Solar Emergy Evaluation of the Portuguese Economy · 2014-01-06 · 438 Portuguese Economy - The...
Transcript of Solar Emergy Evaluation of the Portuguese Economy · 2014-01-06 · 438 Portuguese Economy - The...
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49 Solar Emergy Evaluation of the Portuguese Economy
Carlos Oliveira, Cecília Martins, José Gonçalves
and Francisco Veiga
ABSTRACT
This paper presents the emergy evaluation of the Portuguese economy for the years 2000, 2005 and
2009. The main objective is to provide comprehensive emergy indicators which seek to incorporate the
environmental dimension into well-known macroeconomic indicators of the Portuguese economy.
Attention is given to emergy measures of national intensity and efficiency (Emergy divided by GDP
and several measures of currency, i.e., the M1, M2 and M3 monetary aggregates; Emergy per capita;
Emergy Yield Ratio (EYR); Emergy of Imports to Emergy of Exports (IMP/EXP); Emergy Investment
Ratio (EIR); Emergy Exchange Ratio (EER); amongst others). Results show a decline in the total
amount of annual emergy required to support the country’s economy in 2009 relative to 2000.
Additionally, emergy per capita also decreased, which indicates that the population wellbeing in 2009
might be inferior to the level attained in 2000, as fewer resources from the geobiosphere were invested
in each person. On the other hand, results show that the emergy required to produce 1 USD of
economic output, measured as real GDP, decreased in 2009, indicating that real output grew faster
than resource inputs. The verified decrease in EYR and the increase in EIR suggest that, in 2009, the
Portuguese economy was more dependent on imported emergy flows. The EER indicates that Portugal
traded at a disadvantage in the global market and that the external balance of goods and services,
both on an emergy and on a national accounts perspective or economics perspective, presented a
deficit. According to sustainability measures, the Portuguese economy is not sustainable.
INTRODUCTION
Emergy Synthesis - This paper presents the emergy evaluation of the Portuguese economy for the
years 2000, 2005 and 2009. The main objective is to provide comprehensive emergy indicators which
seek to incorporate the environmental dimension into well known macroeconomic indicators of the
Portuguese economy. In this period, the economy was characterized by a low rate of economic growth,
a significant increase of the services sector share of Gross Domestic Product (GDP), and persistent
deficits in the balance of goods and services. The emergy synthesis method employed, based on
existing statistical data, reports emergy assigned to annual system inflows and outflows of matter,
energy and money.
Homeland - Portugal is located in the southeastern corner of Europe, in the Iberian Peninsula, and
has two Autonomous Regions in the Atlantic Ocean: the Azores and the Madeira archipelagos. The
Atlantic front location of the Iberian Peninsula has a great influence on the features of the Portuguese
mainland due to the natural conditions it transmits and to the privilege of having a large coastline.
Population distribution – In the year 2000 the population density was 111 inhabitant/km2, a
value very close to that of the EU27 (27 member states of the European Union) average, slightly
increasing in 2009 to 115 inhabitant/km2; the higher population density along the sea-coast increased
over time and the population concentration movement near the big metropolitan areas of Lisbon and
Oporto was reinforced.
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Portuguese Economy - The most evident changes in the productive structure since the 1990s,
were: reduction in primary sector activities, mostly concerning agriculture, forests and fishing (in the
year 2000 the contribution to total Gross Value Added, GVA, was 3.6% decreasing to 2.3% in 2009);
decreased importance of industry and construction sectors in relation to total GVA (respectively,
17.7% and 8.2% in 2000 and 13% and 6.6% in 2009); and a slight increase in the energy sector, water
and drainage (2.7% in 2000 to 3.8% in 2009). Furthermore, the tertiary sector has been stimulated by
the media sector, banks, services supplied to companies and tradable services, from which tourism
stands out as the main generator of external incomes (the services sector registered an increase in the
share of total GVA from 67.9% in 2000 to 74.2% in 2009).
Macroeconomic Performance - In 2009, the nominal Gross Domestic Product (GDP) amounted
to 168.5 billion of euros. This value corresponds to a nominal decrease of 2.0% and to a real decrease
of 2.9% when compared to 2008, which can be seen as a consequence of the recessionary effects of the
international financial crisis. The performance of the Portuguese economy during the period 2000-
2009 illustrates how difficult it has been for Portugal to adapt to the changes in the economic
environment brought about by increased economic globalization, enlargement of the European Union
and the introduction of the Euro. The increasing gap over the last decade between Portugal’s per capita
GDP and that of the European (EU 27) average is the main indicator of the poor macroeconomic
performance of the Portuguese economy (GDP per capita in Purchasing Power Standard was around
78.0% of the EU27 average in 2000, but only 76.6% in 2009). Other indicators include: increase in the
unemployment rate (from 3.9% in 2000 to 9.5% in 2009); low labor productivity (68.8% of the EU27
average in 2000 and 71.8% in 2009); and an excessive weight of private consumption and, mostly, of
public expenses on national expenditure. Both have increased faster than production (82.5% of GDP in
2000 and 87.6% in 2009) and were supported by increasing private and public debt. Furthermore, there
was an important and long lasting investment crisis (Gross fixed capital formation was of 27.1% of
GDP in 2000 and only 20.9% in 2009) and a slowdown of the exports of goods and services (real
growth of 8% in 2000, 8.7% in 2006, -0.5% in 2008 and -11% in 2009) which, combined with
increased imports of goods and services until 2008, produced a persistent deficit in the balance of
goods and services (-11% from GDP in 2000 and -7.5% in 2009) and in the current account, leading to
the accumulation of a very large stock of external debt (data sources: GEPEARI 2010, Banco de
Portugal 2001, Banco de Portugal 2010 and Instituto Nacional de Estatística).
