How to Do Biophysical Economics

Abstract

It seems imperative that we as individuals who care about the human condition in the poorer parts of the word and about nature must create a new way to undertake what is usually called developmental economics, usually seen as the application of economic principles to less-developed nations. Our reasons include: dissatisfaction with the intellectual foundations of conventional economic models used in development and with the results that have occurred with their use, the general sense of many development economists themselves that conventional economics has failed, the need to do something that will work, the concern that most knowledgeable people have that the future, and especially the future of most developing nations, will be much more constrained by the “end of cheap oil,” and the need to protect whatever nature is left. We generate the “alpha version” of such a model in this chapter, summarizing certain useful approaches and successes of the past, and using a biophysical basis try to generate a synthesis to help the reader. We are not foolish enough to believe that we can in one fell swoop cure all the economic problems that generations of traditional economists have not been able to, but we believe that we do provide a useful basis here for beginning that process and for generating useful results now for field workers. Although our focus here is on developing nations the concepts are applicable anywhere.