Abstract
The common approach to integrating thermodynamics and economics is subsuming thermodynamic aspects among the set of constraints under which economic activity takes place. The causal link between energy and growth is investigated via aggregate econometric analysis. This paper discusses methodological issues of aggregate analysis and proposes an alternative framework based on recent developments in philosophy of science, in particular of the life sciences. “Constitutive explanations” eschew the covering law approach to scientific explanation and concentrate on the identification of multi-level architectures of causal mechanisms that generate phenomena. This methodology has been productively employed to organize cross-disciplinary research, and I suggest that it can also provide a framework for integrating thermodynamics and economics, since this also requires the combination of several scientific disciplines. I present the example of the “rebound effect” as a kind of constitutive explanation and put it in the context of urbanization as a complex mechanism that is the defining feature of economic growth in physical terms.
Highlights
Towards an “Economics of the Anthropocene”Whether thermodynamics is essential for the analysis of economic processes is a question that deeply divides Ecological Economics and so-called “mainstream economics” [1,2]
If we look at the current status of Ecological Economics, the majority of research contributions converges increasingly with mainstream economics, in the sense of applying standard economic models and methods of quantitative analysis [3]
I develop an alternative, but complementary view: I argue that the thermodynamics perspective has been weakly grounded in philosophy of science and methodology, and that this is mostly responsible for the slow integration of thermodynamic reasoning into economics
Summary
Whether thermodynamics is essential for the analysis of economic processes is a question that deeply divides Ecological Economics and so-called “mainstream economics” [1,2]. Thermodynamics does provide a rationale for the constraints under which growth operates, but provides the foundations for understanding the causal processes that drive growth (for a related view, [10]) This insight can be reaped if we adopt the methodology of “constitutive explanations”. Whereas the economic perspective on energy as constraint suggests that the specific forms of the energy-growth link are reflecting human design, I argue that the machinery that connects energy and growth is beyond human design, manifesting the interplay of complex evolutionary processes on different levels that are covered by different disciplines, such as physics, biology or economics, which need to be integrated in a constitutive explanations framework. Appropriate approach to understanding the energy–growth link, beginning with defining pertinent measurement approaches
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