METHODOLOGY
The procedures to evaluate the emergy supporting the Portuguese Economic System, for the years
2000, 2005 and 2009, followed the general Emergy Synthesis Methodology of states and nations
presented in several previous studies (e.g., Odum 1996, Brown 2003, Brown et al. 2009, Sweeney et
al. 2006, Campbell 2009). In this paper, the new emergy reference baseline of 15.2E25 seJ/yr was used
(Brown and Ulgiati 2010). Unit Emergy Values, UEV (seJ/J, seJ/kg or seJ/$), were obtained from
several previous studies and converted to new updated values by multiplying them by the ratio
between the new baseline and the previous one. The numerous resource flows were aggregated into:
local renewable resources (R); local nonrenewable resources (N), which are categorized into dispersed
rural sources (N0), concentrated resources (N1) and non transformed minerals and metals that are
exported (N2); imports (IMP), whose major items are grouped into three categories including fuels,
minerals and electricity (F), other goods (G), and services in imports (P2I); exports (EXP) divided also
into three parts, one consisting of transformed products (B), a second one of services in exports (P1E)
and a third part, already mentioned, of non transformed metals and minerals (N2). Total emergy
required (U), was calculated for each year by adding emergy flows from local renewable resources,
from local nonrenewable dispersed and concentrated resources, and from imports (U =
R+N0+N1+F+G+P2I). The aggregated emergy flows were used to calculate several emergy indices
generally used in national emergy syntheses (e.g., Odum 1996, Brown et al. 2009, Brown 2003, Brown
and Ulgiati 1997, Campbell 2009, Ulgiati et al. 1994, Gasparatos and Gadda 2009, Lomas et al. 2008,
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Yang et al. 2010, Cialani et al. 2006): Emergy/capita (U/capita); Emergy/area (U/area);
Emergy/Money Ratio (EMR=U/GDP); Imports/Exports (IMP/EXP); Emergy Yield Ratio
(EYR=U/IMP); Emergy Exchange Ratio (EER=(country Emergy/Money ratio)/(world Emergy/Money
ratio)); Emergy Investment Ratio (EIR=IMP/(N0+N1+R)); Percent Renewable Emergy
(%Ren=(R/U)x100); Environmental Loading Ratio (ELR=(N0+N1+IMP)/R); Emergy Sustainability
Index (EmSI=EYR/ELR); and Renewable Carrying Capacity ((Renewable Emergy)/(Emergy/capita) ).
This study includes Portugal’s mainland and its two autonomous regions (Madeira and Azores).
For renewable emergy accounting, the overall area of the country was divided into two different areas
(Campbell 2009) – the country’s coastal area and the land area. Only the largest renewable flow for
each area was accounted for in order to avoid double counting, and the two major flows were added to
get the total input renewable emergy flow of the entire area of the country. In order to evaluate the
Emergy/Money ratio of Portugal (P1), real GDP (chain-linked volume data, 2000 $), nominal GDP and
monetary aggregates M1, M2 and M3 were considered. The Emergy/Money ratio of the world (P2),
used in the calculation of the emergy of services in imported flows (P2I) was obtained from Brown and
Ulgiati (2011), by data interpolation for the years 2000 and 2005 and data extrapolation for the year
2009. The values of the indices obtained were compared with those of other countries presented in
several studies (e.g., Brown 2003, 2009, Sweeney et al. 2006, Lomas 2006).
RESULTS
Emergy National Account
The emergy evaluation of the Portuguese economic system for the years 2000, 2005 and 2009 is
presented in Table 1. Table 2 contains, for those years, a summary of the main inflows and outflows.
Total emergy required (U) was 1.50E24 seJ in 2000 and 1.45E24 seJ in 2009 (-3.3%), while 2005
presents the highest value of the three (Figure 2). Emergy from local nonrenewable flows (N0 + N1) is
the major contribution to the total emergy supporting the economic system, being 8.24E23 seJ in the
year 2000 and 7.15E23 seJ in 2009 (-13.2%) representing, respectively, 54.9% and 49.3% of total
emergy. This variation is responsible for the decreased total value of emergy required in 2009
compared to 2000. The second major contribution is from imported flows (IMP), which increased from
6.08E23 seJ in 2000 to 6.71E23 seJ in 2009 (+10.4%) representing, respectively, a variation of 40.5%
to 46.3% of the total emergy required. The contribution of the renewable emergy flow (R) is almost
unchanged over time, being 6.71E22 seJ in 2000 and 6.35E22 seJ in 2009 (-5.3%), contributing with
4.5% and 4.4% of the total emergy, respectively. Thus, even though the emergy of local nonrenewable
flows is the largest contribution to the total emergy accounted for, its importance decreased in favor of
emergy of imported flows. The aggregated diagram shown in Figure 1 further summarizes Portugal’s
emergy synthesis for the year 2000.
