The BioPhysical Economics Institute is a non-partisan, non-profit, multidisciplinary organization of scientists, economists, investment experts, corporate & project finance analysts and policy professionals, who are working together to bring the natural sciences into economic analysis and decision making. Specifically, BPEI aims to incorporate the analysis of energy efficiency into assessments of various strategies to reduce our reliance on fossil fuels, while supporting our natural habitats and human flourishing.


The Chambered Nautilus (aka “Sailor”) has been traversing the Southern Pacific Ocean for hundreds of millions of years. It adjusts the volume of fluid in its myriad chambers, managing its buoyancy hydrodynamically to dive or ascend through the water, whether in search of food or to escape predators. Now an endangered species due to overfishing for their logarithmic-spiral shells, the fragile existence of the Nautilus reflects man’s propensity to take more from nature than it gives in return.

Intellectual Inspirations

Charlie Hall (bio) had been writing papers on biophysical economics (BPE) since 1980, initially with Cutler Cleveland and Robert Kaufmann. Several were published in prestigious journals, such as Science, but had little impact on economic thinking or public policy. In the absence of outside interest or funding, Hall turned his focus to other issues, while publishing an occasional paper on BPE over the subsequent three decades. Then in the summer of 2020, something remarkable happened. Hall was approached by several individuals: CEOs from corporations large and small, as well as investment managers and analysts – even an economist. They had all reached the conclusion that the conventional neoclassical economics paradigm is inadequate, if not counterproductive, to understanding the world and solving investment problems – particularly those related to environmental impacts.

Those individuals found Hall (and the literature on biophysical economics) through his early papers, and through the recommendations of others who sought an alternative framework for understanding the problems of today’s world. One issue they confronted was the challenge of integrating DCF (Discounted Cash Flow) analysis with ESG (Environment, Social and Governmental) investment criteria. There are no explicit rules or formal logic governing the “E” in ESG, which can lead companies to make ineffective and unsustainable investments – and to wildly divergent third-party ESG ratings – making objective ESG investing impossible. The concept of “Energy Return on Energy Invested” (EROI) pioneered by Hall, and its companion, “Energy Saved on Energy Invested” (ESOI) offered the potential for a practical, general and rigorous set of investment criteria – grounded in the natural sciences.

Hall introduced these individuals to one another last summer, which quickly led to weekly zoom meetings and resulted in the formation of a new BioPhysical Economics Institute. Our objective is simple: to bring the natural sciences into economics and decision making. We hope to promote a better understanding of our society and our natural environment, to help businesses and governments to make better decisions, and to facilitate the transition to a truly green (not greenwashed) world.

At 77, Charlie Hall is astonished to see that ideas over which he labored for many years in relative obscurity, have found an audience at last.

Hall stands on the shoulders of two pioneering intellects who understood the role of energy in natural and human systems. Howard T. Odum (Environment, Power and Society) established the field of systems ecology, and Vaclav Smil (Energy in World History) revealed the critical role that energy has played in the development of human society. Numerous pathbreaking researchers have followed in these footsteps, including Herman Daly, who pioneered the field of Ecological Economics, Kent Klitgaard who, with Hall, explored the role of Energy and the Wealth of Nations, Reiner Kummel, who co-authored, with Hall and others, The Need to Reintegrate the Natural Sciences With Economics, Carey King who provides a modern perspective on the connection between energy, growth and social outcomes (see The Economic Superorganism) and Robert Ayres, who connected the concepts of Energy, Complexity and Wealth Maximization.

For these and other sources of insight, please visit our Resources section.

Invested in the Nature of Energy.