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Trophic Economics
V.2 December 2013
Victor G. Martinez
Doctoral candidate Northumbria University
Contents:
1.- Term origin.
2.- A biophysical approach.
3.- Energy, exergy, emergy and entropy.
4.- Alternative macroeconomics: Ecological Economics.
5.- Trophic Economics.
6.- Trophic models.
7.- Conclusions and further work.
Abstract
There are important omissions in macroeconomics regarding the relation it has
with the system where it operates, these can be explained thoroughly by the laws of
thermodynamics which help us understand phenomena all across the universe and
which humans can’t be an exception. In order to gain better understanding of the
relevance to move towards new models of size and distribution of businesses and to
help designers and entrepreneurs to come up with creative alternatives Trophec
Economics and the Trophic Models are here presented, this is an ongoing research
part of the online software TROPHEC.
Term origin
The word ‘Trophic’ has its origins in the Greek word τροφή (trophē), which
meaning is feeding or nurturing.
In biology it is used to describe the level that an organism occupies in a food
chain or ‘Trophic Level’, there are three main levels:
1.- Producers (autotrophs) typically plants and algae, these organisms don’t find
their food source in other organisms, they use nutrients from the soil or ocean and
produce their own food through photosynthesis.
2.- Consumers (heterotrophs) animals, which can’t produce their own source of
food and consume other organisms, they are subdivided in three types according to the
organisms they consume: herbivores (eat only plants), carnivores (eat other animals)
and omnivores (eat both animals and plants).
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3.- Decomposers (detritivores) fundamental organisms that break down dead
plant, dead animals and waste, and releases it back into the ecosystem as nutrients
(original compounds) to be used again by plants. These organisms are bacteria, some
insects and fungi mainly.
The linkage between Trophic Levels and economics was first made in fisheries,
the earliest scientific reference found is Ney (Ney, 1990).
In his study Ney describes relevant points for fisheries to be managed in a
sustainable way, from biology point of view 2 main issues can be indentified to achieve
balance:
- Determination of source supply: which food type will be used, if the ‘prey’
selected is appropriate for the ‘predator’ in terms of the biomass available and energy
embedded capable to be transferred into the ‘predator’. In terms of biomass is noted
that not only the total amount is to be studied but also the reproduction rate and
maturity growth of preys.
- Assessment of viability: Ney defines 3 conditions for ‘successful feeding’ that
must be sequentially met:
1.- Distributional availability: predator and prey must occur in the same place at
the same time.
2.- Behavioural availability: prey must be recognised as a potential meal and be
catchable by predator.
3.- Morphological availability: prey must be physically ingestible by its captor.
Finally the magnitude of influence of these three conditions varies with predator,
prey and the system containing them.
Therefore prey distribution patterns, reproduction regulation and predator
consumption manifested in growth, metabolism and waste are key factors for
successful feeding.
A biophysical approach
In 2010 the United Nations Environmental Program produced the report ‘The
Economics of Ecosystems and Biodiversity (UNEP, 2010) the concept behind it was to:
“show how economic concepts and tools can help equip society with the means to
incorporate the values of nature into decision making at all levels”.
In it was identified two different approaches for the estimation of nature’s
values: a preference-base and a biophysical-base; the former makes use of
neoclassical economics, market theory and political science, and the latter in resilience
theory and thermodynamics. This last one makes use of knowledge regarding universal
principles of matter and energy transfer.
The undeniable fact that Earth is a closed system and that all resources humans
(and any other species) use for their development are or finite or linked to a population
number and reproduction rate of other living species, was the main factor to select the
biophysical approach as the most coherent base ground to search for a sustainable
model of economy.
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Thermodynamic laws dictate all matter and energy exchanges. In order to
understand deeper the organisation of Trophic Levels a distinction must be made
between the number of organisms, their biomass, reproduction rate and the energy
they use and they have available for the next Trophic Level.
In figure 1 are exposed the ‘Trophic Pyramids’. They are a helpful way to
visualise the sustainability of the system (or the stability of a given community).
Fig 1. Trophic Pyramids, left column sustainable systems, right not sustainable systems.
If it was decided to account Trophic Levels by their population number, some
ecosystems will show a greater quantity of consumers than producers, which could be
translated into a non sustainable community; if the same is accounted by biomass the
same can happen: a forest community has a low number of producers, but their
biomass is by large greater that the one of the consumers; nevertheless it is not the
case of an aquatic community in which producer’s biomass is very low (phytoplankton)
but their reproduction rate is quite high.
Therefore the most accurate method to determine the stability in any given
community is through the accounting of the energy available for the next level.
Producers make great quantities of energy, from which some is used by themselves
(growth and metabolism), other is available for the next Trophic Level (exergy) and other
is simply lost (entropy). In this way can be distinguished gross primary productivity and
net primary productivity of any Trophic Level.
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Energy, exergy, emergy and entropy
In order to identify clearly what is happening with the energy being transferred
between levels we need to use different terminologies:
Energy: defining energy is a complex task, for our purposes we can simply say
that it is the capacity to perform work.