Local Renewable and Nonrenewable Emergy Flows
Sea waves provide the largest renewable emergy flow for the coastal area, while rain is the main
provider for the land area. The former is on average about five times the latter, 5.23E22 seJ and
1.10E22 seJ, respectively (Table 1). The small variability in the renewable emergy flows calculated
depends exclusively on annual rainfall, due to lack of data concerning the variability of other flows in
the time period of this study. Dispersal rural sources, N0, consist exclusively of soil loss (mineral and
organic), because for the time period considered in this study, the data indicated no losses concerning
forest extraction, and no data were available regarding losses associated with other resources like
fishery production or water extraction. Concentrated resources, N1, consist of reserves of metals and
minerals, since fuels are not included because Portugal is not a producer of this type of resources. The
largest component of nonrenewable emergy flows consists of minerals, which was 7.72E23 seJ in 2000
with a decrease to 6.64E23 seJ in 2009 (-14%) representing, respectively, 94% and 93% of the total
flow. The second largest component is metals, which was 3.81E22 seJ in 2000 with an increase to
4.03E22 seJ in 2009 (+5.7%), representing 5% and 6% of the total local nonrenewable emergy flows,
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Table 1. Emergy evaluation of resource basis for Portugal (2000, 2005 and 2009).
Note Item 2000 2005 2009 % Diff., 00-09
Renewable resources (seJ/yr)
1 Sunlight 4.11E+20 4.11E+20 4.11E+20 0.0
2 Rain, chemical 1.02E+22 4.69E+21 7.72E+21 -24.2
2a Land 8.76E+21 4.03E+21 6.63E+21 -24.2
2b Continental Platform 1.43E+21 6.61E+20 1.09E+21 -24.2
3 Rain, geopotential 6.07E+21 2.79E+21 4.60E+21 -24.2
4 Wind, kinetic energy 8.39E+21 8.39E+21 8.39E+21 0.0
5 Waves 5.23E+22 5.23E+22 5.23E+22 0.0
6 Tide 1.67E+22 1.67E+22 1.67E+22 0.0
7 Earth Cycle 4.43E+21 4.43E+21 4.43E+21 0.0
Indigenous Renewable Energy (seJ/yr)
8 Renewable Energy 8.59E+21 4.50E+21 9.26E+21 7.9
8a Hydroelectricity 8.11E+21 3.39E+21 5.87E+21 -27.6
8b Geothermal 6.48E+19 5.80E+19 1.48E+20 127.6
8c Wind 5.76E+19 6.06E+20 2.59E+21 4396.3
8d Others (solar, tides and waves) 7.27E+17 2.18E+18 1.11E+20 15100.0
8e Biomass and waste 3.50E+20 4.49E+20 5.46E+20 55.7
9 Agriculture Production 1.07E+23 1.05E+23 1.04E+23 -3.5
10 Livestock Production 4.43E+22 4.34E+22 4.41E+22 -0.4
11 Fisheries Production 2.71E+21 2.96E+21 2.80E+21 3.5
12 Fuelwood Production 7.69E+19 7.69E+19 7.69E+19 0.0
13 Forest Extraction 1.31E+21 1.30E+21 1.15E+21 -12.4
14 Total electricity used 4.48E+22 5.37E+22 5.62E+22 25.5
Nonrenewable sources from within system (seJ/yr)
15 Minerals 7.72E+23 8.23E+23 6.64E+23 -14.0
16 Metals 3.81E+22 3.96E+22 4.03E+22 5.7
17 Soil losses 1.34E+22 1.11E+22 1.11E+22 -16.8
Imports (seJ/yr)
18 Fuels 1.47E+23 1.67E+23 1.45E+23 -1.0
19 Metals 7.91E+21 6.49E+20 5.83E+20 -92.6
20 Minerals 1.34E+22 1.28E+22 8.41E+21 -37.0
21 Transformed metals 7.18E+22 9.09E+22 7.41E+22 3.3
22 Transformed minerals 5.90E+22 5.42E+22 1.26E+23 112.8
23 Food and agricultural products 2.93E+22 3.50E+22 3.69E+22 25.8
24 Livestock, meat and fish 1.50E+22 1.75E+22 2.56E+22 70.3
25 Plastics and rubber 6.43E+21 7.96E+21 9.38E+21 45.9
26 Chemicals 5.93E+22 6.51E+22 7.13E+22 20.2
27 Finished materials 7.39E+22 6.09E+22 6.67E+22 -9.8
28 Machinery and transportation equipment 1.21E+22 1.14E+22 1.53E+22 26.4
29 Electricity 5.47E+21 1.12E+22 8.84E+21 61.7
30 Imported services (tourism included) 1.50E+22 1.22E+22 1.65E+21 -89.0
31 Services on imported goods 9.23E+22 8.15E+22 8.10E+22 -12.3
Exports (seJ/yr)
32 Food and agricultural products 4.22E+21 6.58E+21 1.02E+22 141.0
33 Livestock, meat and fish 7.37E+21 8.81E+21 1.23E+21 67.1
34 Finished materials 5.06E+22 5.21E+22 6.02E+22 18.9
35 Fuels 1.22E+22 2.07E+22 2.05E+22 67.8
36 Metals 4.15E+22 4.05E+22 3.95E+22 -4.8
37 Minerals 5.27E+21 6.38E+21 8.06E+21 53.1
38 Transformed metals 9.67E+21 3.72E+22 3.85E+22 298.2
39 Transformed minerals 2.63E+22 3.40E+22 3.12E+22 18.6
40 Chemicals 3.62E+22 4.37E+22 3.41E+22 -5.6
41 Machinery and transportation equipment 6.99E+21 7.16E+21 1.09E+22 55.3
42 Plastics and rubber 3.66E+21 6.46E+21 7.18E+21 96.0
43 Exported services (tourism included) 1.00E+23 6.16E+22 1.13E+23 12.3
44 Service on exported goods 3.36E+23 3.79E+23 3.05E+23 -9.3
45 Electricity 4.38E+21 3.26E+21 3.28E+21 -25.1
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Figure 1. Aggregate diagram for the Portuguese economic system for the year 2000 (adapted from
Brown 2003).
