The human footprint on the planet has increased enormously, not merely by the factor of about 5.3 times suggested by population growth, but more like the 45 times suggested by the rise in total consumption of energy.
Neoclassical economists have long held that industrial societies will not run out of needed resources for two reasons: 1) Rising prices for scarce resources will lead to more efficient use of them, and 2) those same rising prices will spur innovation that will end the need for the scarce resource or find a more abundant substitute. Many of the same economists have also embraced the idea that exponential growth of the world economy can go on indefinitely, in part because of the effect of prices on efficient use of resources and substitution for them.
Some scientists and even a few economists are concerned enough to propose an entirely different basis for economics. First, they point to the impossibility of perpetual economic growth. Since the economy is a subset of the environment, it cannot grow larger than that environment. Yes, we may learn to do things more efficiently and more intelligently over time. But at some point the physical throughput of the economy will cease to grow. We simply cannot process more material than is contained in the entire biosphere.
Second, efficiency in resource use has only led to greater consumption, a counterintuitive outcome. The world has seen again and again that as efficiency in resource use increases, prices drop and more and more people are able to afford and therefore demand those resources to enhance the quality of their lives. Efficiency also tends to promote overall economic growth. The end result is faster depletion of finite resources and overuse of renewable ones such as fisheries.
Third, substitution requires time. Because industrial society is entirely dependent on the continuous functioning of its machine infrastructure, disruption resulting from the failure to find a substitute for a critical input such as, say, fossil fuels, in a timely fashion risks the collapse of that system.
These and other concerns have led to a widening literature on what is now referred to as biophysical economics. Biophysical economics is often used interchangeably with ecological economics. While biophysical economics borrows much of its analysis from ecological economics, biophysical economics focuses on the central role of energy flows through the economic system and therefore the role that entropy and depletion play in its functioning and prospects.
The main insight in biophysical economics is that the use of finite fossil fuel resources is a linear system, a one-way street if you will, when it comes to entropy. All of human civilization now depends on the exponentially increasing use of fossil fuels. In energetic terms we are taking low entropy matter and converting it to high entropy matter using some of the energy liberated by the conversion to perform work in society. This is just a fancy way of describing the combustion of fossil fuels which provide 86 percent of the energy for the global economy.
Since fossil fuels are finite and substitution requires time, it is critical that the move from fossil fuels to some other energy source for the economy begin long before exhaustion so current sources of energy can be used to build the next energy economy.
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