Biophysical Foundation of Socio-Economic Systems

* Article: Why ecological economics needs to return to its roots: The biophysical foundation of socio-economic systems. By Rigo E. Melgar-Melgar and Charles A.S. Hall. Ecological Economics, Volume 169, March 2020.

URL = https://www.sciencedirect.com/science/article/abs/pii/S0921800919310304

Contextual Quote

"Neoclassical theory pays no attention to the source of goods and services in nature nor to the energy and materials required to bring them to markets, yet has a major influence on education, management, and policy. Subsequently, however, Ecological Economics became far more a transdisciplinary venue for academics and practitioners from different disciplines to come together to advance the science and management of sustainability (Costanza, 1991). A commitment to pluralism (Norgaard, 1989) opened the doors for the very theories and methods that were once the focus of its critique, and EE has since become better known for efforts to “green” the exchange economy through the monetary valuation of nature."

- Rigo E. Melgar-Melgar and Charles A.S. Hall [1]

Abstract

"Ecological economics was formally established in 1989 with the ambitious vision of developing a new economic paradigm embedding the social and economic systems in the biophysical world. Ecological economics had its roots in the biophysical understanding of economics that pioneers of the field Georgescu-Roegen (1971), Odum (1971), Daly (1977), Jansson (1984), Martinez-Alier (1987) and others developed while studying the thermodynamic bedrocks shared by natural and social systems. Subsequently, however, ecological economics has explicitly but controversially adopted a ‘big umbrella’ approach to methodological pluralism, focusing more on topics such as valuing nature and its functions rather than attempting to understand and quantify the biophysical roots of economic activities. Biophysical economics was established in response to these concerns, focusing more on developing analyses and models of the transformations of nature to generate wealth and approached mostly from an energy and material flows perspective. The present paper argues that to achieve its original vision ecological economics must return to its biophysical roots. Collaboration between the two fields will help the next generation of thinkers to address the socio-ecological challenges of the 21st century requiring an energy transformation called for by aspirations such as the Green New Deal and the UN Sustainable Development Goals."

Excerpts

What Is the Biophysical Economy?

Rigo E. Melgar-Melgar and Charles A.S. Hall:

"From a biophysical perspective, the history of human civilization has been marked by the pursuit of energy, energy exploiting technologies, and the economic surpluses that they allow accompanied by the energy transformations that have enabled the development of our complex socio-economic systems. Earlier economic theories, before the “marginal revolution” of the 1880s, often had a biophysical basis, as do a growing number of more modern theories. The latter have argued that conventional

Real economies must be studied as both biophysical and social entities. Biophysical principles that take into consideration complexity and apply a systems thinking approach are necessary for future researchers in ecological economics and other allied fields to understand why and how we can bring our socio-economic system in line with the many constraints of the biophysical world. Odum (1971) stated that “when systems are considered in energy terms, some of the bewildering complexity of our

In the XXI century, the analysis and understanding of the role of energy and material inputs and outputs in our socio-economic systems will be essential to address the climate and ecological crises that threaten the future of life on planet Earth. Therefore, the research agenda of EE must build on solid biophysical foundations to provide a meaningful alternative to help transform our socio-economic systems towards biophysical sustainability. For example, new policies emerging from the Green New

Ecological economics should not be restricted and cannot be reduced to biophysical analysis, but its theories and methods must be consistent with biophysical principles."

(https://www.sciencedirect.com/science/article/abs/pii/S0921800919310304)