respectively. Soil loss is a minor component, and was 1.34E22 seJ in the year 2000, decreasing to
1.11E22 seJ in 2009 (-16.8%) representing nearly 1% of the total nonrenewable emergy flows in each
year. Thus, the decrease in the nonrenewable contribution in 2009, compared to 2000, is due to a
decrease in mineral consumption. This is related with the decrease in construction materials
consumption, such as sand, gravel, gypsum and clay, which reflects the evolution of the construction
sector in Portugal over the last decade. National accounts data also indicate that the construction sector
is losing weight in relation to total GVA (8.2% in 2000 and 6.6% in 2009).
Imported and Exported Emergy Flows
The composition of imported emergy flows and exported emergy flows in 2000 and in 2009 is
presented in Figure 3. Results show that emergy of aggregated imported goods (G), mainly from
metallic products, chemicals and finished products (textiles, wood, paper and leather), makes the
largest contribution to the total imported emergy. It was 3.27E23 seJ in 2000 and rose to 4.25E23 seJ
in 2009 (+30.0%), accounting for 53.8% and 63.3% of the total imported emergy flows, respectively,
and is responsible for its greater value in 2009 compared to the year 2000. The second major
contribution was from emergy of aggregated fuels, metals, minerals and electricity flows (F), which
was 1.74E23 seJ in 2000 and 1.63E23 in 2009 (-6.0%), accounting for 28.6% and 24.3% of the total
imported emergy flows, respectively. Fuels represent 84.5% of the group in 2000 and 89.0% in 2009,
although the absolute value is nearly the same for both years (Table 1). Emergy flows of imported
services (P2I), which include imported services (including tourism) and services in imported goods,
decreased its contribution to the total imported emergy flows, from 1.07E23 seJ in 2000 to 8.26E23 seJ
in 2009 (-23.0%) accounting, respectively, for 17.6% and 12.3% of the total emergy imported flows.
As far as exported emergy flows are concerned, the largest contribution was from services (P1E),
which includes exported services (including tourism) and services in exported goods, with 4.37E23 seJ
in 2000 and 4.18E23 seJ in 2009 (-4.4%), accounting for 67.8% and 60.2% of the total exported
emergy flows, respectively. The second major contribution to exported emergy flows was from
transformed products (B), mainly finished products (textiles, wood products, and paper), metallic
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Table 2. Summary of emergy flows of the Portuguese economy (2000, 2005 and 2009) .
Item Expression 2000 2005 2009 % Diff., 00-09
1 Country area (m2) - 9.22E+10 9.22E+10 9.22E+10 0.0
2 Population (inhabitants) - 1.02E+07 1.05E+07 1.06E+07 4.1
3 Renewable sources (seJ/yr) R 6.71E+22 5.91E+22 6.35E+22 -5.3
4 Nonrenewable resources (seJ/yr) N 8.70E+23 9.20E+23 7.63E+23 - 12.4
5 Local nonrenewable resource (seJ/yr) N0+N1 8.24E+23 8.73E+23 7.15E+23 - 13.2
6 Dispersed rural source (seJ/yr) N0 1.34E+22 1.11E+22 1.11E+22 -16.8
7 Concentrated used (seJ/yr) N1 8.10E+23 8.62E+23 7.04E+23 -13.1
8 Exported without use (seJ/yr) N2 4.68E+22 4.69E+22 4.76E+22 1.8
9 Imported fuels and minerals (seJ/yr) F 1.74E+23 1.91E+23 1.63E+23 -6.0
10 Imported goods (seJ/yr) G 3.27E+23 3.43E+23 4.25E+23 30.0
11 Dollars paid for imports (USD) I 4.73E+10 4.57E+10 4.42E+10 -6.5
12 World emergy/USD ratio, used in
imports (seJ/USD)
P2 2.27E+12 2.05E+12 1.87E+12 -17.6
13 Emergy of services in imported goods
and fuels (seJ/yr)
P2I 1.07E+23 9.37E+23 8.26E+23 -23.0
14 Dollars received for exports (USD) E 3.41E+10 3.44E+10 3.55E+10 4.2
15 Emergy exported of processed products
(seJ/yr)
B 1.62E+23 2.20E+23 2.28E+23 41.3
16 Flow of imported emergy (seJ/yr), IMP F+G+P2I 6.08E+23 6.28E+23 6.71E+23 10.4
17 Total emergy inflows (seJ/yr) R+N+F+G+P2I 1.55E+24 1.61E+24 1.50E+24 -3.1
18 Total emergy (seJ/yr), U N0+N1+R+F+G+P2I 1.50E+24 1.56E+24 1.45E+24 -3.3
19 Real Gross Domestic Product (USD) GDPr 1.17E+11 1.22E+11 1.23E+11 5.4
20 Nominal Gross Domestic Product
(USD)
GDPn 1.17E+11 1.91E+11 2.34E+11 100.2
21 Total emergy to GDPr (seJ/USD), used
in exports, P1
P1=U/GDPr 1.28E+13 1.28E+13 1.18E+13 -8.2
