Peter Victor: Sustainable Horizons

Peter Victor, Professor Emeritus and Senior Scholar at York University, Canada and author of Escape from Overshoot. Economics for a Planet in Peril (2023), looks at the intersection of ecology, economics, and sustainable living, diving deep into the historical roots of our current environmental dilemmas.

Peter explores the impacts of economic growth and the concept of overshoot, delving into the complexities of ‘green growth,’ and grappling with the hurdles of achieving net-zero emissions on a global scale. Peter takes us through concepts aimed at a fair distribution of wellbeing resources such as ‘contraction and convergence’, ‘circular economy’ and ‘steady-state economy’.

The episode takes a positive turn when Victor shares his vision for a wellbeing-focused political landscape, concluding with optimism about achieving balance in economic theories to avoid overshoot. 

Voiceover 1:
I mean, unfortunately, our economic system is just a by-product of a capitalist society. The greed of people with money, that want more money from those who don’t have the emotional willpower to think otherwise. The government has to be responsible for what goes where, what’s used, what consumed. 

Voiceover 2:
Yeah, it’s really difficult because it makes me feel really a lot of despair, about us in the future and about the way that I plan my life around having a family. Like, do I even want to do that? Do I want to put someone into this world? Like, there’s a lot of stress around the future for me, but then at the same time, it kind of leads me to feeling numb about it because there’s so much stress about it. 

Voiceover 3:
So, I feel angry about how our greed and capitalism is ruining the world for us and for future generations. It makes me feel crazy. Whatever we do as individuals or even as communities might be helpful at the local level, but not that kind of saving the whole planet. We are heading towards a disaster. Maybe it might not happen in my lifetime, but we’re getting there and we are doomed as species.

Carl Schlyter: 
Many people feel overwhelmed by the fact that the levels of consumerism and overconsumption, particularly in the Global North, are eating up the earth resources at an increasingly unsustainable rate. This is Systemshift, and today we explore what we can do to reverse ecological overshoot, a concern that resonates with the very heartbeat of our planet Earth Overshoot Day falls earlier each year as humanity’s ecological footprint surpasses the Earth’s capacity to regenerate resources and absorb waste. Last year, it fell on August 2nd, and I can guarantee it will fall an even earlier date this year. It’s a critical measure of how our collective actions impact the delicate balance of the biosphere, and it’s a concept that demands our attention. Today we are joined by Peter Victor, a leading expert in ecological sustainability and economics. Peter is professor emeritus and senior scholar at York University in Canada. He was founding president of the Canadian Society of Ecological Economics, and is a past president of the Royal Canadian Institute for science. In the 1990s, he even served as Assistant Deputy Minister for the Environmental Science and Standards Division in the Ontario Ministry for the environment. Today, Peter maintains an active research program as a co-investigator in the centre for Understanding Sustainable Prosperity and through the Ecological Footprint Initiative at York University. In this episode, we embark on a journey through the intricacies of economic growth, ecological overshoot and the pursuit of a wellbeing economy. Peter dissects the historical roots of our environmental challenges.

Questions a conventional pursuit of endless economic growth, and explores the alternative models. Discover how balancing progress with environmental sustainability is not just a possibility, but a necessity. So, without further ado, a warm welcome to you, Peter.

Peter Victor:
Thank you, Carl. I’m very pleased to be here.

Carl Schlyter: 
Yeah, it’s so nice, I actually read some of your books many years ago already, and now you’re here. So, let’s kick this off. But I mean, yes, you have been doing so many things over the years. What’s the last week, what have you been up to, then? 

Peter Victor:
Well, the last week was a very special week as it turns out, I was the host of a visit from Iceland. A professor there with whom I’m co-directing a major project on the ecological footprint. And so, we had a wonderful week of meetings and social events, and so. I just wish life was like that all the time, but that was a very special week. 

Carl Schlyter: 
And ecological footprint, what does that mean?

Peter Victor:
So, the ecological footprint is a measure of the impact that humanity makes on the biosphere. And you can think of it in global terms, all the way down to the individual, which makes it a very, useful way of measuring our impact on the biosphere, because sometimes we want to discuss what individuals can do to reduce their footprint, what nations can do, what continent can do, and what the global population can do. So, this is a measure that’s been around for about 30 years. And now my university, we estimate the ecological footprint for every country in the world. And we do that every year. And it’s all out on the internet. Everybody listening can check the ecological footprint of their country and, and the world. And we also measure the bio capacity, the capacity of the planet or any area of land to support the ecological footprint. 

Carl Schlyter: 
And that is not constant. And this is a worrying trend we have seen lately. 

Peter Victor:
No, it’s not constant. The biocapacity part is actually quite difficult because humans can increase biocapacity, as well as reduce it. But the general trend is a reduction in biocapacity at the same time as we are increasing the burden, we’re placing on the planet to support us. That’s why we, some of us, myself included, say we’ve entered an era of overshoot because we’re putting more pressure on the biosphere, more demand on the biosphere to support us than it’s capable of providing. 

Carl Schlyter: 
And the title of your latest book at least, is, Escape from Overshoot. And that’s actually the subject of today, more or less. But before we go there, we should have a look at how we ended up where we are. What are the mechanisms behind this constantly growing overshoot?

