Pew Research Center identified the economy as America’s top policy priority for 2023 with the protection of the environment ranking only 14th. But the same company found that 54% of American’s view climate change as a major threat but there is a vast and increasingly disparate opinion between the Democrats and Republicans in this regard.
The European Union’s Autumn 2022 survey concurs with the US opinion that the economy, at least as it pertains to the rising cost of living, is the top priority. With Climate Change, the 3rd leading worry for EU citizens at 81%. In line with the progressive American point of view.
Nicholas Georgescu-Roegen a Romanian mathematician, statistician and economist best known for his 1971 book, The Entropy Law and the Economic Process, argued that all natural resources are irreversibly degraded when put to use in economic activity per the following graphic.
CC0, via Wikimedia Commons
He depicted the flow of natural resources through the economy: where energy and materials enter the economy, are transformed, and manufactured into goods, leaving degraded energy and materials only some of which can be recycled, along with low-grade thermal energy in the form of waste heat.
He was one of the first economists to surmise that all of earth's mineral resources will eventually be exhausted at some point with the result the world economy will collapse bringing about human extinction.
His seminal work, The Entropy Law and the Economic Process was fundamentally about thermodynamics, which he initially believed applied equally to energy as well as material, but in the latter case it does not.
Thermodynamics is based on four laws: The first law states that energy is neither created nor destroyed in any isolated system (a conservation principle). The second law of thermodynamics – also known as the entropy law – states that in an isolated system, entropy, a measure of the disorder in a system, normally cannot decrease. The third law states that the entropy of a system approaches a constant value as the temperature approaches zero. And The zeroth law. which states, two systems are both in thermal equilibrium with a third system, then they are in thermal equilibrium with each other.
Georgescu-Roegen understood recycling of material resources is possible, but only by using up some energy resources plus an additional amount of other material resources; and energy resources, which in turn, cannot be recycled and dissipates waste heat.
Global warming however is an excess of, low-grade, solar energy that can be in part converted to work, and the balance stored away in deep water for later use. Furthermore, the ocean is a cornucopia of materials that can become inputs to the economic system. Particularly when there is excess of energy available to harvest these materials, which is the case with global warming.
In the paper, Heat stored in the Earth system 1960–2020: where does the energy go? an international group of researchers estimated that, between 1971 and 2020, around 380 zettajoules of energy was trapped by global warming. This is equivalent to 12,050 terawatts, or 241terawatts/year, about 12 times annual primary energy consumption. And this accumulation is increasing considering, Resplandy et al, in their paper Quantification of ocean heat uptake from changes in atmospheric O2 and CO2 composition estimated between 1991-2016 the oceans alone were accumulating 409 terawatts a year.
Georgescu-Roegen was a radical pessimist, and his theoretical position became to be known as 'entropy pessimism'.
But Thermodynamic Geoengineering and. Robert Ayres ‘spaceship economy” are rebuttals to this pessimism.
With an ample supply of solar energy, all waste materials – including the portion of the heat of warming not converted to work - can be temporarily discarded and stored in inactive reservoirs before being recycled and returned to active use in the economic system at some later point in time.
Georgescu-Roegen was a student and protégé of Joseph Schumpeter, who argued that economic change revolves around innovation, entrepreneurial activities, and market power.
His "gale of creative destruction" describes the "process of industrial mutation that continuously revolutionizes the economic structure from within, incessantly destroying the old one, while ceaselessly creating a new one".
But he argued that “the agents that drive innovation and the economy are large companies that have the capital to invest in research and development of new products and services and to deliver them to customers more cheaply, thus raising their standard of living.” While concurrently arguing that the innovation and technological change of nations comes from entrepreneurs or wild spirits like Jobs, Gates, Bezos and Musk, who had initially little capital for research and development of their products.
The World Bank's report "Doing Business" was influenced by Schumpeter's focus on removing impediments to creative destruction. But this message has been lost on the suppliers of 80% of our energy and 15% of the global GDP who are Luddites when it comes to creative destruction. With the result, western society's politics is being fractured in the absence of the innovation that can bring civilization back from the edge of the environmental abyss.
The relevance of thermodynamics to economics is we have our priorities backwards. It is in our enlightened self interest to put the thermodynamics horse ahead of the economic horse.