economics, thermodynamics and biorenewable resources dr. robert anex agricultural & biosystems...
TRANSCRIPT
Economics, Thermodynamics and Biorenewable Resources
Dr. Robert AnexAgricultural & Biosystems Engineering
Iowa State University
June 8, 2004
Workshop on theEconomic and Environmental Impacts of Bio-based Production
Outline
• Neoclassical economics • Sustainability economics• A brief history of biobased economy• Sustainability and bio-based production• Research directions• Conclusions
Neoclassical Economics 101
• Utility maximization versus preference satisfaction
• Heuristics and biases• Potential Pareto Optimality and
economic efficiency• Ethical conflicts
“Do you have anything better?” - Robert Reed
Market Failures• Non-market goods
– Environmental services– Basic Research– National Security
• Sustainability (one of three legs)– Long-term impacts– Technical substitution potential
to offset social, environmental &
resource depletion– ‘Weak’ versus ‘Strong’ sustainability
Economic Justification for Regulation
Rationales for Limited Substitution
• Finite environmental sink capacity• Bounded rationality• Thermodynamic limits to production
– minimum energy and material requirements
– entropic dissipation– shadow price of dissipation?– finite renewable energy potential
Biobased Economies of the Past
Mesopotamia
Carthage
Rome
Breaking the Cycle
Decoupling Primary Industrial Productivity from Biomass Production
Back to the Past?
1853
Kerosene first distilled from oil
First oil company formed
1912
“…the use of vegetable oils for engine fuels may seem insignificant today, but such oils may become, in the course of time, as important as petroleum and the coal- tar products of the present time.” - Rudolf Diesel -
1898
Paris World’s Fair - diesel engine run on peanut oil
Standard Oil monopoly broken
1868
Back to the Past?
1926 19501935
“ … build a vehicle, affordable to the working family, powered by fuel that would boost the rural farm economy.” - Henry Ford -
Declaration of Dependence Upon the Soil
1977
First U.S. Energy Crisis invigorates bioenergy development efforts
1980s
Biomass GrowthAgricultureSilvicultureAquaculture
Harvest, pre-process, transport
Processing- thermal- chemical- physical- biological
Distribution & Sales
Use
End-of-Life- combustion- composting- landfill
Biobased Product Life Cycle
A Biobased Product System
Agricultural Sustainability
Some factors to think about:• Soil availability and quality• Input efficiency (water, nutrients, …)• Photosynthetic efficiency• Harvest index• Intensity of management• Postharvest storage, processing, and
distribution losses• Societal transformations
Life Cycle Assessment Procedure
LCA is a technique for assessing the environmental aspects and potential impacts associated with a product.
Direct Applications
• Product development and improvement
• Strategic planning
• Public policy making
• Marketing
From ISO14040-1997, Environmental management-- Life cycle assessment-- Principles and framework
Goal andScope
InventoryAnaylsis
ImpactAssessment
Interpretation
Typical Output: Climate Change Potential
Fertilizer/Ag ChemicalProduction and Transportation
Corn Farming
Corn Transportation
Corn Wet Mill
Production of 1,3 Propanediol
kg CO2 eq/kg PDO
N2O CH4 CO2
Impact of climate change on agricultural productivity?Impact of climate change on agricultural productivity?
Some Measures of Strong Sustainability
• Energy return on investment
• Ecological footprint
– net primary production
• Sustainability gaps
– critical stocks
– limiting environmental factors (e.g., CO2)
What We Don’t Yet Know
We know more about the movement of the celestial bodies than about the soil underfoot.
LEONARDO DA VINCI
What We Don’t Yet Know (partial list)
• Soil Fertility• Water Quality• Climate Change Impacts• Resource Sufficiency• Economic Impacts• Social Impacts
They’re makin’ more people every day but They’re makin’ more people every day but they ain’t makin’ any more dirt.they ain’t makin’ any more dirt. – Will – Will Rogers -Rogers -
Further Expanding the System Boundaries
Biotechnology Debate isValue-Driven by Stakeholders
• Impact Assessment is a value-driven process.– Risk has uniquely local & social
characteristics– Risks are not additive across
endpoints
• LCA should be an analytic-deliberative process and serve as a vehicle for building consensus
Basis for Regulation (e.g., Promotion)
• Possible benefits:– Environmental– Economic– Social
• Bioproduction will have long-term (possibly irreversible) impacts that are poorly understood:– Soil fertility– Climate change– Agricultural capacity
Conclusions
• Biobased production on a limited scale may help reach certain environmental, social and political objectives but will have little impact on sustainability
• There is still much we do not know about the implications of a transition to large-scale bioproduction and new tools are needed
• We must seek answers before making large, irreversible investments that lock-in technology choices (a unique opportunity)
Journal of
Industrial EcologySpecial Issue on Biobased Products
Available from MIT Press
Available freefree via theinternet at:http://mitpress.mit.edu/jie/bio-based