Emergy Analysis

One example of a new form of economics, related to ecological economics, is termed emergy analysis (H. T. Odum, 1996). Emergy (short for "energy memory") is a measure of embodied energy in a product or process which in turn is a measure of its value. Emergy analysis is an accounting system in which everything is accounted for with energy units rather than money. In this way contributions from nature and environmental impacts can be assessed with the same units as traditional economic values. Emergy analysis is an analytical technique that calculates values that can be used for making decisions. This makes it one of only a few existing types of accounting systems. The concept and method were developed by H. T. Odum, based on his earlier work on ecological energetics. Recently, Mark Brown, who was a student of H. T. Odum, has become a leader in applying emergy analysis to a number of problems (Brown and Herendeen, 1996; Brown and Ulgiati, 1997, 1999; Brown et al., 1995).

The approach of emergy analysis is to convert everything to one unit which is then used in decision-making algorithms, such as cost-benefit analysis, and others, such as the investment ratio, that have been developed especially for this approach (H. T. Odum, 1996). Thus, two major steps are involved. First, all flows and storages relevant to a problem are quantified and converted to emergy, using published conversion factors called transformities. Then, the emergy values are used in algorithms to make assessments and to provide perspective for decision making. Emergy analysis was applied to the energy signature of a mesocosm in Chapter 4. Several other examples are discussed below to illustrate the approach.

Figure 8.6 shows an assessment of the estuarine fishery discussed earlier. The fish harvest is shown as input from the environment to the economic process of the fishery. It is valued as the emergy flow from the estuarine ecosystem that produces the fish. This flow (3 x 106 coal equivalent calories) is then divided by an energy-

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Eventual 3 x 106 CE

Economic 3 x 10 CE Contribution: 11 x 103 CE/\$1

FIGURE 8.6 Energy circuit model of a fishery evaluated with emergy analysis. The economic contribution of the estuary is equivalent to \$272/acre/year whereas the economy only recognizes a value of \$20/acre/year, based on the work of the fisherman. This type of analysis documents the undervaluing of nature by conventional economics. (From Odum, H. T. and E. C. Odum. 1976. Energy Basis for Man and Nature. McGraw-Hill, New York. With permission.)

Eventual 3 x 106 CE

Economic 3 x 10 CE Contribution: 11 x 103 CE/\$1

FIGURE 8.6 Energy circuit model of a fishery evaluated with emergy analysis. The economic contribution of the estuary is equivalent to \$272/acre/year whereas the economy only recognizes a value of \$20/acre/year, based on the work of the fisherman. This type of analysis documents the undervaluing of nature by conventional economics. (From Odum, H. T. and E. C. Odum. 1976. Energy Basis for Man and Nature. McGraw-Hill, New York. With permission.)

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