ENVIRONMENTAL AND THERMODYNAMIC INDICATORS IN SUPPORT OF FAIR AND SUSTAINABLE POLICY MAKING

Investigating equitable trade among Latvia, Denmark and Italy

Sergio Ulgiati, University of Siena, ItalyCatia Cialani, University of Foggia, Italy

2nd International Conference onINTEGRATIVE APPROACHES TOWARDS SUSTAINABILITY

Riga, Latvia, May 11 - 14, 2005

In this lecture we will:

Explore the role of environmental support in the economic performance of a Nation

Explore the potentiality of the emergy approach in assessing such a performance

Use the emergy approach for an assessment of trade among Latvia, Denmark and Italy

Investigate options for implementing trade balance and equity among Nations

Let’s start from Mineral Mining and Trading

Source: Payal Sampat, Scrapping Mining Dependence. In: The State of the World, 2003, The World Watch Institute. Pp. 110-135.

The Point of View of the Economy: Metals and Minerals Price Index, 1960-2001

Mineral Dependence and Poverty RatesSelected Countries, 1990s

Money

Resources

Where does wealth come from…?

Average Price of Exports

Terms of Trade = ----------------------------------------

Average Price of Imports

Exports: The sale of goods, services and energygoods, services and energy to buyers from other countries leading to an inflow of currency to the country

Imports: The purchase of goods, services and energygoods, services and energy from abroad that leads to an outflow of currency from a country

The Terms of Trade looks at the relationship between the money received for exports and the money paid for imports

The Terms of Trade

SELECTED YEARS

2002200019951991 1989

0.97 1.12 1.031.010.97EXPORTS/

IMPORTS

Term

of

trade

SELECTED YEARS

2002200019951991 1989

0.97 1.12 1.031.010.97EXPORTS/

IMPORTS

Term

of

trade

The Italian Terms of Trade

Everything in the biosphere is the product of a continuous self-organization activity, in which resources are degraded, cycled, and transformed via processes driven by solar energy, deep heat and gravitational potential.

Environmental supportEnvironmental support

At each transformation step some energy is degraded and some is passed to the next step in the chain.

The energy chain…

The 20th century energy food chain…

Techno-humans…

(Courtesy of Mark T. Brown, 2004)

MATERIAL INTENSITY is the overall material input which humans move, divert or extract to make a product or provide a service (Wuppertal)

ECOLOGICAL FOOTPRINT is the amount of appropriate productivity, expressed in hectares that is needed to sustain a given process or population

(Wackernagel and Reese)

EMERGY is a measure of the global environmental support to a system, expressed in unit of solar equivalent energy (seJ) (H. T. Odum)

Environmental Accounting methods

InputEmergy

A Output Emergy = A + B + C

TransformationProcess

InputEmergy

BInput

EmergyC

InputEmergy

A Output Emergy = A + B + C

TransformationProcess

InputEmergy

BInput

EmergyC

EMERGYEMERGY - The available energy (of one form, usually solar) required directly and indirectly to make something (seJ)

Emergy Definition

InputEmergy

A Output Emergy = A + B + C

TransformationProcess

InputEmergy

BInput

EmergyC

InputEmergy

A Output Emergy = A + B + C

TransformationProcess

InputEmergy

BInput

EmergyC

Output = Joules or grams

Emergy Intensity =

Emergy support

Output (Joules or grams)

Emergy Intensity

The amount of emergy required to produce a given amount of mass or energy of a product(seJ/J; seJ/g; seJ/€)

Emergy Emergy Based Based Indicators.Indicators.

Signatures

0.00E+00

5.00E+14

1.00E+15

1.50E+15

2.00E+15

2.50E+15

SunW

ind

Rain

(che

m. p

ot.)

Rain

(geop

h. P

ot.)

Tide

Wav

es

Deep

heat

Surfa

ce ru

nin

(che

m. ..

.

Groun

d wate

r

Tops

oil

prop

agule

s

Nitrog

en

Phosp

hate

Potas

sium

Foss

il fue

ls

Electr

icity

Goods

and

Mach

in.

