to
actual irreversibilities occurring in the system. Therefore, the basis of a general
theory for improving systems and saving resources lies in systematically locating
and causalising irreversibilities in and out of a system and counterbalancing them
with the money needed for compensation. In this way, exergy cost accounting
provides a wide scope and clear vision of the use and degradation of energy and
other natural resources.
Cost is an emergent property as it is a property that cannot be found in the
product itself. It cannot be measured as a physical magnitude of a flow stream or as
a mass, composition or temperature. Instead, it depends on the system's structure
and appears as an outcome of the system's analysis. Therefore, it needs precise rules
for its calculation from physical data. The system also needs to be disaggregated
when several products are simultaneously produced and allocation problems appear.
As stated above, the most important application of Thermoeconomics lies in the
search for the causes of cost and ine ciency and how one might decrease them. This
means that any analysis must be as detailed as possible, disagreggating the system
into all its constituents. In this regard, it is not only the physical components