The Road to Sustainability

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The Sustainable World

Aims and Objectives

Sustainability is a key concept of 21st century planning in that it broadly determinesthe ability of the current generation to use resources and live a lifestyle withoutcompromising the ability of future generations to do the same. Sustainability affectsour environment, economics, security, resources, health, economics, transport andinformation decisions strategy. It also encompasses decision making, from the highestadministrative office, to the basic community level. It is planned that this BookSeries will cover many of these aspects across a range of topical fields for thegreater appreciation and understanding of all those involved in researching orimplementing sustainability projects in their field of work.

Data AnalysisData Mining MethodologiesRisk ManagementBrownfield DevelopmentLandscaping and Visual Impact StudiesPublic Health IssuesEnvironmental and Urban MonitoringWaste ManagementEnergy Use and ConservationInstitutional, Legal and Economic IssuesEducationVisual Impact

Simulation SystemsForecastingInfrastructure and MaintenanceMobility and AccessibilityStrategy and Development StudiesEnvironment Pollution and ControlLand UseTransport, Traffic and IntegrationCity, Urban and Industrial PlanningThe Community and Urban LivingPublic Safety and SecurityGlobal Trends

Topics

Main Editor

E. TiezziUniversity of Siena

Italy

D. AlmorzaUniversity of CadizSpain

M. AndrettaMontecatiniItaly

A. BejanDuke UniversityUSA

A. BogenDown to EarthUSA

I. CruzadoUniversity of Peurto Rico-MayazuezPuerto Rico

W. CzyczulaKrakow University of TechnologyPoland

M. DavisTemple UniversityUSA

K. DorowPacific Northwest National LaboratoryUSA

C. DowlenSouth Bank UniversityUK

D. EmmanouloudisTechnical Educational Institute ofKavalaGreece

J.W. EverettRowan UniversityUSA

R.J. FuchsUnited NationsChile

F. GomezUniversidad Politecnica de ValenciaSpain

K.G. GouliasPennsylvania State UniversityUSA

A.H. HendrickxFree University of BrusselsBelgium

I. HideakiNagoya UniversityJapan

S.E. JorgensenThe University of PharmeceuticalScienceDenmark

D. KaliampakosNational Technical University ofAthensGreece

H. KawashimaThe University of TokyoJapan

B.A. KazimeeWashington State UniversityUSA

D. KirklandNicholas Grimshaw & PartnersUK

A. LebedevMoscow State UniversityRussia

D. LewisMississippi State UniversityUSA

N. MarchettiniUniversity of SienaItaly

J.F. Martin-DuqueUniversidad ComplutenseSpain

M.B. NeaceMercer UniversityUSA

R. OlsenCamp Dresser & McKee Inc.USA

M.S. PaloThe Finnish Forestry ResearchInstituteFinland

J. ParkSeoul UniversityKorea

M.F. PlatzerNaval Postgraduate SchoolUSA

V. PopovWessex Institute of TechnologyUK

A.D. ReyMcGill UniversityCanada

H. SozerIllinois Institute of TechnologyUSA

A. TeodosioPontificia Univ. Catolica de MinasGeraisBrazil

W. TimmermansGreen World ResearchThe Netherlands

R. van DuinDelft University of TechnologyThe Netherlands

G. WaltersUniversity of ExeterUK

The Road to SustainabilityGDP and future generations

Federico M. Pulselli,Simone Bastianoni,Nadia Marchettini

&Enzo Tiezzi

University of Siena, Italy

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A Catalogue record for this book is availablefrom the British Library

ISBN: 978-1-84564-140-5ISSN: 1476-9581

Library of Congress Catalog Card Number: 2007939221

The texts of the papers in this volume were setindividually by the authors or under their supervision.

