It is the study of the ways and means by which human societies procure and use energy and other biological and physical resources to produce, distribute, consume and exchange goods and services, while generating various types of waste and environmental impacts. Biophysical economics builds on both social sciences and natural sciences to overcome some of the most fundamental limitations and blind spots of conventional economics. It makes it possible to understand some key requirements and framework conditions for economic growth, as well as related constraints and boundaries.[3]
Moreover, many economic activities result in the formation of structures. Thermoeconomics applies the statistical mechanics of non-equilibrium thermodynamics to model these activities.[1] In thermodynamic terminology, human economic activity may be described as a dissipative system, which flourishes by consuming free energy in transformations and exchange of resources, goods, and services.[7][8]
A comprehensive and accurate model of how real economic systems work.
Thermoeconomics is based on the proposition that the role of energyinbiological evolution should be defined and understood not through the second law of thermodynamics but in terms of such economic criteria as productivity, efficiency, and especially the costs and benefits (or profitability) of the various mechanisms for capturing and utilizing available energy to build biomass and do work.[9][10][dubious – discuss]
"[T]he escalation of social protest and political instability around the world is causally related to the unstoppable thermodynamics of global hydrocarbon energy decline and its interconnected environmental and economic consequences."[11]
Under this analysis, a reduction of GDP in advanced economies is now likely:
when we can no longer access consumption via adding credit, and
with a shift towards lower quality and more costly energy and resources.
The 20th century experienced increasing energy quality and decreasing energy prices. The 21st century will be a story of decreasing energy quality and increasing energy cost.[12]
^Pokrovskii, Vladimir (2020). Thermodynamics of Complex Systems: Principles and applications. IOP Publishing, Bristol, UK. Bibcode:2020tcsp.book.....P.
^Burley, Peter; Foster, John (1994). Economics and Thermodynamics – New Perspectives on Economic Analysis. Kluwer Academic Publishers. ISBN0-7923-9446-1.
^Raine, Alan; Foster, John; Potts, Jason (2006). "The new entropy law and the economic process". Ecological Complexity. 3 (4): 354–360. doi:10.1016/j.ecocom.2007.02.009.