22 Total emergy to GDPn (seJ/USD) U/GDPn 1.28E+13 8.16E+12 6.19E+12 -51.7
23 Emergy value of goods and service
exports (seJ/yr)
P1E 4.37E+23 4.40E+23 4.18E+23 -4.4
24 Flow of exported emergy (seJ/yr), EXP B+N2+P1E 6.45E+23 7.07E+23 6.94E+23 7.6
25 Monetary aggregates (USD) M1 3.96E+10 6.63E+10 7.85E+10 98.2 M2 1.06E+11 1.63E+11 2.27E+11 129.0 M3 1.07E+11 1.65E+11 2.45E+11 123.6
26 Total emergy to money supply ratios U/M1 3.78E+13 2.35E+13 1.85E+13 -51.2 U/M2 1.41E+13 9.57E+12 6.39E+12 -54.8 U/M3 1.40E+13 9.46E+12 5.92E+12 -57.8
Figure 2. Emergy inflows and total emergy supporting the Portuguese economy for the years 2000,
2005 and 2009.
0.0E+00
4.0E+23
8.0E+23
1.2E+24
1.6E+24
2.0E+24
1999 2001 2003 2005 2007 2009
Em
pow
er (
seJ
/yr)
Renewable sources Local non renewable resourcesImports Total Emergy
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products and chemicals, with 1.62E23 seJ in 2000 and 2.28E23 seJ in 2009 (+41.3%), accounting for
25.1% and 32.9% of the total exported emergy flows, respectively. Emergy of metals and minerals
non-transformed flows (N2) was 4.68E22 seJ in 2000 and 4.76E22 seJ in 2009 (+1.7%), decreasing its
contribution to the total exported emergy flows from 7.3% to 6.9%, respectively. The total imported
emergy flows and the total exported emergy flows for the years 2000, 2005 and 2009 are close to each
other, the former being lower than the latter (Figure 4).
DISCUSSION
The main emergy indices for emergy evaluation of Portuguese economic system, obtained from
aggregated emergy flows, are presented in Table 3 as well as the difference between the years 2009
and 2000.
Figure 3. Imported and exported emergy flows composition for the years 2000 and 2009.
Figure 4. Imported and exported emergy flows for the years 2000, 2005 and 2009.
0.0E+00
2.0E+23
4.0E+23
6.0E+23
8.0E+23
1999 2001 2003 2005 2007 2009
Em
po
wer
(se
J/y
r)
Imports
Exports
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Table 3. Emergy indices for the emergy evaluation of the Portuguese economy (2000, 2005 and 2009).
Name of Index Expression 2000 2005 2009 % Diff.
00-09
1 Fraction of total emergy from
indigenous sources
(N0+N1+R)/U 0.59 0.60 0.54 -9.6
2 Imports minus exports
(seJ/yr)
(F+G+P2I)-
(N2+B+P1E)
-3.73E+22 -7.89E+22 -2.27E+22 -39.1
3 Imports to Exports (F+G+P2I)/ (N2+P1E) 0.94 0.89 0.97 2.7
4 Fraction locally renewable R/U 0.04 0.04 0.04 -2.2
5 Fraction purchased (F+G+P2I)/U 0.41 0.40 0.46 14.1
6 Fraction from imported
services
P2I/U 0.07 0.06 0.06 -20.4
7 Fraction that is free (R+N0)/U 0.05 0.05 0.05 -4.1
8 Ratio of concentrated to rural
emergy
(F+G+P2I+N1)/(R+N0) 17.62 21.22 18.42 4.6
9 Emergy density (seJ/m2/yr) U/(area, ha) 1.63E+17 1.69E+17 1.57E+17 -3.3
10 Emergy per capita (seJ/cap) U/population 1.47E+17 1.48E+17 1.36E+17 -7.1
11 Renewable carrying capacity
at present living standard
(R/(U/population)) 4.58E+05 4.00E+05 4.66E+05 1.8
12 Ratio of electricity use to total
emergy
(elect.)/U 0.03 0.03 0.04 29.7
13 Fuel per person (seJ/cap) Fuel/population 1.44E+16 1.58E+16 1.37E+16 -4.9
14 Emergy investment ratio
(EIR)
IMP/(R+N0+N1) 0,68 0,67 0,86 26.2
15 Environmental loading ratio
(ELR)
(F+G+P2I+N)/R 22.03 26.20 22.57 2.5
16 Emergy yield ratio (EYR) U/(F+G+P2I) 2.47 2.48 2.16 -12.4
17 Emergy sustainability index
(EmSI)
EYR/ELR 0.11 0.09 0.10 -14.5
18 Emergy exchange ratio (EER) P2/P1 0.18 0.16 0.16 -10.2
Emergy Intensities
As population increased slightly, from 1.02E7 inhabitants in 2000 to 1.06E7 in 2009, and total
emergy reported slightly decreased, emergy per capita decreased 7.9% over this period, from 1.47E17
seJ/capita in 2000 to 1.36E17 seJ/capita in 2009 (Figure 5). The variation of the emergy/area ratio
followed that of total emergy, as the area did not change (1.63E17 seJ/m2 in 2000 and 1.57E17 seJ/m
2
in 2009 (-3.3%)). These variations, associated with the decrease in total emergy required, indicate that,
the wellbeing of the population in 2009 might be inferior to the level attained in 2000, since fewer
resources were required. However, the magnitude of the values of these intensity indices is considered
high and characteristic of developed economies (Brown 2003).
