French Kiss

Here is a sketch I did way back in 1999 - when I had more time on my hands. I came across an old calendar with photographs by Robert Doisneau at a old book dealer in New York. I bought the calendar, and the first thing I did when I reached home was sketch this.

The original photo is here. More photos by Doisneau are here.

Crossroads for Planet Earth

Though I haven't read the entire Sept issue of the Scientific American, here is a graphic and some quotes I would like to share with you that is relevant to my earlier post and Sunil's post. In the introductory article of the special issue, The Climax of Humanity, an eight point plan is presented for the 21st century. George Musser goes on to say:

A recurring theme of this plan is that business is not necessarily the enemy of nature, or vice versa. Traditionally the economy and the environment have not been described in lik eterms. The most watched economic statistics, such as Gross Domestic Product (GDP), do not measure resource depletion; they are essentially measures of cash flow rather than balance sheets of assets and liabilities. If you clear-cut a forest, GDP jumps even though you have wipes out an asset that could have bought in a steady stream of income.

More broadly, the prices we pay for goods and services seldom include the associated environmental costs. Someone else picks up the tab - and that someone is usually us in another guise. By one estimate, the average American taxpayer forks out $2,000 a year to subsidize farming, driving, mining and other activities with a heavy environmental footprint. The distorted markets gives consumers and producers litte incentive to clean up. Environmentalists inadvertently reinforce this tendency when they focus on the priceless attractions of nature, which are deeply meaningful but difficult to weigh against more pressing concerns. The Endangered Species Act has provided iconic examples of advocates talking past one another. Greens blamed th3 plight of spotted owls on loggers; the loggers blamed unemployment on self-indulgent orinthology. In fact, both were victims of unsustainable forestry.

In recent years, economists and evironmental scientists have come together to hang a price tag on nature's benefits. Far from demeaning nature, this exercise reveals how much we depend on it. The Millenium Ecosystem Assessment, published earlier this year, identified services - from pollination to water filteration - that humans would have to provide for themselves, at great cost, if nature did not. Of the 24 broad categories of services, the team found that 15 are being used faster than they regenerate.

When the environment is accounted for, what is good for nature is often what is good for the economy and even for individual business sectors. Fishers, for example, maximize their profits when they harvest fisheries at a sustainable level; beyond that point, both yeilds and profits decline as more people chase ever fewer fish. To be sure, life is always not so convenient. Society must sometimes make real trade-offs. But it is only beginning to explore teh win-win options.

I have yet to read the details of the action plan (which forms the entire content of the special issue) - but it promises to be a good read.

Is there a Conflict between Economic Viability and Sustainable Resource Utilization?

I recently attended a presentation titled "Is there a Conflict between Economic Viability and Sustainable Resource Utilization?". It was a trial lecture for one of the PhD students in our department and left a lot of questions (including the title) unanswered.

Michael Higgins' wonderful blog Chocolate and Gold Coins has quite a few posts on an economist's view of resource utilization (two of them are here and here). Half Sigma is another blog with an economist's view of resource utilization. His views on recycling (here and here) and energy are opposed to mine.

In this post, I will try to answer the question "Is there a Conflict between Economic Viability and Sustainable Resource Utilization?", while trying to show that applying economic theory coupled with science, the economists might have to change their views. For more on how to reason economically go here (Link via Michael Higgins' post Teaching Economics to Everyone).

Economics analyzes the costs and the benefits of improving patterns of resource use. Economic theory has failed as it does not have a connection to the physical world - where the resources originate. It has followed a price system where the environment (atmosphere, hydrosphere and lithosphere) are free; thus markets prices will not reflect the true costs associated with producing/consuming a product. I agree with economists in that markets work, but one must make sure that the basis is correct.

Thermodynamics is a formal system or procedure to evaluate and understand the interaction of people, machines etc with the environment. In other words, it is a set of rules governing the behaviour of the natural world. Thus, thermodynamics would be the ideal basis for setting the value of materials.

Exergy, a thermodynamic quantity derived from the Second Law, is defined as energy quality or the ability to do work. It is important to remember that there is continuous exergy loss in society as a whole. Exergy of any material can be calculated by defining a constant reference environment (it composition, temperature and pressure). Exergy is thus a measure of the physical value of the material. This can be used as a basis for the economic value of a material.

VAT (Value Added Tax) can be modified to include an exergy cost (sum of exergy consumption from the environment and waste exergy released to the environment). Thus VAT can move from the purview of bureaucrats to that of scientists, where the tax is a measure of the physical value. This would automatically increase the costs of products that have harmful waste products and renewables would get a boost.

When the two pillars of economic theory, incentives matter and markets work, are allowed to function with the material value based on exergy - recycling and renewable energy sources would be viable. And, of course, gasoline prices would probably reach double digits!!!

Thus, there is no conflict in Economic Viability and Sustainable Resource Utilization, as long as economic value is linked to the physical value of a material.

Update:

1. It is worthwhile to note that with this tax Nuclear power would be one of the most expensive sources of energy.

2. The tax proposed here is not my idea . It was mentioned by Prof Jan Szargut during a panel discussion on the furture of exergy analysis at the ECOS 05 conference. Goran Wall also proposed this idea a couple of years ago.

3. Sunil, in his post on the economics of conservation, adds a different dimension to the debate. He presents a case for the conservation of natural habitats and the economic costs incurred when they are ignored.

4. Browsing though my mail from when I was on vacation, I noticed that the Scientific American September edition is a Special Issue - Crossroads for Planet Earth. I haven't read it yet.

Thermodynamics - on this and that

Many people find thermodynamics confusing... and why not. When the first law was propounded last, the second law first and the zeroeth law is not a law at all, you can blame people for finding thermo confusing.

On a more serious note, thermodynamically there has never been an energy crisis. As energy is always conserved, there can never be an energy cris. What we call an energy crisis is actaully an exergy crisis - in other words the useful work that can be produced is reducing, unable to meet demands. Exergy is not a conserved thermodynamic quantity.