Emergy Theory

A theory that links the value of an object to energy, and which argues that money can only be a measure of value if it is linked to energy.

Emergy = embodied energy.

Key argument of emergy theory: Value is a function of energy and time.

Citation

"Relying upon money as the basis for economics is an error of catastrophic proportions. Money, however, is extremely useful as a secondary unit of measure provided it can be linked to energy." (http://dematerialism.net/CwC.html )

Description

Odum’s Theory of Emergy

Explained by Thomas L. Wayburn at http://dematerialism.net/CwC.html

"The emergy theory of Howard T. Odum (http://dieoff.org/page170.htm) is perhaps the swiftest route to a reasonable alternative to flat-earth economics. Money is the central object in flat-earth economics, however, money is a poor measure of value:

1. Money does not satisfy readily tractable balance equations. The methods by which it is created are not widely published generally and may occur secretly from time to time.

2. Different quantities of money are associated with identical economic transactions at the same time due to inequities in the market and at different times due to monetary inflation.

3. Prof. Howard T. Odum has given a number of additional reasons why money is a poor measure of wealth that are included here in Odum’s own words for completeness: Real wealth is food, fuel, water, wood for houses, fiber for clothes, raw minerals, electricity, information.

• A country is wealthy that has more of this real stuff used per person.

• Money is only paid to people and is not proportional to real wealth.

• Prices and costs are inverse to real wealth.

• When resources are abundant, standard of living is high, but prices low.

• When resources are scarce, prices are high, more money goes to bring resources, a few people get rich, but the net contribution to prosperity is small.

• Real wealth is mostly the work of nature and has to be evaluated with a scientific ... measure, emergy.

Odum’s theory, as modified by Wayburn in Emergy and Economics, Chapter 2 of On the Preservation of Species, is based upon energy corrected for entropy, which satisfies the availability balance equation, obtained by combining the First and Second Laws of Thermodynamics. [The entropy balance is closed with a lost work term. It (the entropy balance) is multiplied by the temperature of the coldest heat sink to which we can dump exhaust energy (in keeping with the Second Law) and subtracted from the energy balance.] The value of every economic object is measured by its emergy, with an m, whose units are the same as energy – except that, in this essay, in keeping with the practice of Odum, the unit is prefaced with the letters em, e.g., emquad instead of quad or emjoule instead of joule.

The embodied energy or emergy of a primary fuel is the Gibbs availability of the fuel in quads multiplied by the transformity defined below. The emergy of manufactured objects is the sum total of all of the emergy that went into their production whether it be primary emergy, the emergy of other manufactured items, or some pro-rata share of the living expenses of the people involved in the manufacturing process directly and indirectly. That is, some portion of the emergy consumed by the man (or woman) who irons the shirt of the man who serves the lunch of the man who does the income tax of the man who drives the bus that takes the man who services the copy machine of the man who does the payroll for the personnel department of the company where the man works who assembles the widget must be charged to the emergy of the widget. (One rarely sees the costs of hiring and firing personnel, or, for that matter, the energetic costs of promoting solar energy, say, discussed in so-called Energy Returned on/over Energy Invested (ERoEI) calculations.)"

More Information

Emergy methodology is explained in more depth at http://dematerialism.net/POS.html