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F. M. Pulselli, S. Bastianoni, N. Marchettini & E. TiezziUniversity of Siena, Italy

Contents

Presentations

Environment, welfare and lifestyle........................................................... ix Alberto Caldana – Environment Policy Officer (Province of Modena)

ISEW – for a sustainable Province of Rimini ....................................... xi Cesarino Romani – Environment Policy Officer (Province of Rimini)

The Road to Sustainability: GDP and Future Generations

Preface ......................................................................................................... xv

Part I: Foundations................................................................................... 1

1 The megaptera’s song, or what the GDP does not tell us.............................................................................................. 3

2 Economics and environmental sensibility ................................... 15 3 The foundations of sustainability .................................................. 33 4 Sustainable management of resources: commons,

knowledge and nature ..................................................................... 45 5 Thermodynamics and the economics system: autarchy and

globalisation ...................................................................................... 55 6 The cube and the living system ..................................................... 65 7 Transdisciplinarity............................................................................. 73

Part II: Methods ...................................................................................... 81

8 ‘Measuring’ sustainability ................................................................ 83 9 Plus and minus of sustainability: the index of sustainable

economic welfare ........................................................................... 111

Part III: Applications ........................................................................... 123

10 ISEW in the Province of Modena .............................................. 125 11 ISEW in the Province of Rimini ................................................. 157 12 Beyond the threshold .................................................................... 177

Conclusion ............................................................................................ 187 Names index ............................................................................................ 191 Subject index ............................................................................................ 195

The Province of Modena has decided to pursue a quality of development in linewith the principles of sustainability. The challenge of environmental quality willbe decisive for the economic and social future of the province. Environmentalquality means focussing on regional excellence and localisation of firms.Environmental sustainability is linked to the development of the human andsocial capital of our area and is based on social cohesion and the capacity toreinforce community identities. The aim of sustainable development and qualitystimulates and guides innovation in our area. We are therefore investing in theenvironment, developing knowledge, research, innovation and creativity,mobilising resources and talents.

Significant examples of this are quality agriculture with the 2008 World OrganicAgriculture Conference in Modena, the quality of parks and reserves (more than10% of the area of the province) and export of quality manufactured goods. Theproduction scene of the province is becoming dynamic and has gone beyond theold dichotomy of environment versus industry. Firms no longer ignore questionssuch as efficient use of resources, optimisation of primary materials, reductionof wastes, waste recycling and limitation of emissions. The whole ceramics sectorhas EMAS certification and more than 200 firms are presenting requests forintegrated environmental authorisations in a climate of strong collaborationwith the provincial administration.

In order to move in this direction, instruments are needed to indicate possibleinnovations in local policy. National systems of accounting and their indicators,such as GDP, have proven inadequate for measuring the sustainability of aneconomy: because they do not consider depreciation of natural and social capital,they do not reflect the perception of welfare and the opinion that families haveof local development. It is therefore essential to consider environmental andsocial components as well. Today the concept of welfare is no longer linkedexclusively to the earning power of a population, but overlaps with the conceptof quality of life. This is why we chose to use the index of sustainable economicwelfare, ISEW, which corrects GDP, including social costs and short and longterm environmental damage.

Environment, welfare and lifestyle

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The analysis was conducted by the Department of Chemical and BiosystemSciences and Technology, Siena University, under the supervision of ProfessorEnzo Tiezzi. It not only enabled us to assess the current situation regarding thequality of development in the province, but also to examine long time trendsfrom 1971 to 2003. The situation in our province has the problems typical of aheavily anthropised area with a strong industrial sector, however there are signsthat the path already undertaken can have positive results. The study shows thatthe environment must be the basic discriminant of planning policy in order toachieve a quality of development that improves quality of life.

The Environment and Sustainable Development Department of the provincehas therefore undertaken a series of concrete steps towards territorial sustainability,with the priority aim of greater environmental protection and thus protection ofthe health and welfare of citizens. We are acting on all the major environmentalfronts, involving all local stakeholders through the forum of Agenda 21. In May2005, the Provincial Council approved the Provincial Waste Management Plan,the main aim of which is to reduce waste production and to increase differentiation(55%), recycling and reuse. In March 2007 we approved the Air Quality Plan witha strong commitment as regards transport and collaboration between firms andlocal bodies. The Water Quality Plan is being adopted with strong measuresregarding the quantity and quality of water resources. The Regional Quarry Planis also being adopted and aims at reducing land and resource consumption toimprove environmental quality and landscape. We are also reinforcing the systemof parks and reserves. The province has two regional parks, three nature reserves,three areas of ecological restoration, fauna sanctuaries and sites of the Nature2000 network covering 10% of the province. It is an important resource for aheavily anthropised province, improving quality of life. We think that good landmanagement, both environmental and cultural, that considers those who liveand work in the province, is a strong point of the Modena system in the panoramaof wealthy European areas.