Peter Victor:
Well, it’s a simple question to ask in a difficult question to answer. I would say in my own mind, I go back to the birth of capitalism, which changed dramatically the way the system works. And since the theme of this discussion is system change, it’s worth noting that, if we think of pre-capitalism in Europe, through the feudal society, people are serfs working for their lords. And, were not free wage labour emerged out of feudalism because merchants started getting established in cities and they needed to a different arrangement. They weren’t lords, they had to hire people. And gradually the merchants accumulated wealth, which they were able to invest in factories. And you have the birth of capitalism through that transition from feudalism to something very different. The question then that you asked really comes down to, is it in the nature of capitalism to continue to expand, to continue to increase the requirement for materials and for LNG to transform land from wild to, human controlled and so on? And many people answer that question. The affirmative. Yes. It’s built in to this economic system we have. And when it faltered, as it did so seriously in the 1930s, I’m coming to more recent times, you realise here.

Carl Schlyter: 
A quick leap there, yeah.

Peter Victor:
What was then a well-established capitalism system in countries like the UK, much of Europe, the US and so on, fell into a sustained period of deep, deep unemployment. economists have a very good explanation of this because they believed really there’s lots of unemployment. Wages would go down; employers would hire more people and the system would somehow recreate full employment. And that’s when this incredible economist, John Maynard Keynes, came along and said, that’s the wrong way to think about it. The problem is that there’s just not enough money being spent in the economy to demand the goods or pay for the goods that are required, and therefore to employ the people to make them. And so, he suggested that the government should do what it takes to boost aggregate expenditure and resolve the unemployment problem. Now, here’s the interesting thing. And it comes really centrally to the discussion today, is that he was only thinking of that as a short-term problem.

Let’s boost expenditure, reduce unemployment. But after the Second World War it became a great concern to a number of economists that if the government boosts the economy and that includes building more factories, more roads, more harbours, all of those things, then that’s going to require even more expenditure to keep all of that employed in the future. We get into this situation where you have to keep spending to keep people employed, and part of that expenditure expands the capacity of the economy. And so, expenditure has to rise again and by expenditures. Just another way of saying what gross domestic product is gross domestic product can be measured as the total expenditure, of goods and services in the economy. So, this seems to be the situation we’re in now. We’ve become very dependent on economic growth to keep unemployment reasonably low. We’ve also redefined the meaning of progress as just the final thing I’ll say in answer to your question. Progress, when it was first talked about in the way that we might understand back in the mid part of the last millennium, because there was some evidence that things were changing. maybe changing for the better. we had, science and technology coming in and so on, some experience of improvement and living standards. But it went from a very broad concept, including social and ethical dimensions, as well as what we would consider purely economic.

But now we think of progress almost exclusively in terms of economic growth, expand the economy. And then whatever problem we’ve got, we can solve it because we’ll be rich, then we can buy our way out of it. The downside of that, of course, going back to your question to me on overshoot, is that that very process has led to this increasing burden being placed on the planet. And now we have a real dilemma. How do we escape from overshoot but still find a way of maintaining good living styles for lots of people? Everybody ideally, and that’s what my book is really about. How do we escape from overshoot and maintain well-being, not just for humans, but for all other species as well? 

Carl Schlyter: 
I think that’s a really important thing, because when you talk about GDP, a lot of things are left out. If this growth is based on increased hatred or love makes no difference, if it’s based on, things that destroy nature or regenerate. Well, in the short term at least, you can’t see any difference. And then when you degrade a system, you will see an economic effect too. But there are so many things in the measurement itself. An unpaid work, for example. Or charity work is not there at all or housework. 

Peter Victor:
And there are also things included that we can be pretty confident and not really indicating that we’re getting better off. So, for example, if crime rates are going up and so we spend more money on police and on extra protection, that sort of thing, well, that all goes into GDP, but it’s not a sign of improved well-being. It’s a sign of the opposite. Now, it’s worth noting that the person who did the most to really develop GDP as an idea and as a measurement was an American economist called Simon Kuznets, who in the mid 1930s did the original work on the measurement of GDP. And he made the point that do not judge the well-being of the United States through this measure. He said it explicitly. It’s not a measure of welfare. It’s a question of if you want growth, growth in what? Something’s good somethings are bad. He was there right at the start. And unfortunately, his message is lost, his message is forgotten.

Carl Schlyter: 
Not only forgotten, rejected completely. I mean, 85 years later, most political parties in the world see that as the measurement to measure if they’re successful or not. 

Peter Victor:
Yes, I’m afraid that’s true. But I do see some slight changes happening. For example, I saw a new website out of the province of Quebec here in Canada, where they’re working on a set of wellbeing indicators. It’s not just one, it’s closer to about 70, I think, because they want to make the shift that many of us have talked about, but not been able to achieve, away from directing their policies towards increased growth, to increase well-being and measuring different things will help that. 

Carl Schlyter:
Already 2009, when I was a member of the European Parliament, the Commissioner for environment, Mr Potočnik, then introduced beyond GDP concept where he wanted to have 15 other indicators that we should measure progress against and still keep GDP, but at least, you know, level it out with other measurements. So this talk about measuring other things has been there for a long time. But the policies haven’t really followed. 

Peter Victor:
And I think the way I see it, and I had two periods in my professional career working in the government of Ontario as an economist, the senior civil servant later on, and when I was a senior civil servant in the Ontario government, one of the things that I had to come to terms with that anything that the Ministry of Environment proposed was tested against what it would mean for economic growth. Sometimes that was for employment or for productivity, but it can all be wrapped up in this, a desire to make the economy grow faster. Whereas, anything that came out of the one or other of the economic ministries, didn’t have to be tested against its environmental implications. So that was is built in imbalance, in the way the policy was developed and evolved. But I also do believe that the work that is going on, has been going on, as you mentioned, for a long time, actually, well before 2009, on better ways of measuring what really matters is important because unless we can do that, the pro GDP growth argument always wins out. Because it sounds so simple. We’ve got to have more growth. I would submit that most people who promotes the growth of GDP don’t really know what is made of. They will say it’s very important that we have it. 

