Physically Modified Economic Models of Production

The model in Fig. 3 has limitations due to the particular place energy has in the processes of production and consumption. If we separate out raw energy resources from other material resources, we obtain a different picture, despite the fact that some raw energy resources, such as coal, oil, and gas, may also be raw resources in their own right (e. g., when used for petrochemicals production). This is not a problem as long as we remember the distinction between the two functions.

Figure 5 indicates the special function of the energy sector as an energy transformation system. A flow G of raw energy resources (coal, oil or gas in the ground, water in mountain lakes, geothermal heat, solar input, and so on—often referred to as primary energy) is transformed into a flow E of consumer energy (often referred to as secondary energy)—such as delivered, refined fuels, electricity, process heat, etc.—trans – formed in coal mines, oil/gas wells, refineries, thermal power stations, hydro dams, boilers, and so on.

These processes always involve loss of some of the input of raw energy resources, as a direct reflection of the processes involved, such as oil drilling, pumping and refining, thermal or other electricity generation, and so on. Some of the consumer energy output of these plants is often needed to run the plants (e. g., electricity to run auxiliary machinery in a thermal power station). Note that flows of waste energy and material pollution are not included in this simplified model but are also important.

Подпись: Means

Physically Modified Economic Models of Production Подпись: End A
Physically Modified Economic Models of Production

FIGURE 5 Energy transformation system.

The energy transformation system comprises large capital works constructed from steel, concrete, and other materials, in turn created using energy and material resources in the past. Figure 5 includes a feedback arrow showing the energy flow F embodied in the goods and services (as manufactured capital, etc.) needed from the production sector to build and maintain the energy sector.

Even consumer, or secondary, energy is not the real end product. What economic production or consumption processes actually need from energy is the services that energy provides, such as heat, light, motive power, chemical conversion, and operation of electronic equipment. This is illustrated in Nqrgard’s model in Fig. 6, which shows the chain of conversion of raw, primary energy through secondary energy to energy services and to the ultimate end, the energy services and other inputs to lifestyle and satisfaction of needs. In this model, the fact that energy is a means to an end is very clear. Also very clear is the importance of efficiency of conversion at each stage and the fact that each increment of satisfaction of needs requires a substantial infrastructure of capital equipment and a steady consumption of raw resources. Sooner or later, there is an associated and inevitable conversion of all the resources into waste.

Gilliland’s model (Fig. 7) integrates the perspec­tive of Fig. 5 into the economic model of Fig. 2 and shows how a significantly richer picture of economic activity is obtained if resources are separated into their material and energy components. This thermo­physical model shows the economy as a pathway by which energy resources are used to run the processes

that convert raw materials into the goods and services needed for everyday functioning of the economic system.

In Fig. 7, it is clear that money flows in the opposite direction as energy. In addition, although money flows are circular, energy flows are essentially linear (in one end and out the other), as is typical of all metabolic processes.

In the thermophysical context, energy use—or, more correctly, the degradation of available input energy into unavailable output energy—can be seen as representing physical ‘‘cost.’’ However, this is a different concept from money flow in the economic perspective, which normally represents market price. Therefore, it is not suggested that energy consump­tion is an adequate measure of social value in an economic context, although undoubtedly it can have significant long-term implications for prices.

Again, however, to make our approach opera­tional, it is desirable to view the place of important component subsystems in our conceptual model of the system of society within the supersystem environ­ment. Figure 8 shows the thermophysical economy of Fig. 7 within its total ecological environment of planet Earth. The energy concept is central to this descrip­tion of the thermobiophysical ‘‘engine’’ that enables

Physically Modified Economic Models of Production

the global ecosystem to function, with high-quality incident solar energy driving all the natural processes on which the activities of living things depend, before eventually being rejected as waste heat into the vast sink of outer space. Within the earth’s system, that energy is stored for a short time in processes such as

circulation of the atmosphere, for longer times in plants that absorb energy for photosynthesis, and for even longer times in geological deposits.

The energy in fossil fuels was originally derived from solar energy many millions of years ago, captured mainly through photosynthesis in plants
and then via the plants (and the animals that fed on the plants) whose remains were transformed over very long periods of time by geological processes into the hydrocarbon fuels coal, oil, and gas. The fact that humans currently have access to these resources (for a period that will be very short in the context of geological or even human time) does not affect the validity of Fig. 8 as a general model.

Updated: September 29, 2015 — 12:13 am