Mapping an Escape from 'Overshoot'

An interview with economist and low growth guru, Peter Victor

If there is one Canadian economist who knows a thing or two about managing our economy without endless growth, it’s Peter Victor. He’s professor emeritus at York University and has spent decades specializing in ecological economics and alternatives to our incessant adherence to a delusional growth model. I interviewed Victor about four years ago for my 4-part series, Climate Emergency, shortly after the release of his book, Managing Without Growth: Slower by Design, not Disaster. At the time I was struck by what he had to say about something many environmentalists had been championing—this notion of “green” growth.

By that point I had spent a decade steeped in ecological economics, a field that recognizes that the economy is embedded in the biosphere and aims to reduce our ecological footprint by assigning value to clean air and water, biodiversity, and healthy forests and societies. We often call these “priceless,” because we recognize their enormous inherent value and the reality of our complete dependence on their effective functioning.

But in reality, we assign no value to them. Instead, our current economic system—based on Gross Domestic Product—counts the degradation of these “assets” as a gain.

For instance, we liquidate forests (and a myriad of other ecosystems), counting the monetary value of the commodity itself, while ignoring all the losses: soil, habitat, species, as well as the services that forests provide such as climate regulation, watershed protection, flood and natural pest control, prevention of soil erosion, formation of topsoil, nutrient recycling, and long-term storage of carbon. Then there’s the spiritual and aesthetic benefits of forests. None of this is accounted for.

Meanwhile, our economic system tells us that doing more of this is a good thing.

Northern Pulp’s logging road at the Square Lake clearcut, about 30 minutes inland from Sheet Harbour, Nova Scotia. In our current economic system this devastation amounts to a good thing. Photo: Linda Pannozzo

“Growing the economy,” is what politicians of all stripes have been heard promising for decades, and now the growth many of them promise is “green growth”—a comforting and politically easy narrative that lets us believe that the solution to our planetary woes is a technological one.

Green growth also opens up many new opportunities for profit-making, so the true motivations behind it also need to be scrutinized.

In his new book, Escape from Overshoot: Economics for a Planet in Peril, Victor suggests that “green growth” could also be a “dangerous distraction,” a topic we’ll return to in the interview below. His book chronicles what happens when you combine the cumulative impact of 8 billion humans with “the relentless pursuit” of economic growth. But Victor doesn’t stop there. He also points to possible alternative economic scenarios, with an eye to seeking a just and equitable escape to overshoot.

[I reached Victor by telephone at his home in Toronto. Here is the transcript of that interview. It’s been edited for length and clarity.]

Linda Pannozzo (LP): In your book, you spend a lot of time discussing economic growth and something called overshoot. How is our adherence to economic growth connected to overshoot?

Peter Victor (PV): Overshoot refers to the fact that the demands placed on the planet by the human population and our artifacts now exceed the capacity of the planet to support us. The high consumption levels of a small proportion of the population are particularly problematic, especially since the burden of overshoot falls disproportionately on the most vulnerable, yet least responsible for overshoot. Overshoot is most apparent with respect to the resources we consider renewable, which have the ability to produce new growth or assimilate our wastes. Think of a forest or farm. We can live off the growth of timber and food, but not if we go too far and deplete the stock of trees and soil nutrients that produce the growth. These examples of overshoot are related to economic growth with its increasing output of forest products and food, and the many other products made ultimately from what the planet provides.

Economic growth is best understood as an increase in the goods and services that we buy through the economic system. As we've grown in numbers and in economic output, we've reached a scale that is causing overshoot. So there's a history to the relationship between economics—and I have to include population growth—and the current situation where we're using more than the renewable capacity of the planet.

Plus, we've also got problems with minerals with shortages of supply, especially from low-cost sources. It's all part of the overshoot story. But now, just to add something which is really critical to an answer to your question about economic growth and overshoot, is the recognition that so many societies around the world give priority to continuing economic growth—that's certainly true in the United States and in Canada. The pursuit of economic growth ends up taking priority over other considerations. Somebody might have a very good idea about protecting land from too much human use.  The first question asked is, “what would that do to economic growth?” Or if we impose a carbon price to address climate change, “what will it do to economic growth?” How will firms respond? Will it create unemployment? So, the prioritization of economic growth, as well as the fact of economic growth, has implications for overshoot.

LP: You devoted a chapter to the subject of “green growth,” which you suggest might be a “dangerous distraction” because the material requirements to capture renewable energy and distribute it are not renewable and possibly greater than for the fossil fuels that they're expected to replace. Can you explain what you mean by this?