Carl Schlyter: 
But then also I think it’s interesting, if you go even one step further there, you measure what’s on your mind. So, it’s this mindset, I think it’s interesting. In your book, you talk about the view of nature as, production machine as in Nature Capital and so on. I think how we view nature is also a key here and changing what we focus on.

Peter Victor:
Yes, I agree with that. Well, the first thing to realise is that economists, by and large, when they conceive of the economy, they conceive it as independent of nature. You can look at, the simple diagrams that are presented to students of economics which show how governments and, businesses and households interact, employing one another, spending money, that sort of thing. But nature is invisible. It’s not there, but none of this economic activity can happen without obtaining materials and energy from nature. And at the same time, because of fundamental or physical laws, whatever we take for nature doesn’t disappear. The laws of conservation don’t let that happen. So, we can trace now where that material and energy goes, and eventually it virtually all goes back into nature. And the more we extract, ultimately leads to more disposal. That’s the problem we’ve got ourselves in. And if we think of the economy and we pay no attention to what we call throughput, the throughput of materials and energy, and I would add to that the transformation of land, we’re bound to make terrible mistakes in terms of policy, because we’re discovering we’ve caused effects that we never anticipated because they were outside our framework.

Carl Schlyter: 
How would you define Throughput?

Peter Victor:
Throughput is really a contraction of input and output. So, if you think of the input of a tree going into a pulp mill, the output will be the pulp that comes out of the mill, plus all of its waste product. So, we use the word throughput to remind ourselves that all physical inputs do become outputs of various kinds, some we want and some we don’t want. So, the term throughput is both a combination of input and output. 

Carl Schlyter: 
And both wanted and unwanted products. 

Peter Victor:
In the sense that the output includes, yes, wanted and unwanted. And here’s the thing. European countries all track the material throughput. We’re behind over here in Canada, but I bit on the Eurostat database and I’ve looked at all that data for European countries. Very impressive.

Carl Schlyter: 
Well, at least we did one thing right. But if you look at the data and how we increase this throughput of waste and other things, that’s not so uplifting though. And also, I mean, logically, because the throughput when we had protocapitalism a few hundred years ago, these merchants that escaped serfdom and tried to make some profits in dealing and willing with that shudder, still then the limiting capacity was our capacity to transform nature into something that made life more comfortable. But today we have this concept of full world economics compared to empty world economies that they lived in. And I think it was Herman Daly who introduced that term. But, could you explain a little bit the logic, the difference between a full world economics and an empty world economics space.

Peter Victor:
Yes. Well, you’re quite right to attribute that to Herman Daly. By an empty world, which is a strange term in a way, but he was simply using it to emphasise that for most of human history, humans were a small player on the planet writ large. Oh, they had local effects and regional effects. In terms of global impact, the humans were not really responsible for anything at that level until quite recently. So, he talked about that as an empty world, but he was thinking of the physical flows of material and energy from nature through the economy back to nature again, and then recognising that things have changed the scale on which our economies function, requires so much more material and energy and produces so much more waste and transformed so much more land that he said, we now have to recognise that we live in a full world, a world in which, we’re 8 billion people. I mean, there’s one estimate that plays on my mind a lot. And that is if you way all the mammals living on planet Earth, only 4% or so are wild. The other 96% are either human, we’re about a third of the total, plus the animals that owe their existence to us because we breathe them and eat them.

Carl Schlyter: 
Yeah, of land-living mammals and that is an interesting graph I recommend people to look up, it’s quite shocking when you see it. 

Peter Victor:
So just to say a little bit more about that, what Daly taught us, because he really pushed us very hard in his life was that our policies need to change to recognise that we’re now in a full world, maybe an overly full world. And that’s one of the big policies challenges, because it’s hard to think of policies which will reduce the material and energy throughput that don’t lower the rate of economic growth. And there are exceptions. There are some where you could say do both, but by and large, it’s not likely to be very good for economic growth. 

Carl Schlyter: 
Well, let’s tackle this green growth theme that is so popular.

Peter Victor:
Yes, it it’s popular. It’s one of many terms that people may have heard. We hear about inclusive growth, pro-poor growth, equitable growth, sustainable growth. All of these are adjectives put in front of the word growth, which remind us that not all is well with growth, because if it was, we would need to say, well, there’s a certain kind of growth that we could still pursue. Green growth is perhaps the most popular, certainly within environmental discussions and basically it says that we can have economic growth, increase quantity and value of goods and services that we buy, at the same time as reducing the impact that our economy makes on the environment. And we most often hear about this in relation to climate change. So, what it translates into is that we can increase GDP at the same time as we reduce greenhouse gas emissions. But even that’s problematic because of something we call the rebound effect. Where if you make something more efficient in a capitalist economy, that can also make it cheaper. So, the output of that more efficient process is, is a cheaper product. Well, what do people do when confronted with cheaper products? They typically buy more. And so, the total output of this more efficient production process can actually be an increase in material and energy requirements in total.