Let us examine how the path towards sustainability divides into many parallelpaths. Each area of direct planning has had the environment and society as aprime aim, but this is not enough. It is also necessary to spread environmentalawareness in order to optimise relationships between persons, social groups,society and the environment. By becoming aware of their role and responsibility,individuals can improve their own lives and contribute to sustainabledevelopment. The Province has therefore taken different initiatives to supportand increase environmental communication and education, because investmentin knowledge and awareness is a necessary condition for creating a society capableof developing, not just of growing, in other words a society on the path towardssustainability.

Alberto CaldanaModena Provincial Administration Environment Policy Officer

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For a number of years, the economy of our province has been flagging. Ourmodel of development, which produced a good level of general wealth over theyears at the expense of ‘Riminisation’, is showing its limits. The model is largelybased on unlimited consumption which has increased bank accounts whilegenerating striking social and environmental contradictions. I therefore took onthe task of changing the model and aiming for a more sustainable type ofdevelopment. This is a difficult task, and if people are to accept it, much attentionand participation is needed. It was necessary to talk to local actors, the trueprotagonists of growth, and reach an agreement about what sustainabledevelopment is. It was decided to request an analysis of sustainability by thegroup of Professor Enzo Tiezzi at Siena University, which led to the calculationof ISEW.

The project ‘Sustainable Province of Rimini’ set out to obtain insights intothe province from different points of view. We began with two informationsources:

• Report on the Economy of the Province of Rimini 2006–2007 by the Chamber of Commerce and the Fondazione Cassa diRisparmio di Rimini which indicated a healthy economy in allsectors, with upturns in tourism and industry. Employmentincreased to 65.8%, approaching the Lisbon objectives, GDPincreased by 5.6% in all sectors, the number of firms increased by8.4%.

• Report on the State of the Environment 2001 and 2006and Sustainability Analysis 2005, which indicated major signs ofstress in different environmental compartments: land use alongthe coast is the main cause of these problems. In summer, airpollution and sewage often exceed safety levels. The main economicsectors place the province in a very critical position with regard toimports and local resources. In 2005, 70 external resources wereimported for every local resource. Indices of sustainability such as

Index of SustainableEconomic Welfare (ISEW) – for asustainable Province of Rimini

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eMergy and per capita emission of greenhouse gases are high andthe Ecological Footprint is double that of the average Italian.Water resources have a high regeneration capacity, they areoverexploited and river estuaries are polluted and drying up, withnegative repercussions on coastal water quality. Ecosystems havebecome artificial in more than 80% of the province and only 10%of the area has a good level of naturalness. Taken together, theseresults indicate a situation of environmental risk for ecosystemsand for human health. Though some may consider theseproblems negligible at local level, at global level the same problemsexist on a very worrying scale, as shown by the fourth report ofthe Intergovernmental Panel on Climate Change (IPCC, February2007), and ought to make us think.

Both sources provide clear indications, but they are two different ways of lookingat the situation, two studies that do not seem to have any relation between them.Economy and environment are represented as separate and independent.

With regard to the first report, economists have always proposed GDP as ameasure of the production of final goods and services per year and GDP is stillconsidered a strategic value for defining the growth of a community. Governmentsand politicians are preoccupied with GDP, especially with how to increase GDP.However this index has many limits. Indeed, Senator Robert Kennedy questionedthe importance attributed to GDP, claiming that it represents “everything exceptthat which makes life worthwhile.” GDP does not distinguish between activities thatproduce welfare and those that damage welfare, nor does it consider the depreciationand devaluation of natural capital caused by human activities.

With regard to environmental sustainability, our province began to adoptmeasures in this sense many years ago, but challenges still await us if we reallywant to make development more sustainable. The process began with the FirstInternational Conference on Sustainable Tourism, held in June 2001, and thesigning of the Rimini Charter. The forum of Agenda 21 was signed in 2002 andits action plan led to the creation of 20 ecosustainable bathing establishmentswith energy self-sufficiency and reutilisation of water. There have been initiativespromoting sustainable urban and sea transport, such as methane andhydromethane scooters, door-to-door differentiated rubbish collection, a passive-house school, an off-shore wind farm and calculation of ISEW.

After their collaboration with scientists at Siena University, the Provinces ofRimini and Modena published an analysis based on indicators alternative toGDP. ISEW was developed by Herman Daly and John Cobb in 1989 and includesaspects of economic life ignored by GDP. It combines positive factors (likeservices of domestic labour, services of durables, area of nature reserves) withnegative factors (defensive expenditures, loss of natural capital, use of nonrenewable resources…), integrating different economic, social and environmental

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components. ISEW therefore enables regions to be represented in a more realisticway.