Labo

r and

Ser

vices

Em

erg

y p

er

Ha

pe

r y

r [s

eJ

/(H

a*y

r)]

0.00E+005.00E+141.00E+151.50E+152.00E+152.50E+153.00E+153.50E+15

SunW

ind

Rain

(che

m. p

ot.)

Rain

(geop

h. P

ot.)

Tide

Wav

es

Deep

heat

Surfa

ce ru

nin

(che

m. ..

.

Groun

d wate

r

Tops

oil

prop

agule

s

Nitrog

en

Phosp

hate

Potas

sium

Pestic

ides

Foss

il fue

ls

Electr

icity

Goods

and

Mach

in.

Labo

r and

Ser

vices

Em

erg

y p

er

Ha

pe

r y

r [s

eJ

/(H

a*y

r)]

Signature of driving emergies for 1 hectare of corn in Florida (Brandt-Williams, 2002)

Signature of driving emergies for 1 hectare of Florida mangrove ecosystem (Brown and Bardi, 2001)

Local Non- renewable sources

EnvironmentalSystems

Economic Use

N LocalRenewable Sources

R

Purchased Resources

Services

Yield

F

Y

Yield (Y) = R+N+FEmergy Yield Ratio = Y/FEmergy Investment Ratio = F/(R+N)Environmental Loading Ratio = (F+N)/REmpower Density = (R+N+F)/area

Openness, environmental loading, density,...

InputEmergy

A

InputEmergy

B

InputEmergy

C

Total Emergy Input= 10.8 E 24 sej/yr

Production Consumption$

$

People

Gross Domestic Product10.4 E12 $

Total Emergy = 10.8 E24 sej/ yr = 1.0 E12 sej/ $ GDP 10.4 E12 $/yr

InputEmergy

A

InputEmergy

B

InputEmergy

C

Total Emergy Input= 10.8 E 24 sej/yr

Production Consumption$

$

People

Gross Domestic Product10.4 E12 $

Total Emergy = 10.8 E24 sej/ yr = 1.0 E12 sej/ $ GDP 10.4 E12 $/yr

Emergy and Money

3.48 E+24 seJ/yr (Italy, 2002)

1.44 E+12 $/yr

2.42 E+24 seJ/$3.48 E+24 seJ/yr-----------------------1.44 E+12 $/yr

Environmental - Economic Interface SystemEnvironmental - Economic Interface System

Wealth comes from resources, not from money

Structure of an emergy table

1 2 3 4 5 6 Note Item Data Units Emergy intensity Solar Emergy (sej/unit) (E+15 sej/yr) 1. First item xx.x g or J/yr xxx.x xxx.x 2. Second item xx.x g or J/yr xxx.x xxx.x .. .. n. nth item xx.x g or J/yr xxx.x xxx.x

O. Output xx.xx g or g/yr xxx.x Emn

1

Energy Systems Diagram of Italy

Emergy Evaluation of Italy 2002

Table 1. EMERGY FLOWS SUPPORTING THE SYSTEM OF ITALIAN SOCIETY IN THE YEAR 2002

Amount Solar Ref. Solar # Item Unit (unit/yr) transformity for Emergy

(sej/unit) Transf. (sej/yr)

(All flows are evaluated on a yearly basis. Numbers in the first column refer to calculation procedures in the Appendix) Renewable inputs

1 Sunlight J/yr 1.67E+21 1 [a] 1.67E+21 2 Wind (kinetic energy) J/yr 2.65E+18 1500 [b] 3.97E+21 3 Waves (kinetic energy) J/yr 2.91E+18 30550 [b] 8.89E+22 4 Tides (geopotential energy) J/yr 3.65E+16 16842 [b] 6.15E+20 5 Earth cycle (thermal energy) J/yr 9.04E+17 34377 [b] 3.11E+22 6 Rain (chemical potential energy) J/yr 7.95E+17 18199 [b] 1.45E+22 7 Rain (geopotential energy) J/yr 3.76E+17 10488 [b] 3.95E+21

Nonrenewable inputs from within the country 9 Oil J/yr 2.26E+17 5.30E+04 [b] 1.20E+22