Carl Schlyter: 
Yeah, I think there you can like ask people to think about when they visited their grandmother’s home when they were children, as many years ago as you can remember. You will see the difference in how that house and probably your house you’re living in today is lighted, for example., that now we have very efficient LED lighting, so you will see that we have much more lamps and they are used more hours per day. So, in many economies the share of the household used for electricity, used for lighting is actually not going down, despite the fact that, lamps use a fifth or even less of energy compared to before. That’s an example of the rebound effect.

Peter Victor:
That’s a very good example. So green growth in relation to climate change can be understood as follows that the GDP keeps rising, greenhouse gas emissions keep declining. One of the useful measurements to understand what’s entailed is greenhouse gases per dollar of GDP. Because there’s lots of evidence to show that you can have a reduction in greenhouse gases emitted per dollar. But the question is, can you do it fast enough to compensate for the pull in the other direction, which is more and more dollars, more and more GDP. And a lot of governments have committed themselves and businesses to net zero, which means at some point in time, 2040, 2050, perhaps a little earlier, a little later, they’re saying we’ll have zero greenhouse gas emissions when you take account of the reduced greenhouse gas emissions per dollar and the amount of any residual greenhouse gases that we can sequester underground or counteract by planting more trees. Now, the problem with that approach is that climate change is not the annual emission of greenhouse gases. It’s the accumulation of greenhouse gases that causes the problem. And so just to say you’re going to get to net zero 30 years in the future isn’t good enough because so much depends upon the path that you take together. In other words, the emissions per dollar and economic growth over that intervening period. So, you could have greenhouse gas emissions, not take a ridiculous gaze. No change at all for, say, 29 years. And in the last few you get down to zero through some magical technology.

Well, the amount of greenhouse gases that would have been added to the atmosphere in that period, if there’s no reduction on an annual basis between now and then, it would be enormous. So, what we can do is we can calculate how fast would we have to reduce greenhouse gas emissions per dollar if the economy is growing at 2% a year, just to take any, reasonable amount and you find it would have to be like 10% a year. In other words, the greenhouse gas emissions per dollar economy wide, whether that’s Germany, Canada, the US would have to be about 10% a year. Well, I took a look at the data that the World Bank publishes, and not a single OECD country, except Romania, has ever reduced its greenhouse gas emissions per dollar by 10%. For more than three years, going back the last 30 years. And now we’re saying we’re going to do it over the next 30 years, roughly every year in a row. Well, it’s just not happening.  So, the green growth promise, I think is a bad distraction. 

Carl Schlyter: 
And I would like to add two more dimensions there, because when we talk about this, we normally talk about national emissions. If you look at consumption-based emissions from many rich countries they are obviously higher. We import a lot of things produced in low-cost countries and a third aspect here is, for example, my home country, Sweden, we have reduced our emissions with 37%, our national emissions since 1990, but actually we haven’t reduced them at all if you calculate the increase of biogenic emissions. So, our combustion economy is exactly the same as 1990. So here you also have a false mathematics to.

Peter Victor:
Yes, well that’s a very, a sad piece of information you’ve provided. I wasn’t aware of that because many of us looked to Sweden as a good example of how to run an economy and have a good life and pay attention to social justice.

Carl Schlyter: 
Sorry for ruining that, but you should come and visit our forests and you see what we have done with them. But that’s exactly what you mentioned actually, earlier today you talked about something called reducing the throughput. And this is exactly what I’m talking about here. We replaced fossil throughput with biogenic throughput, that had other consequences for nature, biodiversity, land use and so on. And this is where we need to have this also challenging of the concept of green growth, I think.

Peter Victor:
You know, once we understand the appeal of green growth, which is we can have economic growth and take care of the environment. So, let’s get on with the next problem, because we know how to do with that one. One, we realise that’s not a viable future. We have to then think about, well, what are the alternatives. And this going back to the to the idea of the full world, I don’t think there’s any alternative that doesn’t entail a deliberate reduction in throughput. And that implies limits, countries and nation states, because that is still a world of nation states, introducing regulations which require an absolute reduction in materials extracted from the ground and other places, in accordance with some planned, reduction that will bring us back into balance with the biosphere. But you can imagine, I’m sure, people listening in and realise that those kinds of measures are very hard to implement. Because Canada, we have a big mining sector, it employs a lot of people, the governments are always trying to find ways to expand and encourage mining. So, to turn that around, just that little slice of the pie is enormously problematic. 

Carl Schlyter: 
And then different countries have different challenges also because like in the Global North, our demands to reduce emissions is much higher than the Global South that both literally and historically have, a different, baseline, so to speak. So, in your book, you talk about this, that the demands on the Global North should be different than the Global South also, you talk about convergence, and emissions reduction. 

Peter Victor:
Generally speaking, the richer you are, the more you’re able to protect yourself against the bad effects of, whether it’s climate change or soil deficiencies so the food prices go up, water shortages and so on, things that we’re seeing. So, the inequality that exists is a further consideration. So not only do we need to reduce throughput, which is likely to prevent us getting the kind of economic growth we used to may well require reduction in economic output.  Now, you’re quite right, I was drawn towards this concept of contraction and convergence as a sort of an ethical principle for defining a way forward, and what it means is that those of us, whether that’s nationally or individually, whatever groups you want to talk about, that are well above any kind of sustainable level of throughput that’s serving them, that has to contract. And those below a long-term sustainable level can expand within limits. We have to make some of what we call ecological space for poorer people. And so, we eventually way into the future, I have to say, can converge upon some level of material and energy well-being. Culturally, there can be enormous differences, but the extent to which we draw on the planet or resources should be more or less equal among all of us. 

