A fundamental, though seldom addressed, issue in society today is the quality of information used by individuals and institutions in order to know and manage our condition, tendencies, and options.

In this context, information quality refers to the agreement between reality in any dimension and the meaning bound up in the ideas, concepts, and measures associated with that reality.

The specific question addressed here is the information signal quality of the indicators and measures of physical/ecological state and potential and cultural (including economics) value used in both day-to-day commerce and the more involved analysis and management of complex and dynamic systems behavior over time.

In the following, information signal quality is addressed as it is reflected in three aspects of our lives: energy measures, money measures, and the combination of money and energy measures. Each aspect has distinct characteristics with clear and critical implications in terms of our ability to know and serve our interests.

On August 29, 1859, the now legendary Col. Edwin L. Drake first struck oil near Titusville, Pennsylvania in the United States. Since that time, the current price of one million Btu of oil has ranged from a low of .089 cents in October 1892, to high of more than $6.38 in December, 1981. Of course, adjusted to the so-called "constant dollars" that allow for inflation, that 1860 oil would have cost $.01 cents in 1990 dollars. The 1860 price (adjusted for inflation)^ for a million Btu of 1981 oil would be $94.52.

Thus, since it was first produced in the U.S., the highest price of oil, not adjusted for inflation, was more than 70 times the lowest price. Adjusted for inflation, the highest price of oil was more than 9,400 times the lowest price.

Over all the time those energy prices were being set, the energy content of one million Btu was just that: one million Btu.

Physical measures such as BTUs can only vary in terms of the precision of the instruments and techniques used to measure the energy content of the oil.

This degree of economic signal distortion is easily seen as bizarre. Nevertheless, such price circumstances are common in a world seen over time through the money value dominated perceptual/analytical processes associated exclusively with economic analysis. Further, such numbers pale when the world's economies seen in a context set by global financial data.

The same holds for energy embodied in products and services of nature and those used by human society. Embodied energy is the accumulated energy consumed in the process of bringing anything and function to a particular time and place. Doing things differently relative to other times and places also means more or less energy is consumed and thus embodied in getting something done. Under any circumstances, using energy to account for what happens provides a relatively rigorous, objective measure, set by the physical, thermodynamically determined, nature of things. Based on physical values, there is a relatively narrow range of energy measures for things or processes in time and space, with such measures not easily distorted by human will.

Objective energy measures are distinctly and substantially different from the subjective abstract and symbol human values such as prices, which are affected by factors like: desire, appeal, want, perceived need, craving, passion, fear, ignorance, ambition, whim, or intimidation and other forms of compulsion. (Its worth while remembering Florida ecologist Arthur Marshall admonition about persuasion. He said it works at three levels: volunteerism, coercion, and force. Volunteerism is what humans do of their own volition, including working within the democratic processes, coercion is where humans use arms and military might, etc. to persuade; force is what nature does to move us in its ways.)

Against the highly objective measures associated with energy and other aspects of all systems, there are the ephemeral and highly manipulatable subjective economic factors, (orchestrated by the clever, the acquisitive, the charming, the downright crooked, the innocent, and the ignorant.) Unfortunately, such measures are often the primary indicator of the ways our economies are behaving and guided.

Such are the circumstances of prices, the completely subjective indicator of value as it is set in the marketplace by human buyers and sellers.

Thus, price is the necessary reflection of value humans place on goods and services in markets. While prices and the price setting mechanisms of the marketplace in all its diverse forms, are critical and necessary parts of human cultural interaction, we should recognize that prices are easily swayed by advertisement, style, (mis)perceptions of relative scarcity, public relations and other cultural manipulations of the human value process.

The critical difference between price and energy measures therefore, is that a price value is an abstract, subjective, cultural expression of what we humans think something is worth. In contrast, energy measures indicates one objective element of the physical nature of what some thing or condition is, was, and can be.

This difference between changing cultural values and relatively fixed physical measures for the same thing describes the fundamental problem of economics--and suggests an answer.

Going back to the issue of information quality, we can ask the following questions:

Ø How well does what we think about something relate to the reality of that thing?

Ø Is the information quality in our lives sufficient to enable us to function with a satisfactory level of certainty concerning our interests?

Ø How do we know what we know?

Ø What can we do to be better informed and reduce the uncertainty in our lives?

One avenue to addressing the uncertainty affecting the information quality of our society has to do with asking questions about the perceptual/analytical processes and associated measures and indicators we use. Such questions will let us discover the many choices for alleviating our uncertainties.

