The conclusions presented in this section follow lines drawn by Ayres over a decade ago (Ayres 1989a). Compared with the production system of the biosphere, which has evolved to a nearly perfect system for recycling materials, our industrial production system has three main deficiencies.
From the three salient characteristics, described by Ayres (1989a), that mark the difference between the naturally evolved biosphere and its human-designed industrial counterpart, the first is that the metabolic processes of biological organisms are derived (by photosynthesis) from a renewable source, sunlight (ibid., p.34). In contrast, the energy input of our industrial system depends heavily on the extraction of non-renewable raw materials (fossil fuels). 'In this sense, the industrial system of today resembles the earliest stage of biological evolution, when the most primitive living organisms obtained their energy from a stock of organic molecules accumulated during prebiotic times' (ibid., p.44). Here we have one of the origins of anthropogenic emissions.
The second characteristic is that the metabolism of living organisms (cells) is executed by multi-step regenerative chemical reactions in an aqueous medium at ambient temperatures and pressures (Ayres 1989a, p.39). In contrast to this capability, our industrial production system can be characterized as a throughput economy where the industrial processes are irreversible transformations. A low transformation intensity follows from this. It is low because the industrial processes differ from biological organisms in that they are not (yet) able to build complex molecules directly from elementary building blocks with relatively few intermediates, as, for example, by the citric acid cycle in each cell of a living organism (ibid., p.43). Within multi-step regenerative chemical reactions, controlled by catalysts (enzymes), most process intermediates are regenerated internally within the cell (ibid., p. 39).
Generally, a cyclic organization of production processes is a necessary condition of self-reproducing systems. If, as in industrial production, such a cyclic organization is absent and the system is dominated by process chains, self-reproduction does not take place and intermediates are embodied in downstream products or immediately wasted.
'The third salient characteristic differentiating the biosphere from the industrial synthe-sphere is that, although individual organisms do generate process wastes - primarily oxygen in the case of plants and carbon dioxide and urea in the case of animals - the biosphere as a whole is extremely efficient at recycling the elements essential to life. Specialized organisms have evolved to capture nutrients in wastes (including dead organisms) and recycle them' (Ayres 1989a, p.41).
These 'specialized decay organisms' (destruents) constitute a very important part of the biosphere, mainly of the pedosphere (soil), where they interact within a complex transformation network. For an analytical description see, for example, the input-output framework for the natural production system of Strassert (1993, 1997) where four main groups of soil organisms are represented as production/transformation activities which interlink two food chains, the saprophage and the biophage food chain, on two levels, the aerobic and the anaerobic soil level. This important transformation domain is the final complement of the cyclic organization of the material flow as a provision-transformation-restitution cycle (ibid.) which connects the last with the first domain; that is, the restitution domain with the provision domain.
The question arises as to whether, in our industrial production system, there exists such a transformation domain, the function of which can be compared with the final part of the digestive tract (Daly 1995, p.xiii) of the 'organisms biosphere'. The answer must be negative. Most of our industrial recycling activities are far too small in scale to achieve a comparable functional importance. Possibly the evolution of a new domain of industrial destruents in form of the specialized 'cracker' technologies is yet to come.
In an early phase of physical input-output accounting it is quite natural that a lot of conceptual questions are still under discussion. An important example, out of a number of ambiguities, is the water problem. On the one hand, if the data are available, a comprehensive approach is preferred (the German case); that is, all water quantities are counted, including those directly related to a production process (process water) as well as those indirectly related (cooling or irrigation water). However, it can be argued that 'throughput' water has a minimal environmental impact (except where it is very scarce) and that data in many countries are poor. In this case a more restrictive approach, in principle oriented to process water, is suggested (Ayres 2000; Gravgard 1998; Nebbia 1999).
The general problem an accounting scheme should (ideally) avoid is that the overall total of all materials is dominated by the quantities of water. This refers not only to raw materials and residuals, but also to products, which also include water sold to households by water supply enterprises. So when, as in the German case, roughly two-thirds of the total quantity of products of the economy in tons is domestic water and the overall content of water in gross output is about 92 per cent, a PIOT is in danger of presenting only a more or less impure water account.
From this point of view, several authors (Ayres et al. 2000; Gravgard 1998; Nebbia 1999) propose a restrictive convention; namely that water participating in an economic process only as a passive carrier of heat or a diluent of waste should not be counted. On the other hand, water that participates actively in a chemical or biological process must be counted on both sides: that is, both as an input and as an output.4
Gravgard proposes that the input of water be limited to the quantity of water supplied to (embodied in) products in the manufacturing industry, and which therefore leaves the industry again, together with the goods produced. Water supplied to products in agriculture, horticulture, forestry and fishery is implicitly included when calculating biomass weight. Additional water consumption, that is the water which evaporates on the output side or which the sectors discharge to the waste system and so on is not included (Gravgard,1998, p. 9).
Nebbia (1999) too wants not to consider the water flow through the economic system, but only:
a. the amounts of water required, as 'process' water, during the production and transformation of goods (for example, required for the photosynthesis);
b. the amounts of water 'embodied' in the inputs;
c. the amount of water vapor released to air during the production and the use of commodities;
d. the amount of water used for drinking by animals and humans, as needed in the process of food metabolism (ibid., p. 5).
In contrast, the German approach is a comprehensive one. It is oriented to a complete picture of all material (mass) flows through the economic system, but in such a way that active and passive water are separated. In an actual and revised version of the German PIOT the primary input component comprises two corresponding water categories. Besides, a complementary own water account was presented from the beginning of physical input-output accounting.
Considering the different positions, the general problem arises, how to draw appropriate analytical borderlines of production processes and corresponding statistical units. In a sense, one can speak of a revival of an old debate in input-output theory concerning functional or institutional concepts of data representation.
From the point of view that 'every production system of any type whatsoever is a system of elementary processes' and that 'the concept of elementary process is well defined in every system of production' (Georgescu-Roegen 1971, p. 235), two different perspectives are possible; on the one hand, the perspective oriented to a selected elementary (say physical and chemical) process out of the set of elementary processes that constitute the overall production process of a firm or establishment, and the perspective oriented to the overall set of elementary processes of a firm or establishment, on the other hand.
Although both perspectives are related to a functional perspective, the latter perspective includes some organizational and institutional elements as is the case when an establishment is chosen as a basic statistical unit. This perspective, leaving aside practical statistical aspects and recording principles, has a proper justification insofar as, for example, all water is a complementary and therefore essential input, with the consequence that the transformation process cannot take place without it. This is independent of whether passive water, say cooling water, undergoes any transformation or not. In this context, one should remember that cooling water belongs to the material input flows needed for maintaining the funds intact.
Similar problems regarding conventions, albeit with different solutions, apply to air (excluding the air mass that 'accompanies' the flow of used oxygen, nitrogen and carbon dioxide: see Nebbia 1999, p.6), overburden, crude metal ores and biomass in agriculture. (See, for example, Ayres and Ayres 1998.)
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