Carl Schlyter: 
And that’s why in the global environment movement today, this just transition is so key for success, because that’s the only way to get to global solidarity in this process. And we have many alternatives, let’s talk about alternatives. We talk about steady state economics. We talk about circular economy, wellbeing economy, Doughnut economy. There are so many propositions here. So, do you want to mention a little bit like the pros and cons of different theories and what they leave out and so on, and shall we start with the circular economy?

Peter Victor:
Yes, why? I don’t like to criticise any of them because they’re all moving, trying to move in what I consider the right direction, and none of them have the complete story. That’s why in the book I describe about 7 or 8 different ones and you mentioned some, but that said, the circular economy is as a bit of a curiosity to me because you can’t have a circular economy, you can’t take materials from nature and use them and reuse and reuse forever. They degrade and this is particularly true with energy, and energy can’t actually be recycled. Every time we use energy to do work, it’s capacity to do work declines. This is the so-called second law of thermodynamics. So, we always have to keep finding new inputs of energy. Now we’ve got the sun up there, that’s going to be there for a long time, delivering energy to the earth. So, we’re not just having to require and things we dig out of the ground. And that’s why we’re working hard, in some cases, to transition to a much greater dependence on solar and wind. But none of these things work without problems. For example, with solar, the energy is free, but the materials need to make use of it are scarce. It has to be obtained from the ground, the steel, the aluminium and the rare metals and so on. I think it is fairly clear. We’re not going to be as likely to get as much useful energy from renewable sources as we’ve been able to get from fossil fuels for the last couple of hundred years. And that’s just another reason why I, for one, don’t think we can sustain the kind of material throughput that we’ve become accustomed to because materials only become throughput when energy is used to make that happen. Whilst we cannot have a 100% circular economy, we certainly can move in the direction of circularity. So, I understand its appeal to people because it’s not difficult to say, okay, well, how will we use materials more efficiently, recycling? We can do better design of products. We can also make goods more durable. We can share more things. These are all circular economy initiatives that are promoted, are now being implemented in many parts of the world. I’m all in favour of that. 

Carl Schlyter: 
I think it’s important what you said here that, many people have the misconception that circular economy is about recycling and reusing. No, it goes beyond that. It’s changing business models, sharing and so on. So that’s other parts of it. But when you talk about material degrading, for example, pulp fibres that you can just recycle them up to a maximum of seven times, then they are too short to be reused.  And some products are inherently impossible to align with the circular economy. For example, a car tire. It will be worn out when used normally. So, we have an economic system and whatever economic system we have, we will never be able to have it totally circular. So yet again, we come back to what you mentioned before, Throughputs. And if we compare throughput to a steady-state economy, what would happen then?

Peter Victor:
So, the idea of a steady-state economy is to keep something steady and Herman Daly again has written the most about this, offered as two sets of things we could hold steady. One is we could hold steady the built capital of our economy. So that means the infrastructure, the buildings, machines and the population, at some level, that could be maintained at the lowest possible throughput. That’s consistent with what, the environment can support. So, in that version of the state economy, you’re holding capital stocks, if I can use that term capital just for population, just for the moment, you’re holding those constant whilst you minimise throughput. Later on, I think a better definition and that is that we should hold the throughput constant, at levels consistent with what nature can accommodate over a long period of time and allow the population of people and the capital stocks the things we may vary provided we hold the throughput constant. And the reason I think that’s better is because the majority of environmental impacts of what we do come from throughput rather than a building that’s standing there, sitting there on the ground, it’s the gasoline that’s burnt in the cars that go on the highway that are doing us the biggest problem. Not saying the highway when it was constructed didn’t involve environmental impacts, but it doesn’t compare in my mind with the throughput of the of the gasoline, so on. 

Carl Schlyter: 
Or for example, the energy use of the building while standing there for 100 years.

Peter Victor:
That was a very good example too. So, when I think of a steady-state economy, it’s trying to come to a view on what level of throughput of material or energy can be supported over the long term, and how then, can we as humans live the best lives possible within that constraint?

Carl Schlyter: 
So, the ideology behind that is, okay we identify nature’s carrying capacity, and then we make that as a system limits for the economic throughput?

Peter Victor:
Broadly speaking, but as we said, I think right at the start of this discussion, nature’s kind of capacity isn’t constant. Humans can vary it.

Carl Schlyter: 
Yes, absolutely. 

Peter Victor:
Irrigation, for example, makes land more productive and so on. 

Carl Schlyter: 
And then we have something that we have already had an episode this season about a wellbeing economy and how that is defined. How do you see a wellbeing economy being defined?

Peter Victor:
Well, a wellbeing economy is an economy that is intended to generate well-being. It’s much tautological, but that’s given away in the name. But it says that when we’re deciding what to do, what policies government should pursue, what industries should be encouraged, what should be discouraged, the criteria should not be economic growth. It should be what constitutes to well-being. And there’s been a lot of research on what contributes to well-being and what doesn’t. And, even without research, just from people’s own life experiences, you can develop a view on what really adds to your wellbeing or what doesn’t. so, a wellbeing economy is one that is, generates well-being. And by the way, does it in a socially just fashion as well. Now, just to expand a little bit and sort of sound a little note of hope here. One of the things that, researchers have discovered is that many of the activities that humans do, which add the most to their sense of well-being, are activities which generally speaking, don’t impose such a burden on the biosphere. So going for a walk, for example, is almost not entirely, but it’s almost zero impact on the environment. And yet, people do it. They do it on a shorter and longer distances, and they do it for pleasure. Well, that’s one of probably 100 activities which fall into that category, which give you this what they now call sense of flow.

