This book lies at the intersection of natural sciences, economics, and
water en- neering and is in line with the long tradition of
environmental economics at the University of Heidelberg. In the 1970s,
the Neo-Austrian Capital Theory was developed using the fundamental laws
of thermodynamics as a common language between the natural and social
sciences. Niemes (1981) integrated the dynamic and irreversibility
characteristics of the natural environment into the Neo-Austrian c- ital
theory. Faber et al. (1983, 1987, 1995) then extended this
interdisciplinary approach further to create a comprehensive, dynamic,
environmental resource model. Over the last 3 decades, the theoretical
foundations of environmental economics have been modi ed and there have
been an impressive variety of applications. This book aims to reduce the
gaps between economic theory, natural sciences, and engineering
practice. One of the reasons these gaps exist is because economic
assumptions are used to construct dynamic environmental and resource
models, which are not consistent with the fundamental laws of the
natural sciences. Another reason for the gap might be the distance
between academic theory and real world situations. Based on an extended
thermodynamic approach, the authors explain which economic assumptions
are acceptable for constructing a dynamic model that is consistent with
the natural sciences. In particular, the special role of water in the
production and reproduction activities will be considered as an integral
component.
