Biophysical Analysis

The biophysical analysis indicates that a global reward market for mitigated carbon is needed to achieve net-zero emissions.


There is an urgent need for a system diagram that offers a biophysically and economically plausible solution to the challenge of reaching net-zero carbon emissions at the global scale. The most popular system diagrams for describing the sustainable management of material flows are (a) the circular economy diagram, and (b) the steady state economy diagram. These diagrams are associated with the study of ecological economics. These diagrams will be reviewed here when this page is completed. The review will explain why these previous system diagrams are inadequate for managing the anthropogenic carbon balance and the climate system.

A major shortcoming of previous system diagrams—especially the circular economy and the steady state economy diagrams—is that these diagrams represent matter using a “stock-and-flow” approach. A major deficiency of the stock-and-flow approach is that it fails to describe some biophysical processes that govern the flow of carbon in the environment (and indeed the same can be said for various other materials). Ironically, stock-and-flow models are based on a macroscopic worldview for matter and energy, which is the standard worldview that is used by neoclassical economists. The irony is that ecological economists are effectively using the same “stock and flow” approach to economic modelling as are the neoclassical economists who they often criticise.

The stock-and-flow worldview is more similar to the Newtonian worldview than it is to the modern scientific worldview that was established with the advent of quantum physics in the early 20th century. The worldview of thermodynamics and of quantum physics are strongly aligned, and this is because matter is understood to be comprised of innumerable microscopic particles, called “molecules”. Molecules have constantly changing position and momenta, and so they can only be described probabilistically (not deterministically). The microscopic worldview for matter and energy is the bedrock of the thermodynamic approach, and this worldview is starkly missing from the discourse on climate change economics.

Figure 1. The standard system diagram that is used in the field of ecological economics. This system diagram lacks important details that are needed to understand the biophysical process that govern the cycling of carbon in the environment. This system diagram also overlooks the economic policies that have the capacity to achieve net-zero carbon emissions and a stable biosphere (refer Wikipedia).

The microscopic worldview of thermodynamics was first established by the Austrian scientist Ludwig Boltzmann in the late 1800’s when he developed a theory for entropy—thereby giving rise to the second law of thermodynamics. Boltzmann’s approach set the scene for a field of study called “statistical mechanics”.

In the following biophysical analysis a new biophysical system diagram will be presented, called the “Living Systems Economy”. Unlike the circular economy and the steady state economy diagrams, the Living Systems Economy diagram includes some critically important physical features of carbon and the environment that are usually overlooked, namely: material phases, system irreversibility and gravity. Material phases and system irreversibility are strongly related to the concept of entropy, and these may be collectively called “entropic effects”.

The three major phases for carbon in the environment are (1) solid, (2) liquid and (3) gas. Biomass is a complex mixture of solids, liquids and gases, and so it may be thought of as a fourth complex phase that has the property of being “alive”. System irreversibility is a concept that is related to entropy, however system irreversibility is usually overlooked by ecological economists thereby leading to unreliable or false interpretations.

Why do ecological economists overlook important entropic effects, such as material phases and irreversibility? The most likely explanation is that ecological economics as a field of study has failed to integrate entropic effects into their narrative on economic sustainability. This problem originated in the work of Nicholas Georgescu-Roegen who attempted to bring the concept of entropy into the economic discourse. Georgescu-Roegen failed to bring entropy into the discourse because the standard definition of entropy does not provide sufficient information to establish a causal link between entropy and  “economic value”. Moreover, entropy as a concept only provides information on energy dissipation in the most general sense, and so it lacks the context that is needed to explain socially framed concepts that emerge from human beings as living organisms. Socially framed concepts, such as economic value, morality and love, are all emergent properties and are specific to the human experience. Socially framed concepts are not explicable using simplistic references to entropy.

The system diagram for the Living Systems Economy introduces some new theoretical concepts and methods that are designed to overcome the limitations of previous system diagrams, such as the circular economy and the steady state economy diagrams. The following presentation will not attempt to provide a complete theoretical proof. Physicists and scientists may expect to see a complete theory or “proof” for the  Living Systems Economy. This “proof” is available, but it will not be presented here for reasons of brevity. The complete theory will be made available through a separate website, but only for potential partners who are genuinely interested in advancing the theory with reviews, experimental tests and academic publications. For information on opportunities to parter on the Living Systems Economy research, please send us a message using the contact form or the partner form.

Approximate Release Date

Item Date Topic
7 1 April 2022 📆 Biophysical Analysis

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Updated 13 September 2021