The measure of aggregate output in the national income accounts is the gross domestic product
(GDP). Portugal’s nominal GDP (at current prices) increased from 1.17E11 USD in 2000 to 2.34E11
USD in 2009 (+100.2%) and real GDP (chain-linked volume data, at 2000 prices) increased from
1.17E11 USD in 2000 to 1.23E11 USD in 2009 (+5.4%) (Figure 6). Nominal GDP is simply the sum
of the quantities of final goods produced multiplied by their current prices, and it may increase over
time for two reasons: greater production, or higher prices. Other national economic measures of
currency are the monetary aggregates M1, M2 and M3 (Figure 7). The monetary aggregates are
affected by monetary policy, and M1, called narrow money (currency in circulation + checkable
deposits), is the most liquid; M2 is called broad money, and is equal to M1 + money market mutual
fund shares + money market deposit accounts + time deposits; finally, M3 includes a few more assets
than M2.
445
Figure 5. Portuguese population and empower per capita for the years 2000, 2005 and 2009.
Figure 6. Total emergy required in the Portuguese economy and monetary flows measured by nominal
GDP and by real GDP (chain-linked volume data, 2000 prices).
Figure 7. Total emergy required in the Portuguese economy and monetary flows measured by
monetary aggregates M1, M2 and M3 and real GDP (chain-linked volume data, 2000 prices).
0.00E+00
5.00E+16
1.00E+17
1.50E+17
2.00E+17
0.0E+00
2.0E+06
4.0E+06
6.0E+06
8.0E+06
1.0E+07
1.2E+07
1999 2001 2003 2005 2007 2009
Em
po
wer
p
er c
ap
ita
(seJ
/ca
p/y
r)
Po
pu
lati
on
Population
Empower per capita
0.0E+00
4.0E+23
8.0E+23
1.2E+24
1.6E+24
2.0E+24
1.0E+11
1.5E+11
2.0E+11
2.5E+11
3.0E+11
3.5E+11
1999 2001 2003 2005 2007 2009
Em
pow
er (
seJ
/yr)
Doll
ars
($
)
Real GDP Nominal GDPEmergy
0.0E+00
4.0E+23
8.0E+23
1.2E+24
1.6E+24
2.0E+24
0.0E+00
5.0E+10
1.0E+11
1.5E+11
2.0E+11
2.5E+11
1999 2001 2003 2005 2007 2009
Em
po
wer
(se
J/y
r)
Do
lla
rs (
$)
M1 M2 M3Real GDP Emergy
446
Within the set of selected key indicators that central banks consider important to monitor and
study, for further monetary police, are the monetary aggregates. That monetary analysis relies on the
fact that monetary growth and inflation are closely related in the medium to long run, thus
underpinning the medium-term orientation of the central bank’s monetary policy strategy. Such
analysis helps to provide both a better insight into the behavior of M3 and a broad picture of the
liquidity conditions in the economy and their consequences in terms of risks to price stability. Finally,
the analysis of money and credit may, under certain circumstances, provide early information on
developing financial instability. Such information is of relevance for monetary policy because the
emergence of financial imbalances or asset price bubbles could have a destabilizing effect on activity
and, ultimately, prices in the medium term. As Odum argued (2007 p.257), adding some money (which
means that central banks increases the monetary aggregates) in order to cause money to circulate faster
increases the energy and emergy flows if unused resources are available. But if those resources aren`t
available it would cause inflation, meaning that more money is circulated but the supply of real wealth
is not increased. Better knowledge on emergy relations to measures of money circulation could provide
information needed to set monetary policies and could clarify about the economic and emergetic roles
of nations.
Over the sample period the average growth rate of the monetary aggregates M2 and M3 was
stable, while the average growth rate of real GDP has been very low. This helps explain why in 2005
and 2009, the aggregates M2 and M3 (the broadest of the three aggregates) were higher than real GDP,
as seen in Figure 7. According to the quantity equation, MV=PY, where M is the monetary aggregate,
V is the velocity of money, P is the price level and Y is the real income. Considering that during the
2000-2009 period, Y (real GDP) is approximately constant and assuming that V is small and close to 1,
then nominal GDP (PY) should be practically equal to M3, and very close to M2, as can be confirmed
in Figure 8. This result indicates that money supply is proportional to nominal GDP and that, during
the period under analysis, as real GDP growth is very small, money supply simply reflects increases in
the price level.
