Economics meets physics – literally

By chance, two books about the intersection of economics and the physical world have landed recently here at Enlightenment Towers recently, by David Humphreys and by Vaclav Smil.

[amazon_image id=”113744200X” link=”true” target=”_blank” size=”medium” ]The Remaking of the Mining Industry[/amazon_image] [amazon_image id=”0262029146″ link=”true” target=”_blank” size=”medium” ]Power Density: A Key to Understanding Energy Sources and Uses[/amazon_image]

I love business histories, with all their detail about how decisions get made with no reference at all to marginal cost=marginal revenue, and David Humphreys used to be chief economist of Rio Tinto and then Norislk Nickel in Russia. He knows more than probably anyone about the economics of the mining industry, so this book promises to be full of interesting nuggets (so to speak). Paging through, one of his main themes looks to be the importance of geopolitics for the industry, and the role of government in creating a stable legal framework that will enable investment with a decades-long payoff to occur. He concludes: “The world does not have a resource problem. It cannot be ruled out, however, that it may face an investment problem.”

I also like Vaclav Smil’s previous books, and (well of course I’d like that one!), packed full of engineering insight. This one tells me that power density is “the rate of energy flux per unit of area” – huh? – and that moving to low power density renewable fuels will require “a profound spatial restructuring of the energy system.” My guess is that it means new transmission and distribution grids, but I’ll have to read it to be sure. The final sentence, in bold italics reads: “New energy arrangements are both inevitable and desirable, but without any doubt, if they are to be based on large scale conversions of renewable energy resources, then the societies dominated by megacities and concentrated industrial production will require a profound spatial restructuring of the energy system, a process with many major environmental and socioeconomic consequences.”


6 thoughts on “Economics meets physics – literally

  1. Pingback: Economics meets physics – literally | Homines Economici

  2. “the rate of energy flux per unit of area” Hmmmm.

    Energy flux is itself defined as the rate of energy transfer per unit area – picture the rate of energy (power) transferred by sunlight onto a metre squared solar panel. So I’m not sure if the words “rate of” and “per unit area” are tautological.

      • I can see how the terminology would throw the uninitiated. I’m sure economics can have that problem.

        Power is just how much energy is used per unit time.

        Power density is power per unit volume.

        Energy flux is power per unit area.

        (So power density is not equal to energy flux).

        You can see why power density might be important. If you’re putting a battery in a phone, you want to get as much power in as small a space as possible – a high power density.

        If energy is flowing – steam down a pipe or sunlight on a PV panel – you might be more interested in power per area.

    • Mmmm? Well, dark matter is stuff you can’t see but holds everything together – so trust? information?

      As for black holes, some might say Greece.

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