Emergy and Ecological Economics Valuing Real Wealth Thanks to Mark Brown, Matt Cohen, Howard Odum, et al. Produced by Tom Abel.

Emergy and Ecological Economics

Valuing Real Wealth

Thanks to Mark Brown, Matt Cohen, Howard Odum, et al.

Produced by Tom Abel

Money as Value

When we buy something, energy and materials flow in counter-current to money

Money as Value

What do we value and how?

Do we value the potential energy in streams using money? Nature provides

products and services for “free”

Money is NOT paid for those services

Only for the work of the farmer who uses that energy to spread water on his crops

Money as Value

The price of something is determined by: Scarcity Human inputs Perception

It does not (nor perhaps should it) reflect the work of the environment

Money as Value

Real wealth in an economy is not money

Real wealth is: Food, shelter,

clothing, fuels, minerals, forests, fisheries, land, buildings, art, music, information, etc.

Money as Value

The ‘buying power’ of money (is your currency ‘strong’ or not) depends on the amount of real wealth there is in an economy

More real wealth, more buying power

Emergy Ecological Economics

Some key words: Emergy Transformity Specific Emergy Empower Empower Density Maximum Empower


Energy… The ability to cause work

Since all energy can be converted 100% to heat, it is convenient to express energy in heat units…btu’s calories, joules


There are many “forms” of energy….

Sunlight… Wind… Geopotential energy of elevated

water… Fuel… Electricity… Information...


Not all forms of energy are equivalent... sunlight ≠ wind ≠ fuels ≠ electricity

While they can all be converted to heat…one cannot say that joules of one form of energy are equal to joules of another

They differ in the work that went into making them, and in their ability to cause work...

Energy Quality

Different energies are different in ‘Quality’

Energy Quality is related to… Concentration Flexibility Ease of transportation Convertibility

Oil is highly concentrated in the ground, it is flexible in its many uses, it is easy to transport by pipeline or ship, and it can be converted into many forms of work

Energy Quality

And these are related to the work that was needed to make the energy object

Objects to the right in a hierarchy required all the work to the left of it

That work concentrated the original ‘sources’ of sunlight, deep heat, and lunar gravity

…highest ‘quality’ objects

It took all of this, to get the…

Original ‘sources’

Energy Quality

‘Information’ is the highest quality energy in human society

The concept of quality required a new concept of energy, it required ‘emergy’

Emergy

Emergy: the energy that it took to make any other form of energy, good, or service

Sometimes thought of as…. ENERGY MEMORY

EMPOWER = the flow of emergy per time EMPOWER DENSITY = empower per area

Emergy

InputEmergy

A Output Emergy = A + B + C

TransformationProcess

InputEmergy

BInput

EmergyC

InputEmergy



InputEmergy

BInput

EmergyC

EMERGYEMERGY - The energy (of one form) required directly and indirectly to make

something

Emergy

Units of EMERGY... Solar emergy joules… or Solar emjoules… or “sej”

Hierarchy

All systems are organized as hierarchies…

Many small components and fewer and fewer larger components

HierarchyFood chain…with each successive energy transformation, there is less energy, but of a higher quality

Food chain…with each successive energy transformation, there is less energy, but of a higher quality

Hierarchy

The 20th century energy food chain of techno-humans…

Measuring ‘Quality’

In a hierarchy there are outputs from each interaction of emergy flows

The more emergy that it takes to make something (per unit of output), the higher the quality of the output

As we move to the right in a hierarchy, the interactions are more intense and the output quality is higher

More intense,Higher quality


The amount of emergy required to produce a mass (1 gram) or energy (1 Joule) is an indication of its quality

If the output is emergy/Joule it is called Transformity

Written Sej/J If the output is

emergy/gram it is called Specific Emergy

Written Sej/g We also use Sej/$

InputEmergy



InputEmergy

BInput

EmergyC

InputEmergy



InputEmergy

BInput

EmergyC

Output = Joules or grams


A transformity or specific emergy value for a product allows us to locate the product in an energy transformation hierarchy

Typical Solar TransformitiesTypical Solar Transformities

B. Review of concepts and definitions ...

Solar emjoules per

Joule

(sej/J)

Sunlight 1

Plant production 6,700

Wood 36,000

Coal 67,000

Oil 90,000

Electricity 300,000

Solar transformities


Emergy in a Country

What can money buy in a country?

That depends on the real wealth production of the environmental processes on the left

And they get their emergy from the Earth inputs (sun, tide, deep heat)

MoneyReal-wealth productionEarth inputs

Emergy in a Country

The real wealth product is sold to pay for the goods and services of processing

No money is paid to the environment that did the work of production

Economic product sold here

Goods and services of processing

Emergy in a Country

The ‘buying power’ of the money in your economy is measured by dividing the total emergy use in the economy by the gross domestic product (GDP) of the economy

Called the emergy/money ratio

MoneyReal-wealth productionEarth inputs

Emergy in a Country

Divide total emergy use by gross domestic product (GDP)

InputEmergy

A

InputEmergy

B

InputEmergy

C

Total Emergy Input= 10.8 E 24 sej/yr

Production Consumption$

$

People

Gross Domestic Product10.4 E12 $

Total Emergy = 10.8 E24 sej/ yr = 1.0 E12 sej/ $ GDP 10.4 E12 $/yr

InputEmergy

A

InputEmergy

B

InputEmergy

C



$

People



Emergy/Money Ratio… USAEmergy/Money Ratio… USA

Total Emergy UseGross Domestic Product

= 1.0 E12 sej/dollar

So...