As proposed by Odum (1996, p.7), emergy is a scientific measure of real wealth in terms of the
energy required to do work. To relate emergy measures with economic ones, it is necessary to
consider, in both perspectives, the need to eliminate the effect of increasing prices. For this purpose,
this work focuses on real GDP, rather than nominal, because the former more accurately measures the
volume production and its change over time. Likewise, all the values of monetary flows considered in
emergy accounting (e.g., dollars paid for imported goods and services) are real quantities.
The emergy to money ratio using real GDP, nominal GDP, and monetary aggregates M2 and M3
is shown in Figure 9. It is noticeable that all the ratios have similar decreasing trends, but the ratio to
real GDP is the one which presents smaller variation over the period. It means that the numerator
amount (all system inputs), varies more likely the denominator (system output aggregate) and, hence, it
is the adopted emergy/money ratio to relate the two different perspectives (donor side value versus
user side value) of measuring real wealth. The value, which decreased from 1.28E13 seJ/USD in the
year 2000 to 1.18E12 seJ/USD in 2009 (-8.2%) is consistent with all developed countries and means
that, inside the country, the same amount of money could buy less emergy in 2009 than in 2000, that
is, the emergy buying power of money was lower in 2009 than in 2000 (Brown et al. 2003, 2009,
Cialani et al. 2004, Campbell et Lu, 2009).
Indices of National Economic Efficiency
One of the major macroeconomic variables, which tell about important aspects of countries
economy, is the trade deficit (the excess of imports from the rest of the world over exports to the rest
of the world). A country that runs a trade deficit is buying more from abroad than it is selling abroad,
and is thus accumulating debt vis-à-vis the rest of the world. The ratio exported value to imported
value, called coverage ratio, gives similar information as the trade balance indicator. Hence values
greater than 100% means that exports values are superior to imports values or a positive trade balance.
447
Figure 8. Total emergy required in the Portuguese economy and monetary flows measured by
monetary aggregates M1, M2, M3 and nominal GDP.
Figure 9. Emergy to money ratios related to money flows measured as M2, M3, nominal GDP and
real GDP (chain-linked volume data, 2000 prices).
Considering emergy approach, the ratio emergy in imports to emergy in exports is the suitable
coverage ratio to also evaluate emergy trade balance. This emergy ratio is linked with countries
economic efficiency because each country develops an economy tuned to its own resources plus what
can be added through external trade. If emergy measure real wealth, than ratios greater than 100%
means that more real wealth is imported in flows of goods and services than the real wealth that leaves
the county in flows of exported goods and services. If a country is economic efficient than its GDP
would be higher, and it would enhance the product value added of its resources in successive steps,
from environmental, to processor, to manufacturer, to wholesaler, to retailer, to consumer. Each step
would involve additional inputs from the environmental and additional cost. If a country is economic
0.0E+00
4.0E+23
8.0E+23
1.2E+24
1.6E+24
2.0E+24
0.0E+00
5.0E+10
1.0E+11
1.5E+11
2.0E+11
2.5E+11
1999 2001 2003 2005 2007 2009
Em
po
wer
(se
J/y
r)
Do
lla
rs (
$)
M1 M2 M3
Nominal GDP Emergy
5.0E+12
7.0E+12
9.0E+12
1.1E+13
1.3E+13
1.5E+13
1999 2001 2003 2005 2007 2009
Em
erg
y t
o M
on
ey R
ati
o
(seJ
/$/y
r)
U/M2
U/M3
U/GDPr
U/GDPn
448
efficient it would export products with increased money value but with decreased energy value and
those products would have lower emergy contents. So, economic efficient countries should have ratios
of emergy in imports to emergy in exports superior to 100%. In this study the ratio of imported to
exported emergy flows (IMP/EXP) increased from 0.94 in 2000 to 0.97 in 2009 +2.7%). The
difference in imports-exports (IMP-EXP) is negative and 39.1% lower in 2009 than in 2000, which
mean that more emergy was exported than imported. On the other hand, the Emergy Yield Ratio
(EYR), was 2.47 in 2000 and dropped to 2.16 in 2009 (-12.4%), meaning that more imported emergy
flows were necessary per unit of total emergy required in 2009 than in 2000 (Figure 10). However, this
decrease in the EYR value is not only due to an increase in imports, but also to the decrease in the total
emergy required, as explained above. The Emergy Exchange Ratio (EER) decreased from 0.18 in 2000
to 0.16 in 2009 (-10.2%), both values being far below 1.0. This indicates that Portugal traded at a
disadvantage in the global market (Brown 2003, Brown et al. 2009).