Exergy: is the amount of energy available to be used.
Emergy: is the total amount of exergy used up in all transformations to make
something (directly or indirectly).
Entropy: also complex to define, again for our goal we can state that is the
energy lost in every transformation or exchange (2nd law of thermodynamics).
Fig. 2 Energy flow through the Trophic Levels
In figure 2 it is displayed a simplified example of the energy flow and its different
classifications; can be deducted as well how, when an organism requires more
transformations to be created, the higher the emergy embedded and entropy
generated.
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Alternative macroeconomics: Ecological Economics
Our current macroeconomic model has been questioned since its conception,
one of the first and more renowned is Thomas Malthus; in the 18th century there was a
popular believe that mankind could improve limitlessly and Malthus concerned about
the linkage between that improvement and the consumption of natural resources, and
saw endless population growth as a great danger. His work influenced highly relevant
figures like Darwin, Keynes and Marx among many others.
The most widely used method for measuring economic progress is the Gross
Domestic Product (GDP). It’s creator, Simon Kuznets stated in the US congress in
1934 “the welfare of a nation can scarcely be inferred from a measure of national
income” (Kuznets, 1934). One definition of GPD is: “the sum of all value added to raw
materials by labour and capital at each stage of production, during a given year” (Daly &
Farley, 2004). From this definition it can be inferred that the more efficient labour is, the
less capital is needed and more added value can be achieved. This principle drives
technological improvements, and underpins a continuous search for efficiency; which in
turn creates another complex linkage with the balance of unemployment (Jackson,
2009). In order to keep people employed and avoid social collapse more products must
be created and economies should always seek growth.
This trend is well defined by Jevons’ paradox (Jevons, 1865), where
technological efficiency instead of easing pressure on the planet and people, creates
more demand, consumption and dependency. The way we design, build and use
products, and even keep social cohesion is based on a constant structural need for
avoiding collapse, fed by positive feedback loops that only increase its negative
impacts.
This model for economic growth ignores one crucial objective: bringing
wellbeing to people. A strong evidence of this can be found in the relationship between
the Human Development Index and GDP per capita; figure 3 shows that after a certain
level of income is achieved, little or no improvement on human development can be
seen. This figure also clearly shows a more dense area in low-income countries and
hence illustrates an unevenness that the current macroeconomic system has been
unable to beat down (UNDP, 2011).
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Fig. 3. 167 countries’ GDP per capita as horizontal axis and Human
Development Index as vertical axis. (In colour the GINI index (equality in economic
distribution) and different shape for each continent)
From all these considerations some economists have frequently raised the
question: what size the economy should be? If it is accepted that macroeconomics is
not an isolated system but a subsystem dependant on the Earth’s ecosystem services
(Daly, 1991) it is physically impossible to sustain perennial growth within the current
model (Daly & Farley, 2004; Georgescu-Roegen, 1971; Latouche, 2009; Meadows,
2004). With this idea present, size and distribution of businesses become key to
achieve long term sustainability as well as to empower local development, biodiversity
protection and thus a more equitable human development.
The works of Georgescu-Roegen (Georgescu-Roegen, 1971) and Schumacher
(Schumacher, 1974) conceptually conceived Ecological Economics in the second half
of the 20th century. The former clearly identified the “connection between low entropy
and economic value”. The linkage to thermodynamics and its universal laws gave rise to
a multidisciplinary approach; recognised contributors are the ecologist H.T. Odum with
his emergy calculation method of economic value (Odum, 1996) and Robert Constanza
and his important contribution on calculation of value of ecosystem services and natural
capital (Constanza et al., 1997), economist H. Daly with his highly controversial “steadystate economics” (Daly, 1992) plus many other biologist, physicists and even
geographers.
In his book Ecological Economics, principles and applications (Daly & Farley, 2004)
Daly states: ‘The common denominator of all usefulness, consist of low-entropy matterenergy. Technological knowledge helps us use low entropy more efficiently; it does not
enable us to eliminate or reverse the direction of metabolic flow’. In an account of a
conference held at the University of Vermont in 2003, published in (GundInstitute, 2011),
Daly describes the focus of ecological economics through: Allocation of resources,
Distribution of income and Scale of the economy relative to the ecosystem upon which is
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reliant. His view on scale is particularly important due to the exponential growth of
population and uneven distribution and the difference of ecological services among
ecosystems.
Trophic Economics
For designers, engineers, creators and entrepreneurs in general the challenge
lies in accepting that “business as usual” is no longer feasible, their creativity and
innovation should include the above described characteristics of universal cyclic
metabolic flow and diversity among ecosystems.
Translating this into human economic systems it refers to the creation of
business that achieve: Size and distribution accordingly to the resources locally
available, empowers diversity by adapting business models to local characteristics
and needs without neglecting possible global strategies. Resources are considered
capital and not income, thus continuous flows of materials are strictly maintained.
Therefore, searches economic growth in non-material values and equity in its
distribution.
