Economics is bound by the Second Law of Thermodynamics.

The Second Law states that entropy — the measure of disorder in a system — always increases. Energy only flows one way. Order becomes disorder. You can't unburn oil. You can't unscatter a mineral once it's been processed and dispersed.

In 1971, Romanian-American economist Nicholas Georgescu-Roegen laid out the economic implications.

Every time we produce something, we consume something irreplaceable. The coal that powered a factory is gone forever. The topsoil eroded to grow a crop won't rebuild itself in your lifetime. The rare earth minerals pulled from the ground to make your phone exist now as heat, slag, and scattered particles (Also, it leaves a giant hole in the ground). Useful order, permanently converted into disorder.

Physics doesn't offer a refund.

That insight spawned a policy idea called the entropy tax. Markets are good at pricing what it costs to produce things. They're terrible at pricing what gets permanently lost in the process.

Irreversibility has always been free. Entropy tax thinking makes us think about whether it should be.