Natural Environment

Natural Environment Flow Diagram for Material Balace Approach The first law of thermodynamics, i.e. the law of conservation of matter and energy, emphasizes that in any production system “what goes in must come out”. This is known as the Material Balance Approach or Material Balance Principle. The material flow diagram implies that mass inputs must equal mass outputs for every process. Moreover, all resources extracted from the environment eventually become unwanted wastes and pollutants. Production of output by firms from inputs resulting in discharge of solid, liquid and gaseous wastes. Similarly, waste results from consumption activities by households. In short, material and energy are drawn from environment, used for production and consumption activities and returned to the environment as wastes. In its simple form the Material Balance Approach can be put in form equation. - - Environmental Economics M = G–(R C + R P ) + (R r P + R r c ) = R d p + R d c Material and Energy Inflow from Natural World (M) = Economic Activities of Goods and Service Production (G) -Consumption and Production Residual Discharges from Consumption and Production activities (R C +R P ) + Recycles from Production and Consumption (R r P + R r C ) = Final Residual Discharge from Production and Consumption into Natural World (R d C + R d C ) W & W = Waste from Prod and Household Sector, F=Final Product The Environment R (Raw Material) Production Sector R=F+W1 Household Sector F=W2 R=W +W (Input=Output) Economy ­— Environment Interlinkages Material Balance Model* Is it allright? Environment is the supplier of all forms of resources like renewable and non-renewable, and it is also acting as a sink for cleaning up of wastes. Households and firms are connected to environment, and they are interconnected too. Households and firms depend on nature for resources. Both households and firms send out residuals of consumption and production respectively to nature. Nature has the power to assimilate all forms of waste. But this power is conditional. There is a limit for everything. The earth has reached the - - Environmental Economics