1. EMERGY & ENERGY SYSTEMS Session 5 Short Course for ECO Interns, EPA and Partners

2. Emergy and Economics Emergy to dollar ratios and Emdollars Cross boundary exchange Evaluating loans/interest, operating Evaluating assets, capital

3. Emdollars Calculation for US: (8 + 32 + 23 + 15) E23 sej/yr = 1.44 E12 sej/$ 5.4 E12 $/yr 1992 8 32 23 Fuel 15 G&S GNP 5.4E12 $/yr Environmental Production Economic Production Non- Renewable Assets $ $ Imports Fuels Goods & Services USA Macroeconomic Overview Exports

4. Emergy to dollar ratios Other countries –From 1980-87 –Currency converted to US $ Switzerland 0.7 Japan 1.5 World 2.0 Brazil 8.4 Liberia 34.5 E12 sej/$ Countries living more on local resources than purchased goods have higher emergy to dollar ratios.

5. Environmental Production Economic Production Non- Renewable Assets $ $ Imports Fuels Goods & Services Exports Emergy to dollar ratio Update old economic data –Use the right year –Changes everything to sej, timeless GNP

6. Calculating Benefits/Deficits Environmental Product sold Money from purchaser Price Emergy of product = (flow)(unit emergy) = benefit ratio Emergy of money paid (price)(emergy/currency) to purchaser

7. Calculating Benefits/Deficits Different emergy consumption leads to trading disparity Brazil 8.4E12 sej/$ Japan 1.5E12 sej/$ $1 8.4E12 sej $1 1.5E12 sej 5.6:1 Japan wins

8. Calculating Benefits/Deficits Different emergy consumption leads to trading disparity Brazil 8.4E12 sej/$ Japan 1.5E12 sej/$ $5.60 8.4E12 sej $1.01 8.4E12 sej Equitable trades

9. Loans and Interest Environmental Production Non- Renewable Assets $ $ Debt External market Goods & Services Investments One way to represent Interest and Principle Imports Exports

10. Sun Wind River Rain Soil Forest Harvest Fuel Fertilizer Services Market Goods and Services, Operating Expenses Adding to diagrams –Show interaction with purchased goods As data in evaluations –Multiply by emergy to dollar ratio for year of study

11. Assets and Capital Adding to diagrams Calculating contributions Buildings,Equipment Divide total value by expected life or use Materials used preferred Sometimes $$ is best you can do Sun Wind River Rain Soil Forest Fuel Fertilizer Goods Services, Operating costs MarketLumber Assets

12. Practice Exercises What is the ratio of EMERGY benefit to expenditure in buying oil at $17.50/barrel if oil has 7E9 J/barrel, a transformity of 5 E4 sej/J and the emergy to dollar ratio that year is 2 E12 sej/$? A farmer in Mexico sells 1000 lb of tomatoes to an Arizona grocer and receives $500. Another Mexican farmer exchanges 1000 lb of tomatoes for 500 lb of soybeans. If tomatoes have an emergy per mass ratio of 2 E9 sej/g wet weight, soybeans have an emergy per mass ratio of 7 E9 sej/g wet weight, and the US emergy to dollar ratio is 1 E12 sej/$, which farmer got the better deal? What would the trade have to be in both cases for the exchange to be completely equitable?

13. Practice Exercises From the diagram above, calculate the emergy to dollar ratio for the US in 1994 and answer these questions. What was the environmental contribution to the emergy that year? What was the annual emergy production that did not go into assets because of the $$s in interest going abroad on US debt? Production Envr. Soil Fuels Assets Debt Overseas $ GNP 6.7E12 $/yr $ 44 17 27 35 62 8 E12 $/yr Other countries 0.3 0.42 0.46 0.58 E23 sej/year

14. Answers Remember, I make mistakes, too….check mine to make sure its right if you don’t get the same thing What is the ratio of EMERGY benefit to expenditure in buying oil at $17.50/barrel if oil has 7E9 J/barrel, a transformity of 5 E4 sej/J and the emergy to dollar ratio that year is 2 E12 sej/$? Emergy in: 7E9 J/bbl x 5E4 sej/J = 35 E13 sej/bbl Expenditure out: $17.50/bbl x 2E12 sej/$ = 35E12 sej/bbl Ratio: 35E13sej/35E12sej = 10 What does this mean?

15. Answers A farmer in Mexico sells 1000 lb of tomatoes to an Arizona grocer and receives $500. Another Mexican farmer exchanges 1000 lb of tomatoes for 500 lb of soybeans. If tomatoes have an emergy per mass ratio of 2 E9 sej/g wet weight, soybeans have an emergy per mass ratio of 7 E9 sej/g wet weight, and the US emergy to dollar ratio is 1 E12 sej/$, which farmer got the better deal? What would the trade have to be in both cases for the exchange to be completely equitable? Tomato emergy: 1000 lb x 454 g/lb x 2E9 sej/lb = 9.08 E14 sej $$ emergy : 500$ x 1E12 sej/$ = 5 E14 sej Soybean emergy: 500 lb x 454 g/lb x 7E9 sej/g = 1.59E15sej The Arizona grocer and the soybean farmer are getting more in trade than they are giving. Equitability: 1000 lb tomatoes = $908 US = 2/7 x 1000 lb soybeans (285.7 lb)

16. Answers From the diagram above, calculate the emergy to dollar ratio for the US in 1994 and answer these questions. 44 + 35 + 8 E23 sej/yr = 1.33 E12 sej/$ 6.7 E12 $/yr What was the environmental contribution to the emergy that year? –8 + 35 = 43 E23 sej What was the annual emergy production that did not go into assets because of the $$s in interest going abroad on US debt? –0.3 E12 $/yr x 1.33 E12 sej/$ = 3.99 E23 sej