Energy and the Wealth of Nations

An Introduction to Biophysical Economics

  • Charles A.S. Hall
  • Kent Klitgaard

Table of contents

  1. Front Matter
    Pages I-XI
  2. I

    1. Front Matter
      Pages 1-4
    2. Charles A. S. Hall, Kent Klitgaard
      Pages 5-21
    3. Charles A. S. Hall, Kent Klitgaard
      Pages 67-80
    4. Charles A. S. Hall, Kent Klitgaard
      Pages 81-100
    5. Charles A. S. Hall, Kent Klitgaard
      Pages 101-120
  3. II

    1. Front Matter
      Pages 121-121
    2. Charles A. S. Hall, Kent Klitgaard
      Pages 123-150
    3. Charles A. S. Hall, Kent Klitgaard
      Pages 151-181
    4. Charles A. S. Hall, Kent Klitgaard
      Pages 183-207
  4. III

    1. Front Matter
      Pages 209-209
    2. Charles A. S. Hall, Kent Klitgaard
      Pages 211-226
    3. Charles A. S. Hall, Kent Klitgaard
      Pages 227-257
    4. Charles A. S. Hall, Kent Klitgaard
      Pages 259-276
    5. Charles A. S. Hall, Kent Klitgaard
      Pages 277-288
    6. Charles A. S. Hall, Kent Klitgaard
      Pages 289-296
  5. IV

    1. Front Matter
      Pages 297-297
    2. Charles A. S. Hall, Kent Klitgaard
      Pages 299-322
    3. Charles A. S. Hall, Kent Klitgaard
      Pages 323-360

About this book


In this updated edition of a groundbreaking text, concepts such as energy return on investment (EROI) provide powerful insights into the real balance sheets that drive our “petroleum economy.” Hall and Klitgaard explore the relation between energy and the wealth explosion of the 20th century, and the interaction of internal limits to growth found in the investment process and rising inequality with the biophysical limits posed by finite energy resources. The authors focus attention on the failure of markets to recognize or efficiently allocate diminishing resources, the economic consequences of peak oil, the high cost and relatively low EROI of finding and exploiting new oil fields, including the much ballyhooed shale plays and oil sands, and whether alternative energy technologies such as wind and solar power can meet the minimum EROI requirements needed to run society as we know it.

For the past 150 years, economics has been treated as a social science in which
economies are modeled as a circular flow of income between producers and consumers. In this “perpetual motion” of interactions between firms that produce and households that consume, little or no accounting is given of the flow of energy and materials from the environment and back again. In the standard economic model, energy and matter are completely recycled in these transactions, and economic activity is seemingly exempt from the Second Law of Thermodynamics. As we enter the second half of the age of oil, when energy supplies and the environmental impacts of energy production and consumption are likely to constrain economic growth, this exemption should be considered illusory at best. This book is an essential read for all scientists and economists who have recognized the urgent need for a more scientific, empirical, and unified approach to economics in an energy-constrained world, and serves as an ideal teaching text for the growing number of courses, such as the authors’ own, on the role of energy in society.
  • Includes several new chapters and comprehensive updates addressing the implications of hydraulic fracturing (fracking), access to energy and social inequality, as well as climate science and planetary boundaries
  • Integrates energy and economics by combining natural and social sciences
  • Uses predictive tools and measures, such as EROI, to show how the economy is embedded in a biophysical world subject to scientific rules and constraints
  • Provides a fresh approach to economics for those wondering “What’s next?“ after the Great Recession and continued volatility in energy prices
  • Offers economic analysis from the real-world perspective of peak oil, high energy prices, the role of alternative energy sources, and potential environmental impacts of energy use such as climate change


Alternative Energy Assessment Ecological Economics Book Economic Sustainability Economics of Fracking Embodied Energy End of Cheap Oil Energy Return on Energy Invested Energy Return on Investment Eroi or Eroei of Unconventional Oil Eroi or Erori of Alternative Energy Limits to Growth Oil Prices and the Economy Wealth Production Energy lack of economic growth secular stagnation

Authors and affiliations

  • Charles A.S. Hall
    • 1
  • Kent Klitgaard
    • 2
  1. 1.College of Environmental Science & ForestryState University of New YorkSyracuseUSA
  2. 2.Wells CollegeAuroraUSA

Bibliographic information

  • DOI
  • Copyright Information Springer International Publishing AG 2018
  • Publisher Name Springer, Cham
  • eBook Packages Energy
  • Print ISBN 978-3-319-66217-6
  • Online ISBN 978-3-319-66219-0
  • About this book
Industry Sectors
Chemical Manufacturing
Energy, Utilities & Environment
Oil, Gas & Geosciences