10 Coal J/yr 0.00E+00 3.98E+04 [b] 0.00E+00 11 Natural Gas J/yr 5.85E+17 5.22E+04 [i] 3.05E+22 12 Feldspar g/yr 3.16E+12 1.00E+09 [b] 3.16E+21 13 Marl for cement g/yr 1.36E+13 1.00E+09 [b] 1.36E+22 14 Potash, marine salts and salt rock g/yr 3.34E+12 1.00E+09 [b] 3.34E+21 15 Pozzolan g/yr 2.03E+10 1.00E+09 [b] 2.03E+19 16 Silica sand g/yr 1.34E+12 1.00E+09 [b] 1.34E+21 17 Other sand and gravel g/yr 1.91E+14 1.00E+09 [b] 1.91E+23 18 Marble in blocks g/yr 5.70E+12 1.45E+09 [b] 8.27E+21 19 Granite g/yr 2.13E+12 5.00E+08 [b] 1.06E+21 20 Sandstone g/yr 7.87E+12 1.00E+09 [b] 7.87E+21 21 Limestone g/yr 6.44E+13 1.00E+09 [b] 6.44E+22 22 Net loss of topsoil J/yr 1.23E+17 62500 [c] 7.67E+21

Emergy Use within the country

1989 1.21E+23 10%

3.57E+23 28%

7.89E+23 62%

1995

1.01E+24 62%

4.78E+2330%

1.21E+23 8%

2002

1.64E+24 77%

3.48E+23 17%

1.21E+23 6%

Renewable sources used (sej/yr) (R)

Nonrenewable indigenous sources (sej/yr) (N)

Imported emergy (sej/yr) (F)

1984

5.37E+23 56%

3.00E+23 31%

1.21E+23 13%

Break-down of Imports

1995

5.08E+23 55%

3.48E+23 37%

3.55E+22 4%4.04E+22

4%

1989

3.60E+23 47%

3.53E+23 47%

6.00E+21 1%

3.72E+22 5%

2002

4.13E+23 46%

4.45E+23 49%

1.76E+22 2%

3.03E+22 3%

fuels and electricitynon metallic mineralsmetallic mineralsImported goods (exc.fuels&miner.)

2000

3,79E+23 46%

3,74E+23 45%

4,04E+22 5%

3,55E+22 4%

Emergy signature of Italy, 2002

0.00E+00

2.00E+03

4.00E+03

6.00E+03

8.00E+03

1.00E+04

1.20E+04

1.40E+04

Sunl

ight

Win

d

Rai

n, c

hem

pot

Rai

n ge

opot

Tide

Dee

p he

at

Nat

ural

gas Oil

Coa

l

Min

eral

s

Tops

oil

Impo

rts

Tour

ism

Em

erg

y (E

+20

seJ

/yr)

Emergy Evaluation of Latvia, 2002

Note Item Raw amount Unit

Transformity

Solar Emergy

Economic product of

emergy flow

(sej/unit) (E20

sej) (E5 Em$) RENEWABLE RESOURCES

1 Sunlight 3.04E+20 J 1 3.04 680.70 2 Rain, chemical potential 2.62E+17 J 30574 80.22 17944.22 3 Rain, geopotential 1.37E+17 J 46828 64.24 14369.84 4 Wind, kinetic energy 3.67E+18 J 2513 92.27 20639.96 5 Waves 9.86E+16 J 51324 50.62 11322.76 6 Tide 1.03E+17 J 28295 29.06 6499.94 7 Earth Cycle 9.37E+16 J 5.77E+04 54.09 12099.56

NONRENEWABLE SOURCES FROM WITHIN 8 Coal 1.34E+15 J 6.72E+04 0.90 201.37 9 Dolomite 2.19E+06 g 1.68E+09 0.00 0.01

10 Clay 8.25E+07 g 1.68E+09 0.00 0.31 11 Sand 3.26E+06 g 1.68E+09 0.00 0.01 12 Gypsum 1.23E+06 g 1.68E+09 0.00 0.00 13 Limestone 3.03E+08 g 1.68E+09 0.01 1.14 14 Peat 1.11E+15 J 1.68E+04 0.19 41.55 15 Top Soil 8.66E+14 J 1.24E+05 1.08 240.92

