Energy and the U.S. Economy: A Biophysical Perspective
Author(s)
Cleveland, Cutler J.; Costanza, Robert; Hall, Charles A. S.; Kaufman, Robert
Abstract
Between the mid-1940s and the early 1970s, the US economy showed generally good performance. Since 1973, however, performance indicators such as labor productivity, inflation and growth rates have been relatively disappointing, and mainstream economic models can not entirely explain this shift and its underlying causes. A theoretical perspective that recognizes the importance of natural resources, especially fuel energy, may help; some economic problems can be understood more clearly by explicitly accounting for the physical constraints imposed on economic production. In this perspective, the focus is on the production process, i.e., the economic process that upgrades the organizational state of matter into lower-entropy goods and services. This process involves a unidirectional, one-time throughput of low-entropy fuel that is eventually lost as waste heat. Production is a work process, and like any work process it will depend on the availability of free energy. The quality of natural resources is also important to this process, because lower quality resources will always require more work to upgrade them into final goods and services.
