From Bioeconomics to Degrowth (Routledge Studies in Ecological Economics) by Nicolas Georgescu-Roegen

Author:Nicolas Georgescu-Roegen [Georgescu-Roegen, Nicolas]
Language: eng
Format: epub
Publisher: Taylor and Francis
Published: 2011-03-27T22:00:00+00:00

From this and (1) we obtain

which shows how much energy in situ, bi, is needed for a unit of every good consumed by the households.35

The comparison of (12) and (15) yields

or, equivalently,

These results show, first, why the main issue in gross energy analysis turned around the proper unit for energy. If e1 consists of fossil fuels, then Chapman (1974) is vindicated for insisting that one kWh of electricity should be counted as about four kWhs of calorific power, which simply means that b1 = 4.

But the same relations prompt one to wonder why all the fight about which approach is the correct one since the two sets of energy equivalents are related by the simple relations (18). The truth is that, whereas a can be deduced from b, the converse is not true. This does not mean, however, that gross energy analysis is the better approach. According to the rule mentioned earlier, in the case of solar energy e1 = 0, hence b = 036 and Net Energy = ∞. Briefly, within its own scope gross energy cannot discriminate between two technologies based on solar energy alone (also Sec. VIII). On the other hand, net energy analysis completely ignores the efficiency of the technologies by which resources in situ are transformed into controlled energy. As far as net energy analysis is concerned, it does not matter whether two tons or one million of tons of oil in situ are depleted for obtaining one ton of oil net.

Still reasoning on the basis of Table 5.1, let us turn now to economic valuation, briefly, to what the normal prices would be in such an economic world. The point that can hardly be overemphasized in this connection is that in any economic system both the quantities represented by the flow elements and the services provided by the agents have value. Let p = (p1, p2, p3, p4,) be the column vector of the prices of the flow elements, and let PK, PH, PL be the prices of services during their specific periods. The economic equations are

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