And you get totally absorbed in an activity. The time passes and you’ve just had a great time.

And people can get that from playing cards from, well, in my case, I like doing jigsaw puzzles, and even some economics can give me that feeling. But everybody can get a sense of well-being from different things. And I’m very upbeat about this, and I’ll tell you why, because I think well-being is something that does have political appeal. And that’s why we’ve seen a number of governments declare themselves as well-being governments. Now, they haven’t gone far enough yet, but they’re looking for ways to promote well-being first and foremost. And then think about what that means for the kind of economy they have. This is a great step forward. but, you know, just to go back to an earlier point, there’s nothing in the circular economy that contradicts anything I’ve just said about the wellbeing economy.

Carl Schlyter: 
No, exactly I think this is where you can pick elements from all these solutions in order to help us avoid overshoot. And that’s what your book is about. I mean, you mentioned jigsaw puzzles. I actually liked that too, but I like even more to go out and pick berries and cook jam. But, you know, that’s like that’s being a heretic towards the, growth economy. Because if I go out to pick my own berries, and even worse, if I use my old glass jar from last year, and even worse, if I use some fallen down branches from my garden and put a wood stove and fire it, there will be absolutely zero economic growth from there, zero economic added to the economy. But I’ll still have my jar of jam and a nice a time. So, here you can see that the current model doesn’t measure neither the wellbeing nor the value of what’s produced.

Peter Victor:
Now, you’re quite right. But you see, this is why I think measurement has a really important place in in helping us bring about system change. Because if we can make progress on measuring well-being and as I suggest, it’s quite a lot of work going on in that regard. Then politicians can point to how they have been able to improve well-being, which will appeal to those who benefit from that. And the emphasis on growth becomes reduced. Okay, Governments have to know how much money is being spent in the economy, given the kind of economy we have. You need that to know for things like taxation and so on, but you don’t need it as your primary objective that you want to make that number grow of all the time. 

Carl Schlyter: 
But another thing that you have been evaluating is also the impact on working time. We have one episode on that with Juliet Schor where we talk about the four-day work week and the 1500 different organisations that she has been helping implement that, and the very positive results we have seen from that. But you have also studied how technological progress and well-being progress can be assisted by reduced working time. I would like to hear your thoughts from an economist point of view on this.

Peter Victor:
Yes, Okay. Well, when I first started working in this general area, I wanted to see whether a modern economy could manage without growth. That was the title, the book Managing Without Growth. And I didn’t know the answer to that. I began the research, and as I was working on the answer, one of the reasons I was saying before that governments pursue growth is to keep unemployment low. So the concern that, there’s a reasonable one, to say, well, if we don’t have growth, all we got to then have mass unemployment, especially with computers, AI making it possible not to employ many people. So, it just became a question of arithmetic, which was that, well, if we were to keep gross domestic product constant, so no growth, we shorten the average time people spend at work, then you could still have just as many people employed, but everybody would be working less. And, you know, that’s been the long-term trend in capitalism, at least it was until about 12, 20, 25 years ago in many countries.  Labour became more productive, wages went up. You know, economic growth, some bumps along the way knocked down. But the work, yeah, got shorter and shorter.

And that trend more or less stopped about quarter of a century ago. So the lesson to learn from that is we can do two things with increased productivity. We can produce more stuff. We can produce roughly the same amount of stuff, but work less. And one of the things that came out during Covid and is now still very much part of the public discussion here in Canada is this work life balance issue? It was not really discussed before. Work was work, and that’s what it was. but now we realize that maybe for many people we haven’t got the best balance and that they would be better off with less work, and more leisure time, especially the kind of leisure that doesn’t have much impact on nature. And then we’re beginning to see what living in a full world might look like, as in sort of slightly more concrete terms. And perhaps we’ve been discussing to this point. 

Carl Schlyter: 
In the end of your book, Escape from Overshoot, you also have like 14 proposals or suggestions, and one of them, brings back the issue of the importance of participation and democracy and being an active citizen. And here, this was the original logic When the Social Democratic party 100 years ago advocated eight hours work day and so on. That was actually to give people time and energy and power to organise themselves and educate themselves in order to influence their – and society’s life. And you’re bringing back this point, and I think this is also strongly linked to reduce working time. 

Peter Victor:
What you’re referring to are these 14 propositions that I came up with trying to think my way through what will it take to escape from overshoot? This is a step back from specific policies, which I also say something about to what is it we really have to agree on if we’re really going to wrestle with this problem of escape from overshoot. And so, one aspect of that is what kind of political system is likely to give us the best chance. And, we’ve become, I think, overly accepting of representative democracy, where we just vote once every 4 or 5 years and somebody to a building a long way from where we live, let them talk about things and give us policies and such. And the opportunity to participate in that process is really very, very limited, but it has its place. We need representative government, but participatory democracy, the idea that we find ways in which people can participate at many different levels, neighbourhood all the way up to the national and even international is really important. And some countries do a better job with that than others. So, what I’m saying in that particular instance is that we need both representative and participatory democracy. And I tie this to another key proposition, which is that we need a common sense of purpose, which we don’t have. It’s hard to get overshoot on the political agenda because people’s minds to think that’s been your growth. That’s terrible, which we can’t face up to that. Let’s go on to something else and drift into green growth arguments, and things. But to get a common sense of purpose, I think direct involvement of more people in the political process will be key. 