The time trend of ISEW of the Province of Rimini shows a progressiveincrease in costs of environmental impact in various sectors and due to increasinguse of non renewable energy. To this is added a set of environmental costs,common to all post-industrial economies, due to air and water pollution, noiseand road accidents. As noted, natural areas and habitats of protected species area grave weakness: the absolute value is low and growth has been less than theregional average.

Positive factors are widespread economic welfare.When all the values are summed, ISEW is seen to have grown less than GDP.

In the mid eighties GDP overtook ISEW and has exceeded it ever since. ThusISEW confirms the vitality of the provincial economy but a fraction of GDP(almost €800,000,000) creates many problems that severely affect welfare.Environmental and social sustainability are therefore sectors in need ofimprovement, for example by reducing pollution, increasing natural areas,remediating coastal environments, restoring wetlands and reducing privatedefensive spending for health and education.

My sincere thanks to the group from Siena University who enabled this pilotproject to come to fruition, especially Federico M. Pulselli and Enzo Tiezzi.

Cesarino RomaniEnvironment Policy Officer, Rimini Provincial Administration

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Preface

James Maitland, Earl of Lauderdale, a classical economist, noted in 1819 animportant distinction between ‘public wealth’ and ‘private riches.’ 1 Public wealth‘consists of all that man desires that is useful or delightful to him’. Private richesconsist of ‘all that man desires that is useful or delightful to him, which exists ina degree of scarcity’. Scarcity is a necessary condition for something to have exchangevalue and be counted as private riches. In the Garden of Eden (no scarcity)private riches were zero, but public wealth was at its maximum. Creating scarcityindeed may increase private riches, but at the expense of diminishing publicwealth. Lauderdale felt that, ‘the common sense of mankind would revolt at aproposal for augmenting wealth by creating a scarcity of any good generallyuseful and necessary to mankind.

Goods can be rival or non-rival. My shirt is a rival good because if I amwearing it you cannot wear it at the same time. The warmth of the sun is non-rival because my enjoyment of it does not preclude the same enjoyment byothers. Rivalness is a physical property of a good that precludes its simultaneoususe by many people. Goods are also excludable or non-excludable. Excludabilityis a legal right to prevent another from using your property. For example youcould wear my shirt if I let you, but that is up to me because it is my property. Myshirt is thus both rival and excludable, as are most market goods. The warmth ofthe sun is both non-rival and non-excludable. We cannot buy and sell solarwarmth. The categories that cause problems and will be of interest to us are theremaining combinations: rival and non-excludable, and non-rival and excludable.

The economy as a commonwealthA national economy itself constitutes a commonwealth and used to be referredto as such2 . The resources, customs, laws, division of labor, distribution of1 Lauderdale, J.M., (1819) An inquiry into the nature and origin of public wealth and into the means andcauses of its increase, Archibald Constable, Edinburgh.

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2 As defined by the OED, commonwealth = ‘the whole body of people constituting anation or state, the body politic; a state, an independent community, esp. viewed as a bodyin which the whole people have a voice or an interest.’.

purchasing power, labor markets, etc. of a nation constitute a community, cohesiveinternally, but with strict limits to access from the outside. Imports of goodsand services are controlled, imports of capital are controlled, and immigration ofpeople is controlled, all in the internal interests of citizens of the commonwealth.Traditionally, national markets have not been thought of as an open-accesscommons. Globalization aims to change that – to erase national boundaries foreconomic purposes (free trade, free capital mobility, and free, or at leastuncontrolled, immigration). The consequence of open access is the tragedy ofthe commons, the disintegration of the national commonwealth, which iswelcomed by many in the questionable pursuit of an integrated global economy.In the absence of world government, however, such a global economy is not acommonwealth writ large, but a kind of global feudalism in which corporateindividualism has free reign.

More narrowly, social institutions such as legal systems, language, moralcodes, and monetary systems also constitute a kind of social wealth orcommonwealth, that is different from knowledge and nature, and that, likeknowledge, seem to be inherently non-rival. I would like to consider only one ofthese in closing, namely money.

