Introduction

Abstract

Energy has been succinctly defined as ‘the ability to do work’. It exists in a variety of forms, mechanical or kinetic, electrical, thermal, radiant, chemical or nuclear, and all changes in a physical state, for example in production, require an input of one or more of these forms of energy. These two simple statements should be sufficient to indicate the fundamental significance of energy, and the economist who is concerned with the allocation of scarce resources between competing uses will inevitably have to consider either explicitly or implicitly, as part of this allocation problem, the energy transformations involved in the processes of production and consumption.