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Thermodynamics and material flow analysis: A wider economics

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In the Court devoted to his work in the Detroit Institute of Arts lies a magnificent fresco by Mexican painter Diego Rivera. Commissioned by Henry Ford to glorify entrepreneurs and painted between 1932 and 1933, it exalts instead, in its lower panel, workers. But its upper panel reveals a striking truth: Labor and capital are only possible because of a third and sustaining production factor: The extraction of natural resources (represented in the fresco by mountain gods who allow a flow of energy to descend toward the car assembly line pictured in the lower panel). Human production depends on the biosphere, which provides energy and materials without which all economic models would remain purely theoretical.

The amount of energy human societies receive from the sun is astounding: 8,000 times what they need to power the global economy. Energy that drives ecosystems comes almost entirely from the sun, a fraction of its rays (about 7%) being captured by green plants for growth via the process of photosynthesis and sustaining human life. But ecosystems’ energy is governed by a law of entropia: It can neither be created or destroyed (first law of thermodynamics) and its usage produces waste heat that humans cannot use again (second law of thermodynamics).

Economies are exactly like organisms: They need not only energy but nutrients to function.10 Material resources abundant on Earth and useful for humans are comprised of the biomass (wood and crops for food, energy, and plant-based materials), fossil fuels (coal, gas, and oil), metals (such as iron, aluminum, and copper) and non-metallic minerals (including sand, gravel, and limestone), all of which feed the economy. In fact, at a time when the digital revolution is supposed to make economies immaterial, humans today extract close to 90 billion tonnes of material resources; more than three times the amount they needed fifty years ago.11

The New Environmental Economics

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