Roegen-Daly school

In thermodynamics schools, the Roegen-Daly school or “thermodynamics school”, as it is called in ecological economics schools classifications, refers to the entropy views (or rather material entropy views) of the view of Nicholas Georgescu and his student Herman Daly (and to some extent Kenneth Boulding, among others), namely the very tenable view that entropy, in economic terms, equates to “value lost to waste”, and that this explains pollution, resource scarcity, unemployment, and depletion. American economist Mariano Torras summarizes what summarizes as the “thermodynamics school” of economics (or biophysical economics) as follows: [1]

“Economists from the so-called thermodynamics school offer perhaps the least optimistic view regarding sustainable development. They argue that GDP growth is invariably constrained by the first and second laws of thermodynamics (see, e.g., Daly, 1991a; Georgescu-Roegen, 1971). In other words, their framework takes into account the observation that economic activity cannot create or destroy matter-energy, only transform it (first law). Consequently, all matter-energy used by an economy must ultimately be disposed back into the environment. Yet for those who would pin hopes of sustainability on efficient recycling, the second law precludes such a possibility. It states that low entropy matter-energy (highly organized materials and energy flows) is transformed to high entropy matter-energy (disorganized and relatively useless) by the economic process.”

Here we see an example of the blind (Georgescu), leading the blind (Daly), leading the blind (Torras) into a delusional cul-de-sac (a slipshod, contrived, and essentially baseless matter-energy version of the second law taken as fact).

Likewise, P.A. Victor identifies four schools of thought on the environmental as capital issue: [2]

(a) Mainstream neoclassical school
(b) London school (after Pearce, Barbier, Markandya, and Turner)
(c) Post-Keynsian school
(d) Thermodynamic school (after Boulding, Georgescu-Roegen, Daly, Charles Perrings, and Mick Common)

a spectrum of views that is said to range from very weak sustainability through very strong sustainability.

References
1. Torras, Mariano. (2003). Welfare, Inequality, and Resource Depletion: a reassessment of Brazilian Economic Growth (§: The Thermodynamics School, pgs. 40-). Ashgate Publishing.
2. (a) Jansson, A.M. (1994). Investing in Natural Capital: the Ecological Economics Approach to Sustainability (pg. 268). Island Press.
(b) (b) Victor, P.A. (1991). “Indicators of Sustainable Development: Some Lessons for Capital Theory, Ecological Economics, 4: 191-213.

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