Money, at first glance may seem to be rival, since if I have a dollar you cannotsimultaneously have it. Yet the only reason for having a dollar is to be able to giveit in exchange for something else, and so its value depends on the willingness ofeveryone to accept it in exchange and hold it at least temporarily. The more peopleuse a dollar, the more useful it is, and in that sense it is non-rival. We use moneywithout using it up. But is money a commonwealth? Indeed, is it wealth at all?It depends – if it is commodity money, then it circulates at its commodity value,and is a rival commodity that can be privately produced and owned, e.g. gold –then it is not really commonwealth. It is private wealth that serves a social function.However, token or fiat money is different. Its commodity value is nil (it has onlya trivial cost of production), but it circulates at an exchange value independent ofits commodity value. The amount of token money that people are willing tohold rather than exchange it for real commodities is the ‘virtual wealth’ of thecommunity. People are willing to hold token money balances to avoid theinconvenience of barter. They can convert their money balances into real wealth atany time, and thus reasonably count these balances as part of their personalwealth. Yet if everyone tried to convert their money balances into real wealth atonce it could not be done, because someone would have to end up holding themoney. Thus the aggregate of individuals in a community considers itself richerthan it really is by the amount of virtual wealth, which is equal to the exchangevalue of stocks of token money.

Although we all benefit from the convenience of money, the issuer of tokenmoney, the one who creates and first spends it, gets a transfer of real wealth fromthe rest of the community. He pays the negligible cost of production of tokenmoney, but receives the full exchange value when he spends it. Everyone else

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must give the full exchange value’s worth of something in exchange for money.The profit to the issuer of fiat money is called ‘seigniorage’ and really should bepublic income since it derives from the socially created commonwealth of tokenmoney.

Seigniorage used to accrue to the king. The privilege largely passed, not to theState, the legitimate heir of the king, but to the private banking sector via theinstitution of fractional reserve banking. Seigniorage on currency still goes to theGovernment, but that on demand deposits, over 95% of our money supply,goes to the commercial banks in the first instance, and is probably in large partcompeted away to the rest of the private sector (commercial banks’ customers).

One hundred percent reserves would eliminate the ability of the commercialbanks to create money, and put our money supply back under the control of thegovernment rather than the private banking sector. Money would be a truepublic utility, rather than the by-product of commercial lending and borrowingin pursuit of growth. Under the fractional reserve system the money supplyexpands during a boom, and contracts during a slump, reinforcing the cyclicaltendency of the economy. Demand deposits are loaned into existence at interest,and a new loan will only be taken if the project it finances is expected to grow ata rate greater than the interest rate. Therefore it would seem that under fractionalreserve banking, economic growth is required just to keep the money supplyfrom shrinking as old loans are repaid.

The seigniorage from creating and being the first to spend token moneywould, with 100% reserve requirements, accrue to the government rather thanthe private sector. It could be used for interest-free financing of public goods.The reserve requirement, something the Fed manipulates anyway, could be raisedgradually to 100%. Commercial banks would make their income by financialintermediation (lending savers’ money for them), and by service charges onchecking accounts, etc., rather than by lending money they simply create. Lendingonly pre-existing money that someone has actually saved brings about a greaterdiscipline in lending, and enforces the classical balance between marginal timepreference and marginal productivity of capital.

The two leading American economists of the 1920s, Irving Fisher3 of Yaleand Frank Knight4 of Chicago, both strongly advocated 100% reserves. Whythis issue disappeared from the policy agenda is an interesting question forhistorians of economic thought – if there are any left. And why there are so fewleft is another interesting question.

In sum – I argue that the commonwealth of nature should be enclosed asproperty, to the extent possible as public property, and administered so as tocapture scarcity rents for public revenue. The commonwealth of knowledge shouldbe freed from enclosure as property and be treated as the non-rival good that it is.

3 Fisher, I., (1935) 100% Money. An Adelphi Publication, New York.4 Knight, F., (1927) Review of wealth, virtual wealth, and debt. Saturday Review of Literature.

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A third category of commonwealth, the institutional, is here mentioned withthe example of the institution of fiat money and the suggestion of capturingseigniorage for public wealth through one hundred percent reserve requirements.These three policies establish basic directions in which to move. How fast weshould move in each direction is an important question that I have not attemptedto answer. However, the policies advocated in each case (fewer and shorter patentmonopolies; cap-and-trade plus ecological tax reform; and 100% reserverequirements) can all be imposed with varying speeds and to varying degrees. Wecan try them out a little at a time.