PRODUCTION SECTORS BASED ON INDIGENOUS RESOURCES 40 Hydroelectricity 7.09E+15 J 2.77E+05 19.66 4398.61 41 Agricultural Production 2.99E+16 J 3.36E+05 100.59 22502.55 42 Livestock Production 2.65E+14 J 3.36E+06 8.90 1991.63 43 Fisheries Production 5.72E+14 J 3.36E+06 19.23 4301.91 44 Fuelwood Production 7.74E+16 J 3.14E+04 24.32 5439.73

Imports-Exports

of Latvia, 2002

Note Item Raw amount Unit

Transformity

Solar Emergy

Economic product of

emergy flow

(sej/unit) (E20

sej) (E5 Em$) IMPORTS AND OUTSIDE SOURCES

16 Oil derived products 5.71E+16 J 1.11E+05 63.33 14166.41 17 Natural Gas 5.34E+16 J 8.77E+04 46.83 10476.97 18 Coal 1.85E+15 J 6.69E+04 1.24 277.31 19 Metals 6.49E+11 g 3.02E+09 19.61 4387.61 20 Food & agricultural products 1.83E+15 J 3.36E+05 6.15 1376.87 21 Livestock, meat, fish 3.20E+14 J 3.36E+06 10.76 2407.55 22 Plastics 9.98E+10 J 1.11E+05 0.00 0.02 23 Chemicals 1.16E+11 g 6.38E+08 0.74 165.95 24 Paper 1.39E+11 g 6.38E+06 0.01 1.99 25 Textiles 7.33E+09 g 6.38E+06 0.00 0.10

26 Mechanical & transport equipment 8.01E+10 g 1.13E+10 9.01 2016.11

27 Services in imports 7.08E+08 $ 3.11E+12 22.00 4922.43 28 Tourism 1.61E+08 $ 3.11E+12 5.00 1119.37

EXPORTS 29 Food & agricultural products 2.43E+15 J 3.36E+05 8.18 1829.90 30 Livestock, meat, fish 1.14E+14 J 3.36E+06 3.84 859.77 31 Wood 4.83E+16 J 5.86E+04 28.29 6328.63 32 Paper and paperboard 3.51E+10 g 6.38E+08 0.22 50.10 33 Textiles 1.42E+10 g 6.38E+06 0.00 0.20 34 Peat 7.55E+14 J 1.68E+04 0.13 28.37 35 Metals 6.78E+11 g 1.68E+09 11.40 2549.50 36 Chemicals 1.66E+10 g 6.38E+08 0.11 23.76

37 Mechanical & transport equipment 2.76E+10 g 1.13E+10 3.10 694.51

38 Plastics & rubber 4.94E+14 J 1.11E+05 0.55 122.61 39 Services in exports 1.25E+09 $ 4.47E+12 55.97 12520.00

Emergy Signature of Latvia, 2002

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

100.00

Sunl

ight

Win

d

Rai

n, c

hem

pot

Rai

n ge

opot

Tide

Dee

p he

at

Fish

erie

s

Woo

d

Peat

Nat

ural

gas Oil

Tops

oil

Impo

rts

Tour

ism

Em

erg

y (E

+20

seJ/

yr)

Large dependence on:a) local renewable

inputsb) comparable

amounts of imported fossil fuels and commodities other than fuels.

Emergy Signature of Denmark, 2002

0.00

200.00

400.00

600.00

800.00

1000.00

1200.00

1400.00

1600.00

Sunl

ight

Win

d

Rai

n, c

hem

pot

Rai

n ge

opot

Tide

Dee

p he

at

Fish

erie

s

Woo

d

Nat

ural

gas Oil

Tops

oil

Impo

rts

Tour

ism

Em

erg

y (E

+20

seJ

/yr)

Large dependence on:

a) fossil fuels (local and imported)

b) imports of goods and commodities

other than fuels.

