ENVIRONMENTAL AND THERMODYNAMIC INDICATORS IN SUPPORT OF FAIR AND SUSTAINABLE POLICY MAKING Investigating equitable trade among Latvia, Denmark and Italy Sergio Ulgiati, University of Siena, Italy Catia Cialani, University of Foggia, Italy 2 nd International Conference on INTEGRATIVE APPROACHES TOWARDS SUSTAINABILITY Riga, Latvia, May , 2005

In this lecture we will: Explore the role of environmental support in the economic performance of a Nation Explore the potentiality of the emergy approach in assessing such a performance Use the emergy approach for an assessment of trade among Latvia, Denmark and Italy Investigate options for implementing trade balance and equity among Nations

Let’s start from Mineral Mining and Trading Source: Payal Sampat, Scrapping Mining Dependence. In: The State of the World, 2003, The World Watch Institute. Pp

The Point of View of the Economy: Metals and Minerals Price Index,

Mineral Dependence and Poverty Rates Selected Countries, 1990s

Money Resources Where does wealth come from…?

Average Price of Exports Terms of Trade = Average Price of Imports goods, services and energy Exports: The sale of goods, services and energy to buyers from other countries leading to an inflow of currency to the country goods, services and energy Imports: The purchase of goods, services and energy from abroad that leads to an outflow of currency from a country The Terms of Trade looks at the relationship between the money received for exports and the money paid for imports The Terms of Trade

The Italian Terms of Trade

Everything in the biosphere is the product of a continuous self-organization activity, in which resources are degraded, cycled, and transformed via processes driven by solar energy, deep heat and gravitational potential. Environmental support

At each transformation step some energy is degraded and some is passed to the next step in the chain. The energy chain…

The 20th century energy food chain… Techno-humans… (Courtesy of Mark T. Brown, 2004)

MATERIAL INTENSITY is the overall material input which humans move, divert or extract to make a product or provide a service (Wuppertal) ECOLOGICAL FOOTPRINT is the amount of appropriate productivity, expressed in hectares that is needed to sustain a given process or population (Wackernagel and Reese) EMERGY is a measure of the global environmental support to a system, expressed in unit of solar equivalent energy (seJ) (H. T. Odum) Environmental Accounting methods

EMERGY EMERGY - The available energy (of one form, usually solar) required directly and indirectly to make something (seJ) Emergy Definition

Output = Joules or grams Emergy Intensity = Emergy support Output (Joules or grams) Emergy Intensity The amount of emergy required to produce a given amount of mass or energy of a product (seJ/J; seJ/g; seJ/€)

Emergy Based Indicators.

Signatures Signature of driving emergies for 1 hectare of corn in Florida (Brandt-Williams, 2002) Signature of driving emergies for 1 hectare of Florida mangrove ecosystem (Brown and Bardi, 2001)

Openness, environmental loading, density,...

Emergy and Money 3.48 E+24 seJ/yr (Italy, 2002) 1.44 E+12 $/yr 2.42 E+24 seJ/$ 3.48 E+24 seJ/yr E+12 $/yr

Environmental - Economic Interface System Wealth comes from resources, not from money

Structure of an emergy table

Energy Systems Diagram of Italy

Emergy Evaluation of Italy 2002

Emergy Use within the country

Break-down of Imports

Emergy signature of Italy, 2002

Emergy Evaluation of Latvia, 2002

Imports- Exports of Latvia, 2002

Emergy Signature of Latvia, 2002 Large dependence on: a) local renewable inputs b) comparable amounts of imported fossil fuels and commodities other than fuels.

Emergy Signature of Denmark, 2002 Large dependence on: a)fossil fuels (local and imported) b)imports of goods and commodities other than fuels.

Emergy-based terms of trade Total money paid Commodities to importing country (g or J) Money from importing to exporting country (€, $) Emergy benefit to buyer = Emergy of traded products Emergy of money paid

Emergy Benefit to Purchaser... Oil trade to Italy Price= $ 55/barrel $ 55 (6.9 E+09 J/bbl)(9.07 E+4 seJ/J) ($ 55/bbl)(2.42 E+12 seJ/$) 4.70

Emergy Evaluation of Trade among countries, 2002 Latvia Denmark Italy 1 $

Trade of selected products

2) Prices of commodities are unlikely to reflect equity of trade. 3) Trade equity requires: 1 ) Emergy should be used to help assessing and implementing fair trade Very difficult Possible Prices of primary resources exported to be much higher than the present ones Raw materials to be processed into final products at home and final product exported at higher price Desirable Increased international cooperation for: Updated and reliable databases on resource exchange Equitable Trade Know how transfer,…etc… Conclusions

Equity of International Resource Exchange “Trade and projects that unbalance local economies…and increase emergy inequity between countries, do not maximize the world economy, because they leave major sectors of the world's population in poverty, essentially outside the world economy. This pattern wastes resources into luxury and excess of the developed countries, diverting resources that used to go directly to population support (without payments)… …This pattern is not sustainable, does not maximize world wealth and emergy, does not reinforce world production, and will not last. These patterns will become discredited as world opinion changes, as revolutions occur, and worldwide resource depletion soon cuts off the largesse of the overdeveloped countries." (H.T. Odum, 1994)

Thanks you for your attention