Question

Specify the meaning of the material balance principle?

Answer 1

1. The relationship between the economy and the environment is generally explained in the form of a “Material Balance Model” developed by AlenKneese and R.V. Ayres.
2. The model considers the total economic process as a physically balanced flow between inputs and outputs.
3. Inputs are bestowed with the physical property of energy that is received from the environment.

1. The interdependence of economics and the environment.
2. The first law of thermodynamics, i.e. the law of conservation of matter and energy, emphasizes that in any production system “what goes in must come out”. This is known as the Material Balance Approach or Material Balance Principle.
3. Moreover, all resources extracted from the environment eventually become unwanted wastes and pollutants. Production of output by firms from inputs resulting in the discharge of solid, liquid, and gaseous wastes. Similarly, waste results from consumption activities by households.
4. In its simple form, the Material Balance Approach can be put in form equation.
   M = G – R_C – R_P + R^r_P + R^r_c = R^d_c + R^d_c