EMERGY SYNTHESIS 4 : Theory and Applications of the Emergy Methodology

The value of an item in an environmental system can be determined from two independent perspectives: (1) the perspective of the donor which determines what was required to produce the item and (2) the perspective of the receiver which determines what the person that receives the item is willing to pay for it. These two perspectives give complementary views of the process of valuation, one from the objective basis of input accounting and the other from the subjective basis of human preference. Emergy provides a comprehensive measure for input accounting, whereas, money is a universal measure for human preference. For economic and emergy determinations of value to be used together in a unified analysis, an understanding of the relationship between value as determined by each method is needed. In this paper, we translated economic axioms and laws into Energy Systems Language and used the resulting structural and functional analogies to gain an understanding of the relationship between economic and emergy methods of determining value. We assembled and interpreted data to show the environmental and human service work contributions to the value of products derived from forest resources. These work contributions were aggregated by sector along an economic production chain. A general relationship between the market value of a product in dollars and its emdollar value was proposed and tested using data on the U.S. forest products industry in the early 1990s. The study results indicate that there is a firm basis for using emergy methods to augment and improve current methods of valuing environmental and economic products.