Indices of National Environmental Support
The Emergy Investment Ratio (EIR), increased from 0.68 in 2000 to 0.86 in 2009 (+26.2%),
(Figure 10) which is due to the rise in imported emergy flows (+10.4%) and to the decrease in local
nonrenewable emergy flows (-13.2%). Thus, more external investment was necessary in 2009 to
exploit one unit of local resources than in 2000 (Gasparatos and Gadda 2009, Yang et al. 2010, Ulgiati
et al. 1994). The Percent Renewable Emergy (%Ren) index is almost constant, nearly 4.4% on average
in the three years covered by this study. This value is very low and indicates that, during the period
under analysis, Portugal’s development was based on natural nonrenewable resource extraction and on
imported resources, rather than based on renewable resource exploitation. It suggests that Portugal’s
long-term sustainability may be compromised and that the country may not be competitive in the long-
run (Brown 2003).
The Environmental Loading Ratio (ELR) increased slightly, from 22.0 in 2000 to 22.6 in 2009
(+2.5%) (Figure 10). This small variation is due to the fact that the increase in imports was almost
compensated by the decrease in nonrenewable flows. Even if the increasing stress on the environment
doesn’t show a significant increase, it is high when compared with the values for of other countries
(Brown 2003, Brown et al. 2009, Lomas et al. 2008, Siche and Ortega 2006). The high values are due
to the low fraction of renewable emergy flows within the total emergy required to support the
Portuguese economy.
Sustainability and Carrying Capacity
The Emergy Sustainability Index (EmSI), was 0.112 in 2000 and 0.096 in 2009 (-14.5%) (Figure
11). These values are far below 1.0, and are typical of consumer countries, suggesting that the
economy is not sustainable in the long run (Brown 2003, Brown et al. 2009).
Although the contribution of renewable emergy remains almost constant and the population have
increased, from 2000 to 2009, the renewable carrying capacity increased 1.8%, from 4.58E5
inhabitants in the year 2000 to 4.66E5 in 2009 (Figure 11). This is due to the fact that the renewable
carrying capacity is relative to the current living standard (that is, emergy required per capita for each
year) which is lower in 2009 than in 2000, as discussed above. Those values represent only 4.5%
(2000) and 4.4% (2009) of the population which could be supported by renewable sources alone, if the
living standards of the respective years were maintained.
449
Figure 10. Changes in national efficiency indices measured by Emergy Yield Ratio, Emergy
Investment Ratio and Emergy Loading Ratio.
Figure 11. Changes in the Emergy Sustainability Index and in the Renewable Carrying Capacity for
the years 2000, 2005 and 2009.
CONCLUSIONS
Total emergy required by the Portuguese economy decreased over the time period analyzed in this
study. From 2000 to 2009, there was a reduction of 3.3% in the total emergy accounted for. The
Portuguese economy also experienced slow economic growth, and its divergence from the average per
capita GDP of the European Union increased. Emergy from local nonrenewable flows was the major
contribution to total emergy (+49.3% in 2009), but its importance decreased in favor of emergy
imported flows, revealing that Portugal reinforced its dependence on the latter (+46.3% in 2009).
National emergy intensity indicators suggest that the Portuguese population had a lower standard
of living in 2009, as well as increased urban concentration. The ratio of total emergy required to real
0
5
10
15
20
25
30
1999 2001 2003 2005 2007 2009
Environmental loading ratio (ELR)
Emergy yield ratio (EYR)
Emergy investment ratio (EIR)
0.0E+00
5.0E+04
1.0E+05
1.5E+05
2.0E+05
2.5E+05
3.0E+05
3.5E+05
4.0E+05
4.5E+05
5.0E+05
0.00
0.04
0.08
0.12
0.16
0.20
1999 2001 2003 2005 2007 2009
Ren
ewa
ble
ca
rry
ing
ca
pa
city
Em
erg
y S
ust
ain
ab
ilit
y I
nd
ex,
Em
SI
EmSI
Renewable carrying capacity
450
GDP was adopted as the most appropriate to relate real wealth evaluated by the two amounts, although
differences in accounts persist and may be related to the work contributed by nature outside the
production function (Campbell 2009). Currently, the relationship between economic growth and the
importance of the environmental dimension (because growth precipitates the depletion of exhaustible
natural resources and induces a deterioration in the environment) is integrated in new growth theories
(Aghion and Howitt 2009) which argue that innovation and directed technical change make it possible
to reconcile the sustained growth objective.
The national emergy economic efficiency values show that Portugal had lower ability to exploit
emergy from imports in 2009, and that it traded at a disadvantage in the global market. In fact, during
the period, the Portuguese economy faced two economic recessions mainly related to low work
productivity and to a persistent deficit in the external balance of goods and services. It is important to
notice that the external balance of goods and services, either from the emergy perspective (IMP-EXP)
or the economics perspective (EXP-IMP), presents persistent deficits.
The general situation of the Portuguese economy, evaluated in terms of indices of environmental
support, sustainability and carrying capacity, although similar in 2000 and 2009, reveals a very low
system performance. Furthermore, the Portuguese government’s efforts to reinforce the use of
renewable energies, a significant reduce in emergy assigned to flows of imported fuel, capable of
shifting the economy to a growth path based on a larger weight of renewable resources, was not
achieved.
ACKNOWLEDGEMENTS
Research for this article was partially supported by FCT – Fundação para a Ciência e a
Tecnologia, Portugal, project reference PEst-OE/EME/UI4005/2011. The authors wish to thank the
awarded support by ISAER - International Society for the Advancement of Emergy Research.
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