It is obvious from the inquiry into the nature of the science of analytical processes carried out so far, that those involved in the process of advancing such science and its uses by society:

Ø are seldom aware of, or intentionally ignore, the operational conditions and needs of the policy process, including the fact that policymakers and managers must make decisions--and their most immediate rewards are for doing so whether they have the right information or not;

Ø are confused about the differences and need for both objective and subjective information. (A product of analysis that represents the best expression of science, independent from what anyone wants tends to be objective. Analysis that deals with policy concerns reflecting values as expressed in markets, political arenas, and other realms of human culture can at best, still only be subjective.)

Ø are not subjecting analytical/perceptual processes they use to the same conditions as other elements of the management process. In other words, the relative merit of one analytical processes over another is seldom considered as an element of management quality. (This means policy and management operations are able to function in an extremely arbitrary manner--amplified by the very common tendency for managers to seek and apply those analytical processes that support their pre-existing interests, independent of what accurate analysis would indicate.)

Ø are using what many scientists are saying is a need for increasing precision, whether intentional or not, as a means of avoiding responsibility for pragmatic involvement in the advancement of more accurate analytical processes--to say nothing of more effective policy and management;

Ø are far too easily willing to sacrifice scientific objectivity, and the "bad" news it carries, as a cost for access to those involved in the policy process;

Ø are highly protected by cause/effect complexity and feedback delays reflecting the full consequences of current actions;

Ø are seldom willing to see how obtaining the best understanding of circumstances, in ways that are constantly learning, testing, and improving, is the only path to survival-worthy and satisfying leadership.

A critical aspect of the issue of improved analysis is the concept of relative merit as applied to the analytical processes and measures used to guide our actions. This concept relates to the relative merit of analytical processes, and provides an indication of, for example, where one form of analysis may not reach an ideal degree of certainty, but can still be demonstrated to be substantially better than alternatives.

Unfortunately, in discussions of the policy processes, there is virtually no discussion of the relative merit of the various analytical options. Lacking this discussion, a number of often easily avoidable circumstances lead to unnecessary uncertainty and loss of quality in the perceptual/analytical processes used in the policy, management, and operations process.

A solution to this problem comes with what I call the Subject/Analysis Matrix, or S/AM, which when fully developed, reviewed, and revised accordingly, can be used as a framework for assessing the relative merit of any perceptual-analytical process. With the S/AM, many of the questions related to the superiority of one analytical process over another can be managed.

In other words, it seems clear that:

Ø Measures which are bound by the conditions of (at least) both the First and Second laws of thermodynamics are "objective," because such measures do not change with human concepts of value.

Ø Measures which are not bound by the conditions of thermodynamics, such as money values like prices in the marketplace, are "subjective," because such measures can only reflect human concepts of value.

Ø Both objective and subjective measures are necessary to carry out human interactions with other humans and the resource systems in which humans reside and call upon for the full operation of their culture.

The issue is, therefore: what can be done to make sure that the most appropriate measures are used and understood in the most appropriate and unambiguous manner?

Energy is a physical measure of the condition, change, and potential of a thing to do work. While it is possible to build an accounting trail of energies consumed in a thing or process, as that trail of physical accounting goes into the domain of human abstract and symbol values, the aggregations become extremely complex and dynamic (although nowhere near as complex and dynamic as human value processes and indicators including but not limited to prices and markets.)

To provide an indication of physical accounting across the complete spectrum of circumstances related to human interest, the concept of Emergy was introduced by H.T. Odum. Emergy stands for the total amount of energy embodied in the creation of some thing or condition and bringing it to a certain place, state, and time. (Note: It is necessary to describe both the noun state--thing, and the verb state--action and condition, to cover all possibilities of existence.)

Emergy analysis provides a means of establishing a physical index measure of the quantity and quality of energy expended over time to get a good or service to a certain place and state in time and space. While Emergy will never be a measure with absolute thermodynamic precision, the number can be a substantially robust, accurate, and objective measure of the physical investment. Emergy measures will always have more objective characteristics than economic measures based on the interplay of money and markets. The main advantage of Emergy measures comes when market prices values and Emergy values are used in conjunction to establish both the economic worth as set by what people want and the physical characteristics, independent of market values, that provide measures of the actual physical work it takes to do something.

The Emergy measure has the following characteristics:

Ø It is an index of total energy consumed to bring a thing or condition to a certain place, state, and time in all domains of existence, whether they are physical/chemical, ecological, or human culture (which includes all our human abstract and symbol processes, such as those measured by economics.)

