Biophysical Conditions for a Sustainable Economy and Economic Theory

1. Biophysical Conditions for a Sustainable Economy and Economic Theory

2. 1. Economy extracts natural resources from the environment to be used as inputs in production processes • 1a. output of these processes may be final goods for C or produced inputs • 1b. C and K not entirety of output- also residual by products: waste

3. 2. Economy dumps waste back into the environment • 2a. waste (W) at each stage: extraction and processing of R (natural resources); P (production); and C (consumption of commodities and depreciation of capital goods and consumer durables)

4. 3. R = W due to first law of thermodynamics (matter/energy can be neither created nor destroyed, but only changed in form) • 3a. It is an ultimate equality, as there is a time element in capital depreciation and also consumer durables

5. 4. Waste may be divided into two types: that which is recyclable or reusable and that which is not • 4a. not all waste is recyclable or reusable due to 2nd law of thermodynamics (any use of matter/energy decreases the total amount of available matter/energy—entropy) • 4b. that which is not recycled is dumped into environment

6. 5. assimilative capacity- ability to transform waste into harmless forms • 5a. assimilative capacity not infinite • 5b. waste at some levels not transformed, may damage assimilative capacity itself

7. 6. Not simply levels of homogeneous waste in relation to assimilative capacity • 6a. what specific types of waste- some not assimilable in any quantity

8. 7. Not sufficient to look at simply each specific type and quantity in isolation • 7a. synergistic effects: combinations of different forms of waste have effects more damaging than the sum of the component waste products independently of one another • 7a1. acid rain- sulfur dioxide and nitric oxide

9. 8. Not simply qualities and quantities of wastes globally • 8a. spatial considerations concerning local concentrations

10. 9. Waste is not detoxified or degraded instantaneously • 9a. cumulation effects must be dealt with

11. 10. Furthermore, nothing guarantees that all waste that is capable of being recycled or reused is actually recycled or reused • 10a. All waste not actually recycled or reused impacts on the assimilative capacity

12. 11. Divide W into rp and W - rp • 11a. further divide rpinto ra and rp -ra • 11b. total waste confronting the assimilative capacity • W - rp + rp- ra = W - ra

13. 12. ra has positive feedback on R • 12a. but recycling is also an entropic process • 12b. so we must account for the waste produced in the recycling process itself, Wr

14. 13. Natural resources can be divided into two types • 13a. those renewable only within a geological time-frame: exhaustible • 13b. those renewable within a human time-frame

15. 14. Exhaustibles: total stock fixed, so any utilization decreases the total amount available for future use • 14a. if u>y (=0), total available resource is decreasing and may decrease to zero

16. 15. The case of stock renewables, as a first approximation: y>0 • 15a. if u<y, then the total amount is maintained or increasing • 15b. if u>y, then the total amount of these resources too is decreasing and may decrease to zero

17. 16. It's more complicated, we have to distinguish between stock renewables and flow renewables (some called perpetuals) • 16a. with stock renewables, the yield is related to the stock level

18. 17. Above some critical stock level, RRmax, the carrying capacity of the habitat will be reached and the yield will turn negative

19. 18. Also, if the level of stock renewables falls below some minimum point, RRmin, renewability of the resource may be damaged and y<0

20. 19. At stock levels between Rmin and Rmax, the yield will be positive but not constant • 19a. Since the yield is not constant there is some stock level associated with the maximum sustainable yield

21. 20. At this stock level the rate of utilization may be maximized without reducing the amount of the resource available for future use • 20a. This result, however, requires a ceteris paribus assumption regarding all other relevant factors in the eco-system. • 20b. Thus it disregards the very important problem of interacting resources, and the fragility of the eco-system

22. 21. Also relations between assim. capacity and renewable resources • 21a. if u>y renewables declining, but also impacts assim. capacity • 21b. rainforests • 21c. not to mention extinction of plant and animal species

23. 22. Causation may go in other direction of course: assimilative capacity to renewables

24. 23. human population and human health • 23a. carrying capacity locally and globally • 23b. limited capacity of human beings absorb toxins

25. 24. Earth's limited capacity to absorb heat defines level and composition of economic activity possible without adversely affecting climate

26. 1. The level and composition of waste in time and space must be such that all wastes may be transformed into harmless (or even beneficial) products and the ability of the assimilative capacity of the environment is preserved to perform its function in the future, locally and globally. A corollary to this is that all waste that is potentially recyclable or reusable, rp, must actually be recycled or reused (rp = ra), unless a particular recycling process uses more resources than it saves or there is some qualitative issue regarding the trade-off. Thus, for the maintenance of the sink function of the ecosphere, Wt < At, where Wt is a vector of quantities of qualitatively and geographically (locally and globally) distinguished wastes per time period, and At is a vector of qualitatively and geographically (locally and globally) distinguished assimilative capacities per time period.

