ABSTRACT
Thermoeconomics usually refers to applying thermodynamics to engineering or socioeconomic systems with the aim of improving energy efficiency and of reducing economic cost. The concept has been used in global environmental governance because thermoeconomics at the global scale covers not only the thermodynamic application to these systems, but also the material circulation aspects of ecosystem services including mineral resources that maintain sustainable development. Frederick Soddy was one of the first to use thermodynamic analysis for global governance to distinguish biophysical wealth (available energy) from monetary wealth (Soddy 1926). Nicholas Georgescu-Roegen (1971) extended Soddy’s work by placing the entropy law at the center stage of the economic process. Entropy is a general index of unavailable energy. Available energy is irrevocably transformed into unavailable energy: after burning oil, it is impossible to recover the dissipated energy. Georgescu-Roegen claimed that energy shortage and scarcity of mineral resources ultimately limit human survival (see also Carrying capacities paradigm). Factors such as the oil shocks of the 1970s, concern about peak oil, and climate change have triggered scientific investigations and theories about how to tackle entropy and material circulation for sustainability. To make quantitative assessments of energy quality on a global scale, Charlie Hall (Hall et al. 1986) proposed the EROI (Energy return on investment) concept that was originally designed as surplus energy by Fred Cottrell (Cottrell 1955). EROI is the ratio of energy produced from an energy-gathering activity compared to the energy used in that process. It indicates whether a fuel is a net energy gainer or loser.