PV: With renewable energy, the word “renewable” refers to the energy we get from the sun or from the wind, and it's okay to think of that as renewable. But to capture this energy for human use, we use equipment. It could be a solar panel array, it could be a wind turbine, and they're made of materials. So, we get the energy if we find materials for that purpose. Competition for these materials is increasing as the world transitions to renewable energy, but that's only one aspect of why green growth is a questionable proposition. The dangerous distraction is based upon a number of other considerations as well, which I can go into if you like.

LP: Yes, please do.

PV: The idea of green growth is that we can continually, without limit, expand the economy in terms of the goods and services it produces and, at the same time, reduce in absolute terms the environmental impact of that expansion. Environmental impact can cover many things, not just climate change, but also the loss of biodiversity, shortage of freshwater, dispersal of plastics in the environment and so on. There’s a long, long list of impacts. Well, I'm not persuaded by this supposed decoupling of economic growth from its environmental impacts because the historical evidence for it is very limited, even though people have been talking about it for a long time, a lot longer than might be realized by the public. Academics and researchers have looked into the record on decoupling growth from its impacts for quite some time and many are sceptical about its future prospects.

Secondly, many of our environmental problems are best understood as 'stock' problems. Let me explain that. Climate change is caused by the accumulation of greenhouse gases in the atmosphere and in the oceans. It's not the additional greenhouse gases each year that is critical for climate change. It's the accumulation of greenhouse gases going back at least to the start of the industrial revolution that has led to the problem. So, it may be feasible, and we've seen some evidence of this, that we can have some economic growth and at the same time reduce the annual emissions of greenhouse gases. But just reducing the annual emissions of greenhouse gases does not reduce the stock, in fact it adds to the stock, albeit less than it did the year before. And since we're on the verge of exceeding the stock of greenhouse gases in the atmosphere that's going to take the average increase in the temperature of the globe beyond one and a half degrees, which we've been warned is critical, we're in big trouble.

That’s why I think we need to focus more on what we are doing to control the increase in the stock of things we don't want, and reduce the reduction of the stock of things we do want, and less on the flows. Reducing undesirable annual flows is not enough. These flows must be reduced fast enough to prevent unwanted accumulations from not exceeding critical levels. Desirable flows, such as timber, must be increased fast enough to provide needed supplies and that requires an increase in the stock of forests.  Focusing too much on flows rather than on stocks, as in much of the discussion about green growth, can distract us from what really matters which are the stocks, and give false hope about the prospects of economic growth combined with declining environmental impact.

There are examples where an increase in economic output has been achieved at the same time as resources were reduced, but when you look economy-wide, it just doesn't seem to work that way. One of the reasons is because of something the rebound effect. The way you reduce the resource requirements of an economic activity is you make the production process more efficient. This way you get the output you want, but with less resources. Well, that has implications for the cost of producing the output. By making production cheaper through improved efficiency, the output will be available for sale at a lower price than it otherwise would have been. That means people will buy more. This is called the rebound effect, and it can sometimes be so large that it overwhelms the efficiency gain and increases the total resources used in production.  At other times the rebound effect reduces the benefit of the efficiency gain without eliminating it entirely, so that the assumed reduction in resource requirements are later discovered to have been exaggerated.

As you can see, there are many reasons why green growth just doesn't look plausible as a long term strategy for eight plus billion people on the planet.

The three eras of economic growth. Screen grab of one of the slides presented at a talk given by Victor, Managing without Growth: Slower by Design, Not Disaster.

LP: Can you explain what the ‘energy-emissions trap’ is?

PV: The trap is that we want to go into renewables fast. The faster we go into renewables, the less we're going to get the benefits of new technology because we're pushing ahead with the technologies we've got. They have a relatively low energy return on energy investment, and that means you've got less energy for everything else and you're using a lot of fossil fuels to get there, so you're exacerbating the greenhouse gas problem. What we need to do is to steer a path that’s not too fast so that we use too much fossil fuel in the short term, and not too slow, that we don't get sufficient renewables to displace fossil fuels and help us out of the greenhouse gas problem.

LP: In your book, you also discuss the nine planetary boundaries and that we are exceeding the safe threshold for a number of them, including climate. Given the other serious issues we're facing, which maybe you could touch on, is there an effective way of dealing with multiple issues simultaneously?

PV: Well, that's the big question, isn't it, that the book tries to answer. The nine planetary boundaries are a very convenient way of understanding overshoot. Climate change isn't the only problem and it's not the only manifestation of the excess burden that humans are placing on the planet. And by the way, I'm not saying for a moment that we're all equally culpable. People in the rich countries generally put a much greater burden on the environment than people in poorer countries, and yet they're the people who stand to suffer the most. I think that dilemma needs to be better appreciated. This difference between impacts on the environment and vulnerability to the effects of overshoot exists within countries as well.