Emergy-based terms of trade

Total money paid

Commodities to importing country (g or J)

Money from importing to exporting country (€, $)

Emergy benefit to buyer = Emergy of traded products

Emergy of money paid

Emergy Benefit to Purchaser...Emergy Benefit to Purchaser...

Oil trade to Italy

Price= $ 55/barrel

$ 55

(6.9 E+09 J/bbl)(9.07 E+4 seJ/J)

($ 55/bbl)(2.42 E+12 seJ/$)4.70

Emergy Evaluation of Trade among countries, 2002

Latvia

DenmarkItaly

1 $

1 $

1 $

4.47

4.471.89

1.89

2.42

2.42

Total imports

(g)

Energy Flow (J)

Transformity (seJ/unit)

Emergy of product

(seJ)

Monetary value (US $)

Emergy of money paid

(seJ)

Emergy Exchange

Ratio

ITALY's imports from Latvia and Denmark (2002)Imports from Latvia

Wood 9.39E+09 1.42E+14 8.85E+04 1.25E+19 3.90E+06 9.44E+18 1.33Cereals (mainly wheat) 1.49E+10 3.12E+14 1.14E+05 3.56E+19 2.49E+06 6.01E+18 5.92Peat 4.92E+10 5.15E+14 1.87E+05 9.63E+19 5.37E+06 1.30E+19 7.41Imports from Denmark

Wood 7.50E+08 1.13E+13 2.30E+05 2.60E+18 1.51E+06 3.66E+18 0.71Cereals (mainly rice) 2.35E+06 4.91E+10 9.00E+04 4.42E+15 2.51E+03 6.06E+15 0.73Peat 7.61E+09 7.96E+13 1.87E+05 1.49E+19 1.64E+06 3.98E+18 3.74DENMARK's imports from Italy and Latvia (2002)Imports from Italy

Pasta 2.20E+10 4.61E+14 4.00E+05 1.84E+20 1.83E+07 3.36E+19 5.49Wine and liquors 3.83E+10 1.34E+14 4.20E+05 5.63E+19 7.91E+07 1.45E+20 0.39Imports from Latvia

Textiles 8.70E+08 1.38E+13 3.25E+06 4.48E+19 1.71E+07 3.14E+19 1.43Plastics and rubber 8.25E+06 2.42E+11 1.33E+06 3.22E+17 2.84E+05 5.23E+17 0.61LATVIA's imports from Italy and Denmark (2002)Imports from Italy

Pasta 3.79E+09 7.93E+13 4.00E+05 3.17E+19 2.17E+06 9.69E+18 3.27Wine and liquors 1.45E+09 5.09E+12 4.20E+05 2.14E+18 3.26E+06 1.46E+19 0.15Imports from Denmark

Textiles 1.15E+09 1.82E+13 3.25E+06 5.90E+19 1.24E+07 5.56E+19 1.06Iron and steel 5.42E+05 5.46E+09 2.96E+15 2.56E+03 1.14E+16 0.26

Emergy evaluation of trade for selected products exchanged by Italy, Denmark and Latvia in the year 2002.

Trade of selected products

2) Prices of commodities are unlikely to reflect equity of trade.

3) Trade equity requires:

1 ) Emergy should be used to help assessing and implementing fair trade

Very difficult

Possible

Prices of primary resources exported to be much higher than the present ones

Raw materials to be processed into final products at home and final product exported at higher price

Desirable

Increased international cooperation for:

Updated and reliable databases on resource exchange

Equitable Trade

Know how transfer,…etc…

Conclusions

Equity of International Resource Exchange

“Trade and projects that unbalance local economies…and increase emergy inequity between countries, do not maximize the world economy, because they leave major sectors of the world's population in poverty, essentially outside the world economy. This pattern wastes resources into luxury and excess of the developed countries, diverting resources that used to go directly to population support (without payments)…

…This pattern is not sustainable, does not maximize world wealth and emergy, does not reinforce world production, and will not last. These patterns will become discredited as world opinion changes, as revolutions occur, and worldwide resource depletion soon cuts off the largesse of the overdeveloped countries." (H.T. Odum, 1994)

Thanks you for your attention