Misuse of Thermodynamic Entropy in Economics

Entropy cannot be used as a measure of economic scarcity and references to the second law of thermodynamics in economics within this context ignore the fact that the earth is a closed but not adiabatic system. The earth interacts with external sources and sinks of entropy and the resulting global entropy fluctuates around a constant. There is no separate ‘anthropogenic’ thermodynamic entropy distinguishable from the ‘natural’ thermodynamic entropy. One can estimate the ‘anthropogenic’ part of global entropy production, but it is negligibly small and masked by uncertainties regarding the global entropy balance. Entropic reasoning in ecological and environmental economics is qualitative; it is not based on precise definitions of the thermodynamic system and boundary conditions. Georgescu-Roegen’s concept of high-entropy unavailable matter underlying his scarcity principle is erroneous, because the inutility of industrial waste is not connected with its thermodynamic entropy, which may be exemplified with the case of alumina production