Carl Schlyter: 
But then, as you mentioned, the first point of your 14 proposals is exactly this. Except and agree on that we should avoid overshoot and what would be needed to do that? I mean, how radical of a transformation would that be? 

Peter Victor:
Well, I don’t think there can be much doubt that we are in overshoot. I’ve mentioned the ecological footprint, which we have data going back to 1961 every year. And you can just see overshoot emerging around 1970. It’s not a new phenomenon. We started to exceed the biocapacity of the planet globally in around 1970. But more recently, a group of scientists came up with this idea of planetary boundaries. They identified about nine major environmental issues, climate change being one, freshwater land transformation of what they call novel entities. A whole slew of these, it’s all on the internet for anybody to look at. And they said, look, we’ve got some real threats here because with some of these, you got a tipping point, climate change being the primary example. we’re not just going to gradually, slowly get warmer and warmer. We can destabilize the climate system. so, there’s no way back, and we’ve got problems that we are unable to cope with. And then they said, well, we don’t really know exactly where these tipping points are. So, we’ll establish some boundaries which we think are on the safe side of those tipping points. And then they did that. They used the best science available and for the 9 planetary boundaries and for three of them, we’ve already exceeded them. This is in 2009. They reviewed it in 2015. It was now four boundaries. we exceeded. And the most recent assessment, 2023, we’re now exceeding six of these planetary boundaries.  Now, I know you mentioned the Doughnut Economy.

Carl Schlyter: 
Yeah. 

Peter Victor:
Doughnut is a very, very interesting idea because what Kate Raworth did is that she took the planetary boundary, took an image of the globe represented by a circle, and then she hollowed out the middle. That’s why it’s called a doughnut, because it looks like a certain kind of doughnut we eat a lot out here in Canada, and in that centre, she put initially, as I recall, the social development goals the UN agreed to. And then she said, well, here’s the way to conceive of this. Can we meet these goals without exceeding any of the planetary boundaries? In other words, is there a safe space represented by the width of her doughnut, that we could all occupy? And this image has really caught many people’s imagination, and they use it now very effectively, quite often at a local level or city level, and said, okay, what do we have to do in our city to help the world live within the doughnut. 

Carl Schlyter: Some other of your proposals are, actually we have already talked about this, this logic of contraction and convergence and, justice and fairness and the transition. but two, I would like to point out, could be perceived as rather controversial. And how would you argue to get a common understanding on those two? And that is reduction of the physical scale and limits on throughput. How would you convince politicians to say, okay, this looks like a nice and logical future for society?

Peter Victor:
Well, that’s a great question. And I think I would have to answer in several ways. First of all, I’ve spoken about these ideas to different levels of government, and what I find is that the most receptive are the local governments, the least receptive are the more senior levels of government. In Canada we have municipal, provincial and federal. Canada is a huge country, it’s not immediately obvious to people if you don’t make an effort to think about it, that there are physical limits. Living in Canada, 40 million people in a landmass bigger than Europe, but at the local level, where the local communities and municipalities have responsibility for water, for waste. And they know that physical boundaries the geographic boundaries very clearly, they’re much more open to this concern. How are we going to live within the limits? So that’s one line of argument, it’s less difficult perhaps in smaller countries. I grew up in, in Britain, which, you know, has a sense of itself because it is it’s basically an island. so, you can expect to see more tension and more, openness to these kinds of ideas there. 

Carl Schlyter: 
I also think you have an important point here. I think wherever you live, whatever country you live in, that you have a better feeling of empowerment when you approach local decision makers. So, you can always stand and go your way up. 

Peter Victor:
That’s where you can start. And of course, there’s one organisation that’s global and city focused. So that’s the C40 Cities, which comes at Climate change at the city level. Says, what can we do as a city to reduce emissions? I think that they’re making a great contribution and that’s all mayors, they’re all politicians. The second point I would make is that, in fact, we do impose a lot of limits in our societies. it can be speed limits, can be limits on what you can consume. it can be drinks and drugs and things of that sort. It can be limits on land use. We have a green belt surrounding Toronto that, is quite well known internationally. And our current provincial government decided it was going to allow development of some of the green belt. There was a huge outcry and the government had to back off. So, there’s a certain awareness of limits that are used. We’re used to fishing limits because that’s kind of understood that if you’re done limit fishing, especially on the high seas, you get overfishing. That’s part of overshoot. So, you need to find ways to limit fishing by limiting gear, size of ships and light fishing licenses. So, what we’re really saying when we talk about limits is saying, what are the things that really have to be limited to escape from overshoot? We talked about throughput. So, what are the places in which we should impose the most critical limits?

Carl Schlyter: A link to that. I think you also reasoned about these economic theories about, when markets are a possible tool and when other tools should be used to, like when you have a rivalry in exploiting a resource and when it’s possible to exclude some people, or it’s wanted to exclude some people from this resource, using capital as the requirement and so on. So could you explain a little bit, like when could markets work and when do you need other tools.

Peter Victor:
Yes. Well, that’s so you’ve mentioned two very important concepts that economists use, the rivalry, which means that, take bread as an example. If you consume bread that I can’t consume that same bread in that sense that the commodity is rival. Rival in consumption, one person consumes it another can’t. And you can contrast that, say, with street lighting, which is non rival. If I’m walking on the street and enjoying the lighting, you can do the same thing.

