Energy and the U.S. Economy: A Biophysical Perspective

A series of hypotheses is presented about the relation of national energy use to national economic activity (both time series and cross-sectional) which offer a different perspective from standard economics for the assessment of historical and current economic events. The analysis incorporates nearl...

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Bibliographic Details
Published in:Science (American Association for the Advancement of Science) 1984-08, Vol.225 (4665), p.890-897
Main Authors: Cleveland, Cutler J., Costanza, Robert, Charles A. S. Hall, Kaufmann, Robert
Format: Article
Language:English
Subjects:
Analysis
Commercial production
Discovery and exploration
Economic aspects
Economic costs
Economic models
Energy
Energy consumption
Fossil fuels
Fuel efficiency
Fuel oil
Fuel oils
Fuels
Gross national product
Industrial productivity
Macroeconomics
Natural resources
Nuclear fuels
Petroleum
Petroleum industry
Statistics
Supply and demand
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Summary:A series of hypotheses is presented about the relation of national energy use to national economic activity (both time series and cross-sectional) which offer a different perspective from standard economics for the assessment of historical and current economic events. The analysis incorporates nearly 100 years of time series data and 3 years of cross-sectional data on 87 sectors of the United States economy. Gross national product, labor productivity, and price levels are all correlated closely with various aspects of energy use, and these correlations are improved when corrections are made for energy quality. A large portion of the apparent increase in U.S. energy efficiency has been due to our ability to expand the relative use of highquality fuels such as petroleum and electricity, and also to relative shifts in fuel use between sectors of the economy. The concept of energy return on investment is introduced as a major driving force in our economy, and data are provided which show a marked decline in energy return on investment for all our principal fuels in recent decades. Future economic growth will depend largely on the net energy yield of alternative fuel sources, and some standard economic models may need to be modified to account for the biophysical constraints on human economic activity.
ISSN:0036-8075
1095-9203
DOI:10.1126/science.225.4665.890