Basic Economic Concepts of Cleaner Production

Abstract

The concept of sustainable development and cleaner production is based on an equilibrium that is described by Keynesian, Marxist or Neoclassical theories, and involves a transformation process of inputs to outputs, which is linear implying that more and more quantity of pollution and waste would be produced even if the processes were governed by deterministic laws that are reversible, leaving free market policy to resolve any barrier of bias. Also it is true that an incorrect application of entropic principle in an economic analysis leads us to a conclusion that the only way to reduce pollution and to save Earth, is to slow down the development rate, possibly to zero. Since the Earth’s resources, available to the humanity are limited, one may infer that it would be impossible for the people of developing countries to attain the standard of living to that of an average American. At best, this model of sustainable development could be viewed as a way of sharing the scarcity. In fact, an economic system is an open system that is driven by irreversible processes. If the entropy of the cycle is positive, the system degrades. If it is negative, the system grows or develops. Erkenntnis (knowledge+knowhow),one of the four factors of production is only able to break the entropic deviation of all human activities and pushes forward the economy to growth and development. A sustainable development should basically entail less and less exploitation of natural resources and more and more use of human skill.