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SCHOOLS OF ECONOMIC THOUGHT ON ENVIRONMENTAL SUSTAINABILITY 47
all life. It is also an important question whether — and how — the interests of unborn
future generations should be taken into consideration in our present decisions.‘
Alternative economists have been following the science of physics with great
attention since the 1960s. Its most pertinent field for the economy is
thermodynamics, which is aptly suited for the characterization of the basic physical
interactions between the economic process and the natural environment.
One of the first to realize the economic importance of the laws of thermodynamics
was Nicholas Georgescu-Roegen, who illustrated the two main laws with the
following vivid example. Imagine an hour-glass. As it is a closed system, no single
grain of sand can enter or leave the glass container. The number of grains of sand
is constant; no grain can be created or destroyed. This is like the first law of
thermodynamics: material, or energy, cannot be created or destroyed. Although
the number of sand grains is constant, their distribution constantly changes: the
lower chamber is filled as the upper is emptied. This can be compared to the second
law of thermodynamics: entropy (the grains in the lower compartment) incessantly
grows. The grains in the upper compartment (low entropy) are working like water
is in a waterfall. The grains in the lower compartment (high entropy) have lost
their capacity to work. However, this hour-glass can’t be turned around: wasted
energy cannot be recycled, unless more energy is invested (Georgescu-Roegen
1971, quoted by Daly — Cobb 1989: 11-12).
The realm of the economy is hardly an exception from this general law. On the
basis of the first fundamental law of thermodynamics, it can be declared that the
increment of any growth in the production of physical goods in the economy has
a dual effect: on the one hand, the amount of material and energy extracted from
nature increases accordingly; on the other, the amount of waste emitted into the
environment also grows by the same measure. It remains for the waste processing
capacity of the environment to assimilate it (Nijkamp 1977: 12, quoted by Barbier
1989: 52). The second law demonstrates that energy becomes included in the
economic processes in the form of low entropy (this type of energy is usable for
mechanical work), then waste heat and other pollution leave the processes as output
(high entropy). Thus, the flow of energy and material through the economy
(throughput) becomes an important factor (Boulding 1966).
Indispensable low-entropy is available only from two sources: fossils and minerals
condensed under the ground, and radiation from the sun. Mineral stocks are
obviously limited, although the pace of their usage largely depends on human
decisions. The stock of energy from solar radiation is practically unbounded, but
its flow is limited. Solar energy and other renewable energy resources are limited
by the volume of available solar radiation and by the growth potential of plants
and animals. This implies a natural constraint on economic growth. However,
economic growth may exceed — at least temporarily — this limit by utilizing our
low-entropy reserves which stored up solar energy absorbed earlier. The throughput
of energy (or social metabolism, see Dombi, 2022) sustains or increases order in
the human economy, but — by depletion and pollution — it generates greater
disorder in the rest of the natural world (Daly 1979: 74-76).
‘Neoclassical environmental economics also addresses the issue of future generations and promotes
an adequately chosen discount rate (Pearce — Turner 1990: 211-225). However, this concept
devalues the future compared to the present.