27. 2. For renewable resources the rate of utilization must be less than or equal to the rate of renewal, and for stock renewables the stock level must be maintained between the minimum and maximum level. Depending on the particular circumstances, the stock level and rate of utilization should correspond to the maximum sustainable yield. Thus, the maintenance of the source function of the ecosphere for stock renewable resources is utSR < ytSR, where ut is the rate of utilization or harvest per time period, yt is the yield or rate of renewal per time period, and the subscript SR denotes stock renewable resources. However, this second condition may be modified in the light of the problem of nonrenewable resources, to which we now turn.

28. 3. Even if these first two conditions are satisfied we still have to deal with the fact that the yield of exhaustibles is zero, so that any use of these resources will decrease the amount that we have at our disposal for future use, and may decrease to zero. Thus, the third condition is that there must be a transformation in the technological structure of production away from exhaustible resource-based, and toward renewable resource-based, technologies. Some modify the condition for stock renewables in the light of the inevitability of exhaustion of nonrenewables, so that utSR + utNR < ytSR, where the subscipt NR indicates nonrenewable or exhaustible natural resources. Here the total utilization of both renewable and nonrenewable resources per time period must be less than or equal to the yield of renewables per time period, so that as the stock of nonrenewables declines, the utilization of renewables may increase accordingly. But we cannot overestimate the likelihood of a transformation to renewable based technologies in the near future. Therefore, much attention must be paid to strategies to affect the productivity of all resources, both nonrenewable and renewable.

29. 4. Technological innovation resulting in increased productivity and efficiency of all resources is necessary. Research and development concentrating on renewables will complement the third condition concerning the transformation in the technological structure of production, but increased efficiency and productivity of exhaustibles is imperative as well. This includes increased regeneration rates; improved resource extraction techniques; improved pollution abatement; increased assimilative capacities; and cultivation of renewable resource stocks. And again: maximum recycling is a must (also reuse, reduce, and repair -- sounds like a mantra, but is really basic common sense, and justified by scientific evidence).

30. 5. The level and composition of activity must be such that we avoid deleterious thermal effects, and biodiversity must be preserved. Human and nonhuman populations must be consistent with local and global carrying capacities, and human health preserved. Ecosystem rehabilitation and conservation will serve as an important basis for a sustainable and viable system.

31. These are a sketch of conditions that must be met if we are to preserve the ecological basis of economic activity, but they are in no way sufficient to guarantee necessary material provisioning. It is easy to conceive of the possibility of satisfying conditions 1 and 2 without satisfying what we might call the specifically economic conditions for a sustainable economy.

32. Furthermore, the biophysical conditions cannot simply be added to the economic conditions for system viability. The biophysical conditions themselves alter and affect the economic conditions, through limiting and reshaping the whole range of possibilities in regard to the organization of production and distribution.

33. The reciprocal impact of environmental and economic conditions further influence the degree of flexibility in how system viability is to be achieved. For example, in meeting the necessary conditions for material provisioning, the technology, structure of production and distribution, scale and concentration of productive and consumptive units, and so on, must accord with our biophysical conditions. Likewise, the means by which the ecological basis of the economy is preserved must be compatible with material provisioning.

34. There is a sense in which the economic conditions set minimums on the system while ecological conditions set maximums: we must produce enough to survive without destroying the earth and ourselves. This is only adequate, however, as a first principle. Besides the minimum quantities of goods to satisfy requirements of provisioning, there is also the composition of those goods and the means by which they are produced, which are constrained by the ecological conditions. Thus, consideration of ecological and economic conditions for system viability narrow the boundaries of possible alternatives in multiple ways, not only defining the upper and lower limits in a quantitative sense, but also through limiting the elasticity of composition of output and the extent of flexibility in the choice of methods of production in the system.

35. In addition, there are not only economic and ecological conditions for sustainability, but political and social conditions required for system viability, or social reproduction.