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This paper develops a thermodynamic input–output (TIO) model of the 1997 United States economy that accounts for the flow of cumulative exergy in the 488-sector benchmark economic input–output model in two different ways. Industrial cumulative exergy consumption (ICEC) captures the exergy of all natural resources consumed directly and indirectly by each economic sector, while ecological cumulative exergy consumption (ECEC) also accounts for the exergy consumed in ecological systems for producing each natural resource. Information about exergy consumed in nature is obtained from the thermodynamics of biogeochemical cycles. As used in this work, ECEC is analogous to the concept of emergy, but does not rely on any of its controversial claims. The TIO model can also account for emissions from each sector and their impact and the role of labor. The use of consistent exergetic units permits the combination of various streams to define aggregate metrics that may provide insight into aspects related to the impact of economic sectors on the environment. Accounting for the contribution of natural capital by ECEC has been claimed to permit better representation of the quality of ecosystem goods and services than ICEC. The results of this work are expected to permit evaluation of these claims. If validated, this work is expected to lay the foundation for thermodynamic life cycle assessment, particularly of emerging technologies and with limited information.

Appreciating the reliance of industrial networks on natural capital is a necessary step toward their sustainable design and operation. However, most contemporary accounting techniques, including engineering economics, life cycle assessment, and full cost accounting, fail in this regard, as they take natural capital for granted and concentrate mainly on the economic aspects and emissions. The recently developed "thermodynamic input-output analysis" (TIOA) includes the contribution of ecological goods, ecosystem services, human resources, and impact of emissions in an economic input-output model. This paper uses TIOA to determine the throughputs of natural and economic capitals along industrial supply networks. The ratios of natural to economic capitals of economic sectors reveals a hierarchical organization of the U.S. economy wherein basic infrastructure industries are at the bottom and specialized value-added industries constitute the top. These results provide novel insight into the reliance of specific industrial sectors and supply chains on natural capital and the corresponding economic throughput. Such insight is useful for understanding the implications of corporate restructuring on industrial sustainability metrics and of outsourcing of business activities on outsourcer, outsourcee, and global sustainability. These implications are discussed from the standpoints of weak and strong sustainability paradigms. The calculated ratios can also be used for hybrid thermodynamic life cycle assessment.

Industrial progress toward sustainability requires meaningful, practical, and scientifically sound metrics. Most existing metrics rely on information about material and energy inputs and emissions from the main process and selected processes in its life cycle. Such metrics often result in multiple conflicting variables, making it difficult to use them for decision making. Furthermore, sustainability metrics need to be scientifically rigorous and capable of evaluating the broader economy and ecosystem scale impacts of selected processes and products. This paper proposes a framework for evaluating the environmental sustainability of industrial processes that satisfies these needs. This framework uses exergy analysis to combine different types of material and energy streams in a thermodynamically sound manner. Exergy analysis is also combined with end-point life-cycle impact assessment methods for evaluating the impact of emissions. This results in metrics for a selected system with different levels of aggregation ranging from multiple to single dimensions. The challenge of analyzing a process at life cycle and coarser spatial scales is met by combining exergy analysis, life cycle assessment, input-output analysis, and both economic and ecological aspects. The result is a doubly nested hierarchy, which analyzes processes at multiple spatial scales of process, life cycle, economy, and ecosystem. Each scale contains another hierarchy based on the degree of aggregation of the metrics. A case study of the ammonia process illustrates the characteristics of the proposed approach.

Ecological resources constitute the basic support system for all activity on earth. These resources include products such as air, water, minerals and crude oil and services such as carbon sequestration and pollution dissipation (Tilman et al. 2002; Daily 1997; Costanza et al. 1997; Odum 1996). However, traditional methods in engineering and economics often fail to account for the contribution of ecosystems despite their obvious importance. The focus of these methods tends to be on short-term economic objectives, while long-term sustainability issues get shortchanged. Such ignorance of ecosystems is widely believed to be one of the primary causes behind a significant and alarming deterioration of global ecological resources (WRI 2000; WWF 2000; UNEP 2002). To overcome the shortcomings of existing methods, and to make them ecologically more conscious, various techniques have been developed in recent years (Holliday et al. 2002). These techniques can be broadly divided into two categories, namely preference-based and biophysical methods. The preference-based methods use human valuation to account for ecosystem resources (AIChE 2004; Balmford et al. 2002; Bockstael et al. 2000; Costanza et al. 1997). These methods either use a single monetary unit to readily compare economic and ecological contributions, or use multi-criteria decision making to address trade-offs between indicators in completely different units. However, preference-based methods do not necessitate

Some of the outstanding challenges faced by traditional LCA include the following. LCA is mainly an "output side" method due to its focus on emissions and their impact, but such data are often difficult to find, particularly for emerging technologies. Furthermore, although an important goal of LCA is to evaluate the environmental sustainability of technological alternatives, the very ecosystem goods and services that sustain all economic activities are usually ignored. This paper describes how thermodynamics can complement and enhance LCA by addressing these challenges. Ecosystem goods and services may be represented as the cumulative exergy consumed in ecological processes necessary for producing them. This may be calculated via methods in systems ecology and combined with engineering thermodynamics for joint analysis of industrial and ecological systems. A thermodynamic input-output model of the US economy is developed based on this approach, and is used for hybrid LCA. Accounting for ecosystem goods and services is likely to provide a reasonable proxy to life cycle impact even without knowing details about emissions and their impact. This is because as per the second law, exergy is not conserved, but is lost in each transformation step. The exergy lost to the surroundings creates disorder in the environment, which should be related to the impact of emissions. This implies that among alternatives with similar utility, the process with a higher life cycle thermodynamic efficiency should have a smaller life cycle environmental impact. This talk will present some examples as preliminary support of this hypothesis and describe challenges and on-going work for obtaining a more rigorous statistical validation.

Incorporation of ecological considerations in decision-making is essential for sustainable development, but is hindered by inadequate appreciation of the role of ecosystems, and lack of scientifically rigorous techniques for including their contribution. This paper develops a novel thermodynamic accounting framework for including the contribution of natural capital via thermodynamic input-output analysis. This framework is applied to the 1992 US economy comprising 91 industry sectors, resulting in delineation of the myriad ways in which sectors of the US economy rely on ecosystem products and services. The contribution of ecosystems is represented via the concept of ecological cumulative exergy consumption (ECEC), which is related to emergy analysis but avoids any of its controversial assumptions and claims. The use of thermodynamics permits representation of all kinds of inputs and outputs in consistent units, facilitating the definition of aggregate metrics. Total ECEC requirement indicates the extent to which each economic sector relies directly and indirectly on ecological inputs. The ECEC/money ratio indicates the relative monetary versus ecological throughputs in each sector, and indicates the relationship between the thermodynamic work needed to produce a product or service and the corresponding economic activity. This ratio is found to decrease along economic supply chains, indicating industries that are higher up in the economic food chain price ecosystem contribution more than the basic infrastructure industries such as mining and manufacturing. The ratio of CEC with and without inclusion of ecosystems indicates the extent to which conventional thermoeconomic analysis underestimates the contribution of ecosystems. Such ratios, made available for the first time, provide unique insight into the importance of natural capital, and are especially useful in hybrid thermodynamic life cycle analysis of industrial systems. The approach, data compiled in this work, and the resulting insight provide a more ecologically conscious tool for environmental decision-making, and has potential applications at micro as well as macro scales.