There are real limits to everything, because the universe has a finite mass and volume. But, that doesn't mean that it is not possible to engineer a working UBI.
In fact, most of the productivity increases are in industries where the value produced is not directly coupled to the resourced consumed. The software industry is a great example.
If production is not limited, then we can instantly transform our solar system into a Dyson sphere, right now. What am I not understanding, of this theory?
To produce a two ton truck, you need to use more than two tons of resource, that much is obvious. But how many resources go into the production of my copy of GTAV? Or my blue-ray of The Lord of the Rings? Or my viewing of a show on Netflix? The marginal resource usage is pretty much nil, just some electricity, paper of plastic. The resources expended in producing the work itself can be significant, but they are amortized among the many millions of copies.
Now obviously there are limits. Humans need physical stuff to survive, that's not going to change any time soon. There's a limit on the amount of actual stuff we can make. But there's no clear limit on the value of that stuff. We keep finding new ways to make little pieces of plastic or bunches of electrons in wires valuable all the time.
Those limits are constantly being pushed outwards, but they are not disappearing. Eventually, we might have cities and data centers covering the entire Earth, à la Coruscant. At that point, we will still be constrained by our ability to cool the system, by our ability to efficiently power it all with minimal waste heat, and by the speed of communications through congested networks.
That's the 2nd law of thermodynamics.
Corollary: accounting of costs, prices, and values is badly flawed.
Thermodynamics does not address value.
You might also want to consider Georgescu-Roegen.
There are two ways you can get that though:
1. You can harvest current-cycle solar, as captured or availed by PV, solar thermal, wind, hydro, (pipe dream / ineffective) wave energy, or biomass.
2. You can draw down an existing store of solar energy input deposited, with some inefficiency, as hydrocarbon fuels: coal, oil, gas (including methane hydrates, should you choose to go there).[2]
The difference is that in 1) you're deriving value from a continuing series of deposits, of approximately 84 terawatts,[3] or roughly 2,000 TWh (170 billion mtoe, 1 billion barrels of oil equivalent), an allowance shared with all other life-forms, and ecological / biospheric processes on the planet (we might care to consider those requirements before hiving of yet more for ourselves). The practical value derived remains a small fraction of the influx.
In the case of 2), you're spending down what is effectively an inheritance, at the rate of approximately 5 million times its initial rate of accumulation. This suggests that the spending-down is not particularly sustainable, even barring consideration of any other issues presented.
Of which I'm informed there are several.
The point remains that as you process that energy chain, each stage of the process leaves less useful or usable energy going out than came in, the balance being waste energy (entropy).
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Notes:
1. There's a very small contribution from non-solar sources, principally geothermal energy, a roughly 50-50 mix of gravitational potential energy of formation and radioactive decay, which could be considered sourced from the supernovae which enabled formation of the Solar System.
2. https://dge.carnegiescience.edu/DGE/Dukes/Dukes_ClimChange1....