There is a clear relation to other concepts like Product-Service-System, Cradle
to Cradle or even Circular Economy, they all share common principles. The
interconnectivity and interdependence force us to think in systems and the clear limits
to perennial growth in creating circular or cyclic flows of matter. Nevertheless it is
thought to lack a specific concept regarding the metabolic flow of these and its
relationship towards the design of business models and therefore product design as
well.
Trophic Models
In order to gain a better understanding of these relations between levels and
their relative size and distribution of metabolic flow, a graphic analogy of Trophic Levels
is presented in figure 4; where producers, herbivores and carnivores are simply
displayed in three main network topographies, just as in natural ecosystems would
work.
Fig. 4 Trophic levels in nature
Moving forward in this analogy, in figure 5 it is presented the Trophic Levels
translated into producers, distributors and consumers. Acknowledging that human
systems are created in a wide variety of configurations, it can be stated that due to the
previously discussed macroeconomic model characteristics, there is a generalised
trend where a centralised and large size is found in producers, and consumers are
widely distributed and diverse. Therefore performing in particularly opposite way to the
metabolic flow explained through thermodynamics.
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Fig. 5 Human productive systems
In figure 6 are presented the Trophic Models in all the possible combinations of
distribution of businesses. According to each case, they may have different meanings
to explore within the characteristics of the Trophic Economics.
Fig. 6 Trophic models in all possible combinations
Next a first reflection of those possible meanings:
Consumers
- Distributed, highly diverse, careful not to increase complexity in global strategies.
- Decentralised: regional level, careful about empowering diversity.
- Centralised: does not promote diversity “one size fits all”; global scale of consumption.
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Distributors
- Distributed: low energy; close human customer relation, careful not to increase
complexity in global strategies.
- Decentralised: regional level; hard to build close human customer relation.
- Centralised: high energy demanding; very hard to build close human customer
relation.
Producers
- Distributed: ‘distributed manufacturing’; use of local resources and handcraft;
promotes diversity; careful not to increase complexity in global strategies.
- Decentralised: regional scale, careful to have enough local resources.
- Centralised: normally not enough local resources, they must be brought from far
away; very-high energy demanding; does not promote diversity.
Conclusions and further work
It has been discussed the characteristics of our current macroeconomic model
and the incoherence of its performance under the laws of thermodynamics, which do
rule the system from where our entire economic model feeds. The need for alternatives
has been an ongoing challenge for many decades with important contributions from
different fields.
In the search for widening the perception of designers, engineers, creators and
entrepreneurs to this issue and translate it into a manageable business strategy, the
concept of Trophic Economics and the Trophec Models were presented, these are in
early development phase and attempt to enable creative contributions towards more
thermodynamically coherent and therefore more sustainable business models. It is
intended to gain better understanding of these concepts in the upcoming months
where diverse professionals will be using the Trophic Models inside the TROPHEC
platform.
It is acknowledged that some of the Trophic Models may look incoherent with
the described metabolic flow of the Trophic Levels; nevertheless the intention of leaving
all possible combinations is founded in the principle of avoiding any subjectivity, bias or
assumptions in this research.
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References
Constanza, R., d'Arge, R., Groot, R., Farber, S., Grasso, M., Hannon, B., . . . van den Belt, M.
(1997). The value of the world's ecosystem services and natural capital. Nature,
387(15 May), 253-260.
Daly, H. (1991). Towards an environmental macroeconomics. Land Economics, World Bank,
67(2), 255-259.
Daly, H. (1992). Steady-state economics (2nd ed.). London: Earthscan.
Daly, H., & Farley, J. (2004). Ecological Economics, principles and applications. Washington
DC: Island Press.
Georgescu-Roegen, N. (1971). The entropy law and the economic process. Cambridge,
Mass.: Harvard University Press.
GundInstitute (Producer). (2011, October 2011). Dr. Herman Daly: Sustainability and the
scale of the economy. Retrieved from
http://www.youtube.com/watch?v=rgeV3dpaRJ0
Jackson, T. (2009). Prosperity without growth, economics for a finite planet (3rd ed.).
London: Earthscan.
Jevons, W. S. (1865). The Coal Question; an inquiry concerning the progress of the nation
and the probable exhaustion of our coal-mines, an inquiry concerning the progress.
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Kuznets, S. (1934). National Income (Vol. 1929.1932, 73rd congress report, 2nd session).
Washington DC: US Senate.
Latouche, S. (2009). Farewell to growth. Cambridge: Politi Press.
Meadows, H. D. R., J; Meadows, D. (2004). Limits to growth: the 30-year update. London:
Earthscan.
Ney, J. (1990). Trophic Economics in Fisheries: Assessment of Demand-Supply
Relationships Between Predators and Prey. Aquatic Sciences, 2(1), 55-81.
Odum, H. T. (1996). Environmental Accounting: Emergy and Environmental Policy Making.
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Schumacher, E. F. (1974). Small is beautiful: a study of economics as if people mattered.
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UNEP. (2010). The Economics of Ecosystems and Biodiversity: Ecological and Economics
Foundations. London & Washington: Earthscan.
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