Ø Emergy measures indicate the relative utility of a thing or condition to the system in which it exists.

Ø Emergy measures indicate accumulations of both energy quantity and quality, where quality reflects the relative and variable concentration (energy returned for energy invested) of energy source consumed in a process.

Ø The Emergy measure indicates the relative merit of work whether the human value process is involved or not;

Ø Thermodynamics, particularly the accountability features of the First Law, underlie, but are not precisely reflected in Emergy measures.

Ø Because Emergy provides an index of relative worth that includes both "objective" and "subjective" dimensions, Emergy is not conserved as is energy in direct relation to the First Law of Thermodynamics;

Ø Emergy values can be derived for all phenomena, whether they are tracked by thermodynamics in physical/chemical and ecological domains--or have no thermodynamic measure--as in the abstract, symbol cultural domain of human activity, or are combinations of the two.

Ø It is important to note that the thermodynamic dimensions to abstract, symbol-related information has three components: 1) the carrier of abstractions and symbol processes; 2) the work done in the accumulation of abstract/symbol value; and 3) where abstract/symbol processes trigger physical events.

Ø However, no thermodynamic measure can be associated with the meaning bound up in abstractions and symbols themselves. (This is easy to test. A tape recorder has no change in physical characteristics other than the alignment of magnetic polarities and battery drain, whether it is playing random noise, a Mozart symphony, or carrying all the values of commodities traded on (for example) the Chicago Board of Trade in any period of time. An artist's present and aggregate metabolism to a point of time, as well as brushes, canvas, and paints, and all the work of culture over time can amount to a certain energy value. The product of a specific effort can be anything from random wall scratches or works with near-astronomical social values--yet the energy value of the abstract work does not change with meaning presented by the artist.)

Ø There is no substitute for the concept the Emergy measure seeks to define, regardless of what it is called:

¨ money and other human value statements only describes what humans think some thing or condition is worth,

¨ for some thing or condition to have human value, it has to be subject to the human value process (which is most often the marketplace, but can be any venue of human value setting, including the forced abstract processes of some economic analysis.)

¨ Attempts to stretch money measures too far into the domains of human interests which are driven by physical/energy/ecological forces must become, to the extent they reach into these domains, increasingly subject to error and loss of credibility.

¨ all things and conditions which have not been subject to human (economic) value processes, are simply not valued. (For example, the poor in human society are a marginal part of the market--until they try to meet their needs and take out their frustration by breaking social rules and conventions.) This produces the untenable and potentially dangerous situation where the relationship of things or conditions to humanity is changing, but such change is not sufficiently recognized by human value processes dominated by money and markets.

Ø The Emergy index makes a useful contribution to carrying out human affairs because it provides a relatively complete, coherent, and replicable measure of relative utility regardless of human value.

Ø Like when buying a pound of butter. The price tells us what society thinks a pound of butter is worth. Emergy values help us know, via one objective element of the physical nature of not only butter, but the total processes of its creation and delivery to the store, and reinforces our certainty that it is what we want it to be, and provides an indicator of its true value relative to all alternatives;

Ø The existence of an Emergy measure as a complement to economic measures such as money provides a complete, coherent, and if need be reference-able framework for establishing the dynamic value of any thing or condition in time, place, or state.

Ø Emergy measures complement human value processes by providing a physical/ecological frame of reference for things and conditions of importance to human interests, whether recognized or not.

It is my view that for determining the long term real behavior (and opportunity) in systems, the combination of Emergy numbers and prices can be used to indicate signal distortions, with the divergence between measures based on prices and those from Emergy indications becoming a useful and potentially accurate measure of both the state of a particular system at one point in time and quality of the information by which that state is known.

In other words, prices are critical for letting us know what people think, and for this, we must appreciate their messages. Prices also tell us where people are not thinking--and this too is important.

Comment:

The basis for the formulating Emergy numbers in use so far is not as easy, clear, and robust as it could be. Its not that the numbers, particularly the transformities, cannot be dug out of the existing documents, but that the whole process is unnecessarily open to error and argument--an unfortunate situation where the concept itself is at odds with and contrary to conventional, mainly economic, wisdom--the holders of which will--and have--used any excuse to dismiss the concept.

There is a need for a well designed and referenced catalog of Emergy measures. They should be established within a spread sheet format with detailed references, crystal clear and foolproof conversions (BTU to joules, square foot to hectares, etc.)

