The Impact of Entropy Production and Emission Mitigation on Economic Growth

Abstract

Entropy production in industrial economies involves heat currents, driven by gradients of temperature, and particle currents, driven by specific external forces and gradients of temperature and chemical potentials. Pollution functions are constructed for the associated emissions. They reduce the output elasticities of the production factors capital, labor, and energy in the growth equation of the capital-labor-energy-creativity model, when the emissions approach their critical limits. These are drawn by, e.g., health hazards or threats to ecological and climate stability. By definition, the limits oblige the economic actors to dedicate shares of the available production factors to emission mitigation, or to adjustments to the emission-induced changes in the biosphere. Since these shares are missing for the production of the quantity of goods and services that would be available to consumers and investors without emission mitigation, the "conventional" output of the economy shrinks. The resulting losses of conventional output are estimated for two classes of scenarios: (1) energy conservation; and (2) nuclear exit and subsidies to photovoltaics. The data of the scenarios refer to Germany in the 1980s and after 11 March 2011. For the energy-conservation scenarios, a method of computing the reduction of output elasticities by emission abatement is proposed.

Economic Growth in the USA and Germany 1960–2013: The Underestimated Role of Energy

“…These authors expect that we may enter an "Age of the Periodic Table." A rough model of limits to growth due to materials scarcity, where the output elasticities in Eq. (1) are multiplied by recycling functions, is disregarded here; and the impact of emissions of particles like SO 2 , NO X , and CO 2 on output elasticities and economic growth has been considered elsewhere (Kümmel 2016).…”

Energy, Entropy, Constraints, and Creativity in Economic Growth and Crises

“…However, claiming to have discovered a “fourth law of thermodynamics” on the dissipation of matter [ 17 , 18 ] he had created some confusion. This was resolved, when it became clear that the dissipation of matter is included in the Second Law of Thermodynamics [ 19 ] via the particle-current-density terms, which are one component of the non-negative density of entropy production derived in non-equilibrium thermodynamics [ 20 ]; see also [ 10 ] (p. 154ff) and [ 21 ].…”

“…For this, models such as the HARMONEY model [ 65 ], a long-term dynamic growth model that endogenously links biophysical and economic variables in a stock-flow consistent manner, may be useful. Furthermore, production functions with output elasticities that take into account the impact of emission mitigation [ 21 ], may also serve as analytical tools. Consistent data on capital, labor, and energy in different sectors of the economy will be important.…”

“…Photovoltaics (PV), whose specific total life-cycle CO -emissions range from 70 to 150 g CO per kilowatt-hour, is still well accepted. To keep it that way the government has tried to limit the payments of the electricity consumers to the providers of PV power to 10–11 billion Euros annually [ 21 ]. Looking into the future, GreenMatch, “a comprehensive guide designed to help you navigate the transition to renewable energy” [ 81 ] points out the need to recycle PV panels when their life cycle ends: “If recycling processes were not put in place, there would be 60 million tons of PV panels waste lying in landfills by the year 2050; since all PV cells contain certain amounts of toxic substances that would truly become a not-so-sustainable way of sourcing energy.” GreenMatch estimates the amount of solar panel waste (in tons) to be for (a) the USA in 2016: 6500 t, 2030: 400,000 t, 2050: 7500,000 t, (b) Germany in 2016: 3500 t, 2030: 400,000 t, 2050: 4300,000 t, (c) Saudi Arabia in 2016: 200 t, 2030: 3500 t, 2050: 450,000 t. The energy requirements for recycling these quantities of PV waste, and the associated emissions and cost, remain to be estimated.…”

Energy in Growth Accounting and the Aggregation of Capital and Output

“…This, and how the physical units of output and capital can be related to deflated monetary units, is shown subsequently in some more detail than in prior publications. In so doing we follow Kümmel (2011). One may consider this as a response to the well-known objections against monetary aggregation of output and capital that have been raised since the times of the "Cambridge capital controversy" (Robinson 1971).…”