Thermodynamic Implications for Nonrenewable Resource Extraction with Endogenous Technical Change

Abstract

In the previous chapters I introduced the core concepts of economics, ecology and thermodynamics and drew conclusions as to the relevance of these concepts for the analysis of economy-environment interactions. Based on these conclusions, I present in this chapter a model of a single industry extracting a nonrenewable resource from a mine, and releasing waste materials into the environment. Additionally, the extraction process results in the dissipation of low-entropy energy. The model concentrates on thermodynamic implications for economically optimal extraction of a nonrenewable resource and is translated into a nonlinear dynamic computer simulation. The purpose of the computer simulation is to illustrate the theoretical findings.