As one who has great difficulty with mathematical processes, no part of the number and calculation process should be taken for granted. This also has an additional use. If the process of doing Emergy models is made simple, transparent, and foolproof enough, it can be initiated with much broader audiences (thus fostering democracy) and at earlier grades in the education ladder.

I envision a highly secure web site (operated and maintained by an international secretariat) (also mirrored on a quarterly CD-ROM) with a framework for doing all transformity calculations. A page could be devoted to each transformity with a place to enter all data forms related to each calculation--in what ever units the original data can be found. All known transformities would be accessed from such hyperlinked menus. A pre-established format would be developed to enter the data and calculate those transformities which were peculiar to a certain place or circumstance. In a note section, all references for each data point would be described. This would reduce the development of a model to simply filling in the blanks on a form and inserting the time series or other data into a spreadsheet format. Building such a file and bringing it to an initial level of utility would be a no more than a month or so job for a few people expert in and using advanced spreadsheet programs like Lotus or Excel. (It would be critical to have the spreadsheet program be supported with a high quality data conversion processes, so data can be used more universally. It would also be important to address issues raised by those like myself who are "mathematically challenged," and need special considerations when working with the often very large numbers involved.)

I am working on a way of defining Emergy numbers for a large number of commodities. I have access to thirty year data sets for about a hundred kinds of what I see as key commodities in world trade. These are products like energy, cereals, lumber and metals which have long and very carefully studied prices and reasonably good energy measures. (Note: The commodity data were initially based on the World Bank international commodity database, however, I am also finding many other sources for such data and will bring these into the process as soon as possible.)

Existing read/write CD ROM disk technology means we can put together large (650 megabyte, with 4.2 to 17+ Gigabyte coming in the DVD disk format) customized databases--to say nothing of the capabilities we have to day through the use of Internet. Most historical data is now or soon will be put into electronic format for inexpensive accessing. In the spring of 1993, the World Bank released its "Stars" series databases on CD ROM. This database holds 30 year histories of 1600 records on 160 countries. The U.S. Geological Survey is now selling the Digital Maps of the World, which contain 1/1,000,000 scale maps of the entire world in a highly manipulatable digital format. Others are building catalogs of the availability of data. For example, Ken Watt and I have been building historical price, inflation, GNP, etc. numbers going back to the early 1780s. All of this is coming together as a good reference base of sources, publications, and experts in the field of commodities and prices. (There is, of course, the need to build a data identification, classification, and reference system so we are able to access the great variety of data we need in a more effective and credible manner.)

It is important to explore establishing Emergy base numbers for major world trade commodities first and then, where possible, working on up into the more abstract good and services in our society, such as accounting, government services, advertising, science, and the arts.

One approach may be to take the average product prices adjusted for inflation, perhaps for the years 1950 to 1965 and relate these prices to an energy/GNP ratio. This would be further adjusted by allowing for M2 money supply and a "funds transfer factor," (both which began an unprecedented acceleration with the advent of electronic funds transfer systems after 1965) which would be used to adjust for funds movements and volumes which reflect faster velocity but are not tied to any goods or services--other than pure financial manipulations. As this system of data access is developed, it should also be possible to find ways of dealing with national economies with highly volatile exchange/inflation rates.

The characteristics of systems components and behavior described by Emergy measures (or some even more effective alternative) are going to be increasingly critical components of more coherent, complete, and competitive analysis. The above suggests we should look for ways to clarify Emergy procedures, problems, and opportunities. The sooner we turn the Emergy concept it into a workable perceptual/analytical tool, the sooner we can use it with confidence to address the great and growing uncertainties around the problems we are experiencing today.

There is a side note to all this. Democracy works best when the knowledge of what is, can, and will be done is most shared by the all the people. Over the past twenty years, the fundamental data by which our and world economies operate has increasingly become available through “market” processes rather than as a normal function of government. This is massively counterproductive to the progress of both public and private interests.

I end by asking the following:

What's wrong with the above?

What's missing, or should be?

Are there other ways of doing this?

How can it be done better?

What else can be done?

What can be done to get the widest cooperation possible from those who would want to use this, and avoid non-productive criticisms?

What can we do to know the good and the bad in the above in a more timely and effective way, so we are more able to make intellectual progress in the future?

And finally, what's right about it--what can we do and use right now to avoid problems and lay the groundwork for a more beneficial and satisfying future?

Thomas A. Robertson

529 10th Street, SE

Washington, D.C. 20003-2807

Phone: (202) 543-7545

Fax: (202) 543-7622

e:Mail: t1r@bellatlantic.net

The Emergy Concept - Working Notes