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Environmental Resource and the Economic Use Loop

Description:

This model is an example of an environmental product being used in an economic process. The product - forest wood, fish ou nuts - is produced by the renewable energies of sun, rain and wind. The product accumulates. To process the product for sale, money is needed to buy and sustain equipment and labor. As the product is sold, the money received is used to buy goods and services needed to continue the processing.

Examples:

This model is appropriate for any sealable product which grows without human assistance - windflowers, natural honey; forest products like rubber, resin, turpentine, wood, fruits, nuts; marine products like fish, lobsters, clams, coral shells.

 Diagram

Variables:

Q = product
A = equipment assets
M = money

Equations:

R = I0/(1 + K0*Q)
E = K4*A*Q
DQ = k1*R*Q - K2*Q - K3*A*Q
DM = PE*I - K5*M
DA = K5*M/PG - K6*A - K7*Q*A

Simulation:

The graph shows the changes of M(red),A(green) and Q(blue) over a time period.
Source code: Econuse.java

"What if" Experiments:

  • What difference does a 10% increase in the price of goods and services make?
  • If the environmental resource is scarce, sales are less. Can the user stay in business? Change I0 to half.
  • How vulnerable is your business to the price you can get for your product? Halve PE and then double it.
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