The lighting I benefit from is no less for you. So that’s one very important point. The other one is exclusion. For a market to work, you must be able to exclude people who don’t pay for something because otherwise they would just take it. So, you’ve got to be able to exclude others from consuming something that you think is yours. A market can be seen as trading these exclusionary rights from one person to another. So, we have possible four categories with rivalry and non-rivalry, exclusion and non-exclusion. Now when we ask the question of well what kind of institutions do we need for these four possible kinds of things that are in our world, we can answer as follows. For the market to work as economists like to say that it does work, you need both rivalry and exclusion. So, a good example is all the things you see on the shelves in the supermarket. The rival, one person consumes, that much less than somebody else. And that is a great exclusion system in the sense that there’s security on the door. Very often there’s a whole core system. If you steal something, all of that. So, you’ve got exclusion and rivalry. That’s when the market works. But then we’ve got three other possible combinations. If something is non-rival and non-exclusionary, the market, you just can’t have a market. You must have exclusion for a market to work, you must be able to exclude people who haven’t paid for it from consuming. So, we used to use air quality as an example. If the air quality is bad in the city, but everybody is going to benefit from it being cleaned up, you can’t exclude people. We don’t have an easy exclusionary mechanism. 

Carl Schlyter: 
They actually don’t want that you want to clean it up for all of us.  So, there you wouldn’t want to have a market even. It’s an inefficient. 

Peter Victor:
Market cannot exist. But that doesn’t mean that capitalism doesn’t look for ways to exclude and to make money. So, what kind of institutions do we need for a society that’s not living in overshoot? And so now we have four possible types or combination. We can use the market for things that fall naturally into rivalry and exclusion. And we can use perhaps other institutions, political institutions, social institutions, neighbourhood arrangements and the couple of things in the rural areas for the other three cooperatives, there’s so many different possibilities. But we have to first recognize the nature of the problem, which is we’ve got a very complicated requirement for system change, and the market is only going to be useful for one part of what’s going on within that system. So, I’m not opposed totally to the market. Market can be very useful, but it’s limited in what it’s good for solving problems of. 

Carl Schlyter: 
And then you have the small little thing on capitalism as one of the points. 

Peter Victor:
Capitalism is an evolving system. The capitalism of the 19th century is not the capitalism of today. And capitalism takes on different forms in different countries. It’s a changing system. So, we have to recognise that because otherwise, if you think fixed and rigid, how do you change it? That’s a much harder task. What we do is influence the direction of change. So that’s one perspective. The second thing is, one of the reasons why capitalism or any economic system changes is because of the pressures that build up within that system that require change. And we’re now in an era where many of these most important pressures are the result of overshoot, of demanding more from nature that nature can provide. So, capitalism is going to change if we don’t do anything about it. I have no doubts about that. And it may change in a very undesirable fashion. with the increasing inequality or increasing power of small groups of people and businesses, the weakening of government, which is sort of, direction that I think we’re going in, or we need to be more thoughtful about it and talk about the kind of, economic and political system we would like to have. And that’s a conversation that you hear periodically, and then it disappears. but it needs to come back, I think, and to be informed more than it has been in the past by the predicament we now find ourselves in, with placing such pressure on the on the planet and not really knowing what to do about it. 

Carl Schlyter: 
So, if everybody in the decision, making power role here on the planet would read your book and, they agree with you on we should avoid overshoot. How urgent is it to take action?

Peter Victor:
Oh, wow. That’s probably the easiest question you asked me. We’re way late in taking action. This was seen coming at least 50 years ago when I was an economic student. And shortly after the book, The Limits to Growth was published 1972, which for all its shortcomings, gave us a view of the 21st century, which is looking unnervingly like what we are now experiencing. The population projection was pretty accurate, the assessment that if the trends that were going on than were to continue, and largely they have, we would be looking at, system failure in the natural systems and then in the economic system, social systems sometime in the mid 21st century. So that’s just to say there have been voices around telling us we better get on with it. And the real problem is, although there have been some moves in the right direction from which we’ve been able to talk about today, they’re way too slow. That’s too slow, and they’re not turning around the trends that needs to be reversed. So, we’re still celebrating the fact that mining is increasing. Roads are being built; we’re moving into electric vehicles. Whenever I read about this, I’d like to know when people move to an electric vehicle, what do they do with their old car? There’s no guarantee that some got an electric vehicle means that their other car is no longer being used. And so, you see data on the percentage of new vehicles that are electric. As if that’s all to the good. Anyway, whereas I think more shared transport, public transport of various kinds would be much, much better for the environment.  So, and this goes back, if I may just look back to well-being. What wellbeing requires is mobility. The question is what mobility? What are the different ways of providing mobility to people? And the answer to that, I don’t think is, is billions of, electric cars. 

Carl Schlyter: 
And I would go one step further, even say wellbeing economy is reducing people’s need for mobility by having a health care centre, a library, a food market closer to home.

Peter Victor:
Yeah, I absolutely agree. It’s mobility. For what purpose? Maybe we can satisfy that purpose in a better way. That’s great. I agree with that.

Carl Schlyter: 
Well, on that note, maybe we should end this episode. because, I think there are so many aspects that you want to change, but if we have a clear mindset on that, overshoot is the problem we need to deal with. It means that we understand it’s urgent. We need to take action now. We need to change many parts of society, and we need to do it together for the common purpose. So, I think, that’s what I take home from our dialog today. And, I hope that, our listeners enjoy listening to you as much as I have been doing. Thank you so much.

Peter Victor:
You’re very welcome. Thank you for the opportunity.