  The observed proportionality between nominal prices and average embodied
energies cannot be interpreted with conventional economic theory. A model is
presented that places energy transfers as the focal point of scarcity based on
the idea that (1) goods are material rearrangements, and (2) humans can only
rearrange matter with energy transfers. Modified consumer and producer problems
for an autarkic agent show that the opportunity cost of goods are given by
their marginal energy transfers, which depend on subjective and objective
factors (e.g. consumer preferences and direct energy transfers). Allowing for
exchange and under perfect competition, nominal prices arise as social
manifestations of goods' marginal energy transfers. The proportionality between
nominal prices and average embodied energy follows given the relation between
the latter and marginal energy transfers.
