Development of a biophysical economics module for the global integrated assessment model WORLD7

The WORLD7 model is an integrated assessment model. It includes a biophysical global economic model, based on first principles of physics and thermodynamics for consistency. In the WORLD7 model, revenue and profits come from extraction of natural resources, input of human labour, mechanization, automation, the effect of innovation and the conversion of natural resources by manufacturing to goods, work and services. Monetization takes place through market mechanisms and debt financing. The economic module includes capital stocks for resource extraction, industrial manufacture, social services, agricultural food production, military, speculation, real estate, consumer credits and illegal activity. These are linked to resource extraction, energy production, population dynamics, food production, manufacture of consumer goods and provision of services. It connects to environmental pollution with feedbacks and inputs to human health and climate change inside the model. The WORLD7 model was tested against observed GDP and GDP per capita for the period 1850-2015. The results were obtained from first principles and without calibration to any data time-series. The results show resource extraction as the root cause of economic growth, and that human labour and technology development depend on this. The results show that as resource extractions culminate, gross domestic product will culminate and decline.