If what I have argued is even more or less correct, then I am faced with adifficult question. Why do so many neoclassical economists continue to teach, byand large, the opposite – namely, that nature is not really scarce; that knowledgemust be made scarce in order to increase it; and that our private banking institutionsmust create money out of nothing and lend it at interest as a necessary part of theeconomic order?

They may be right – I may be crazy. But crazy people should be easy to refute,shouldn’t they? So let’s see what happens!

The economy as a subsystemThe economy is a subsystem of the finite biosphere that supports it. When theeconomy’s expansion encroaches too much on its surrounding ecosystem, wewill begin to sacrifice natural capital (such as fish, minerals and fossil fuels) that isworth more than the man-made capital (such as roads, factories and appliances)added by the growth. We will then have what I call uneconomic growth, producing‘bads’ faster than goods – making us poorer, not richer. Once we pass theoptimal scale, growth becomes stupid in the short run and impossible to maintainin the long run. Evidence suggests that the US may already have entered theuneconomic growth phase. Recognizing and avoiding uneconomic growth arenot easy. One problem is that some people benefit from uneconomic growthand thus have no incentive for change. In addition, our national accounts do notregister the costs of growth for all to see. Humankind must make the transitionto a sustainable economy, one that takes heed of the inherent biophysical limitsof the global ecosystem so that it can continue to operate long into the future. Ifwe do not make that transition, we may be cursed not just with uneconomicgrowth but with an ecological catastrophe that would sharply lower livingstandards.

The economic parachuteTo judge from how gross domestic product (GDP) is discussed in the media,one would think that everything good flows from it. Yet GDP is not a measureof well-being or even of income. Rather it is a measure of overall economicactivity. It is defined as the annual market value of final goods and servicespurchased in a nation, plus all exports net of imports. ‘Final’ means that

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intermediate goods and services, those that are inputs to further production, areexcluded. GDP does not subtract either depreciation of man-made capital (suchas roads and factories) or depletion of natural capital (such as fish and fossilfuels). GDP also counts so-called defensive expenditures in the plus column.These expenditures are made to protect ourselves from the unwanted consequencesof the production and consumption of goods by others – for example, theexpense of cleaning up pollution. Defensive expenditures are like intermediatecosts of production, and therefore they should not be included as a part of GDP.Some economists argue for their inclusion because they improve both theeconomy and the environment. We can all get rich cleaning up one another’spollution! To go from GDP to a measure of sustainable well-being requiresmany more positive and negative adjustments. These adjustments includeuncounted household services (such as those performed for free by spouses);increased international debt; loss of well-being resulting from increasingconcentration of income (the well-being induced by an extra dollar for the pooris greater than that for the rich); long-term environmental damage such as ozonelayer depletion or loss of wetlands and estuaries; and water, air and noise pollution.When all these adjustments are made, the result is the index of sustainableeconomic welfare (ISEW), as developed by Clifford W. Cobb and John B. Cobb,Jr, and related measures. These indices have been used by ecological economistsbut are largely ignored by others in the field. For the US, it appears that, beginningin the 1980s, the negative factors in the ISEW have been increasing faster than thepositive ones. Similar results have been found for the UK, Austria, Germanyand Sweden. In other words, for some countries in recent years, the costs ofgrowth are rising faster than the benefits. As important as empirical measurementis, it is worth remembering that when one jumps out of an airplane, a parachuteis more beneficial than an altimeter. First principles make it abundantly clear thatwe need an economic parachute. Casual empiricism makes it clear that we need itsooner rather than later. More precise information, though not to be disdained,is not necessary, and waiting for it may prove very costly.

This book deals with all these things. It is important to highlight that EnzoTiezzi and the members of his staff are physical chemists. Some years ago, Idedicated Enzo a booklet of mine on Frederick Soddy, Nobel Prize in Chemistryin 1921, and I wrote: to Enzo Tiezzi, the Frederick Soddy of the 21st century.

Soddy played a fundamental role for a two reasons:a) in 1920, he acknowledged the importance of the laws ofthermodynamics in economicsb) he guessed that money drives us to confuse the symbol withreal wealth: the former can grow indefinitely within mathematicaltheories of economic growth; the latter follows physical laws thatdetermine constraints and dimensions.

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H. Daly, 2008