Every dollar spent in US economy has “embodied” in it, 1 E 12 sej of emergy

A. Emergy Concepts and Principles…

Emergy in a Country

Emergy in a Country

Sometimes economies add money by lending or by printing more money

If more money is circulated for the same emergy then this causes inflation, and the emergy/money ratio becomes smaller

InputEmergy

A

InputEmergy

B

InputEmergy

C



$

People



InputEmergy

A

InputEmergy

B

InputEmergy

C



$

People



Emergy/Money Ratio… USAEmergy/Money Ratio… USA

Emergy in a Country

Market values are poor measures of real wealth

Market prices are effected by scarcity

When environmental resources are abundant then prices are low

But this is when the net contribution of real wealth to the economy is greatest and living standards are highest

Living standards high Optimism of 1950s

Emergy in a Country

Market values are poor measures of real wealth

When resources are scarce the market puts a higher ‘value’ on the product (higher price)

But with less resource there is a lower net contribution of real wealth to the economy

Market values are inverse to real wealth contributions

Emergy in a Country

There are better ways to judge the contribution of a flow or process to an economy

Emergy indices give valuable information

Emergy in a Country

Index HowCalculate

What is it for?

EYR – Emergy Yield Ratio (Net Emergy)

Y/F Can the product drive other processes or even the whole economy (use for fuel comparisons) – does it have a “net emergy”?

ELR – Environmental Loading Ratio

(F+N)/R How much pull or pressure is there on matching renewable resources? (from the point of view of environmentalists)

Empower Density U/Area Another measure of development intensity (like ELR). This is total emergy flow, divided by area—therefore, the “density” of emergy flow

% Renew R/(R+N+F) How sustainable is a process? High percent means more sustainable in the long run, when non-renewables are depleted

EIR – Emergy Investment Ratio

F/(R+N) How much had to be “invested” from the bigger scale to attract (capture) the environmental resources? (from the point of view of economic developers)

Emergy per Person U/Person This is a measure of personal wellbeing. Higher emergy per person means the person is receiving a greater flow of real wealth, or is able to do real work.

Emergy Indices

Emergy in a Country

The net emergy yield ratio (EYR) compares the output against the input

You must have a net output greater than 1

The EYR indicates the net contribution of a process to the economy beyond its own operation

Emergy in a Country

The emergy yield ratio, also called net emergy yield, is very valuable for evaluating and comparing fuel sources

Fuel sources must support the rest of the economy and so their net yields must be high (4-10)

Fuels are a stimulus to the entire economy

Emergy in a Country

We looked before at the sales of an environmental product

Now lets follow the product as it is processed into some high-tech good, or into information

As raw materials are processed and transformed and transformed again, new inputs and new money is added

Sales of environmental products

Emergy in a Country

Eventually those raw inputs might be used in high-tech or information centers, located in the centers of cities

Those new goods have high transformities

The convergence of goods occurs within a convergence of space

Living in city centers therefore requires more money

Emergy in International Trade

The general energy hierarchy found in all of nature and in the economies of humanity is observed in the relationships between nations

Some are rural, and some are mainly urban Highly developed urban countries are centers in the

global hierarchy Rural areas converge raw resources to towns and

receive goods and services in return Small towns contribute to and receive from cities, and

these to and from larger cities, and so onGoods and services

Raw resources


Generally, a country looses wealth if it sells environmental raw products

This is because the emergy of nature’s work to make those environmental products is high, whereas the money received is only for some services to process them

Money paid only for services

Nature’s work


More emergy per dollar paid

Less emergy

Urban

Rural

For finished, high-tech, manufactured products the prices are high, so the emergy of the money paid is closer to the emergy of the products sold

In general, developed nations tend to receive more emergy than they give in exchange


In 1985 the buying power of the US (2x1012 sej/$) dollar was four times that in rural resource countries (8x1012 sej/$)

USA receives 4 times more emergy

Japan receives 4 times more emergy

Japan receives 16 times more emergy


Benefit to developed country:1. (Within country) the

emergy of environmental products is higher than that in the money paid for the processing services

2. (Between countries) the emergy/money ratio in rural countries is higher than the ratio in the urban country

1) Emergy of environmental products is higher than emergy in money paid

2) Emergy / money ratio is higher in rural country, lower in urban country

(Rural) (Urban)

More emergy


When emergy trade is unbalanced, the difference can be made up in education, military, or technology transfers, evaluated for their emergy contributions

This balances exchange while still allowing countries to be at different levels in the urban-rural hierarchy

Maximum Empower

During the self-organization process, systems develop structure that maximizes useful empower transformations

Not simply maximizing intake, but maximizing best use of emergy

Processes in a system are useful if they reinforce intake, and at the optimum efficiency

Systems maximize empower by: 1) developing storages of high-quality energy, 2) feeding back work from storages to increase inflows, 3) recycling materials as needed, 4) organizing control mechanisms that keep the system adapted and stable, 5) setting up exchanges for needed materials, 6) Contributing work to the next larger system

Maximum EmpowerMaximum Empower

Emergy and Ecological Economics Valuing Real Wealth Thanks to Mark Brown, Matt Cohen, Howard Odum, et al. Produced by Tom Abel.

Documents

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