So, we have these nine planetary boundaries that a group of scientists have identified. They have also suggested a safe operating space for humanity that if we stay within, we're alright. When they established these boundaries, they said, “we've gone beyond the boundaries for some of them.” How are we to deal with so many inter-related pressures on the biosphere?  For me, the answer lies in achieving the following: attaining an absolute reduction in the extent to which we use materials and energy and create wastes. We need to differentiate among materials and types of wastes to set priorities.  It's much more critical to reduce the use of some materials and disposal of some wastes than others because of their much greater environmental significance. But generally speaking, this is the direction we should be going in - shrinking the physical size of the global economy so stay within the planetary boundaries.

It's essential to also consider the economic and social consequences of this kind of direction. Some of the work that I and others have done suggests that it is possible to have economies that work well in terms of people's wellbeing, employment level, providing basic needs for housing, clothing, food, mobility and so on, and enhancing people's enjoyment of life without continual economic growth. It's possible. I'm not saying it's probable, but I believe it is possible. I produced 14 propositions for what this kind of escape from overshoot can be based upon.

LP: What do you think about Canada's carbon pricing—which is currently set at $65/ tonne? 

PV: It’s good, if I had to say one word. I like the fact that it's revenue neutral, which means that the government doesn't use it to obtain revenues to pay for government expenditures. The money is returned to the population through the tax system such that most people get back more than they actually pay because of the increase in the price of fossil fuels due to the carbon tax.

LP: What about in terms of how it deals with greenhouse gas emitting industries? What are your thoughts on that?

PV: That's a good question and I can't say I'm up to date on the details, but I gather there is a certain number of exemptions given to heavy industry.  It's always tempting for governments to do that. I think that's a mistake, by the way, because a process like this works best if it's standardized across all emissions, otherwise opportunities arise for behaviour that might undermine the system. You see that with carbon offsets where companies are allowed to show they paid for tree planting and since those trees will absorb carbon, they are allowed to emit more carbon. Well, if you've been following the wildfire situation in Canada, there's a real risk that these trees will catch fire, releasing all that stored carbon into the atmosphere and more. So offsets can be a very unreliable way of balancing the allowed increase in carbon emissions from industry. I prefer a carbon tax or a uniform price across all sources with no offsets. I think people understand that better and it's more effective for reducing emissions.

LP: What kind of growth would you advocate for?

PV: That's a big question. There are lots of things I want to see grow. I'd like to see justice and a reduction in inequality grow. I'd like to see freedom of speech, empathy, and social support grow. All of these, we know, add to people's wellbeing.

The World Happiness Report comes out every year based upon surveys of happiness around the world, and the results are analyzed to determine what contributes to happiness. People give a lot of weight to trust, and to having security so that they don't feel isolated and feel safe. These are very, very important determinants of happiness. They should all grow, but they don't automatically just because the economic output of the economy grows. In fact, the opposite can happen. Let me explain. The measure of economic output that is most widely used is gross domestic product (GDP). If the streets become more unsafe and people spend even more money on guns thinking they'll protect themselves, gross domestic product increases. If we start spending more money to protect ourselves from climate change, GDP increases. What this means is that we can differentiate among the components of gross domestic product, wanting some to increase and others to decrease. I'd like to see increased expenditure on health care. We learned about the need for that during COVID. And on education, on parks, on healthy food. I'd like to see expenditures on commuting decrease and on what are generally called defensive expenditures - expenditures intended to protect ourselves from a deteriorating environment - because we have taken action to prevent the deterioration.

We need to be more selective about what we want to grow, but also at the same time recognize that unless we reduce the extent of overshoot, we're going to be facing an increasing number of problems that we don't have the capacity to control when they get out of hand.

Different perspectives on a post-growth economy. Taken from Victor’s 2023 book, Escape From Overshoot.

LP: In your book, you also present a number of trends, and I wanted to focus a little bit here on inequality. You point out that if trends in wealth inequality continue by 2050, the top 0.1% will own more wealth than the entire global middle class. Inequality guru, Thomas Piketty said that the concentration of wealth can lead to the funding of political capture that protects the financial interests of the elites from political challenge, essentially protecting them from democracy. You also touched on this in your book when you said that inequality can lead to the “concentration of power and influence.” Can you explain how inequality makes escaping overshoot so difficult?

PV: Well, not everybody suffers from overshoot in the same way. Some benefit very considerably from it, both financially, but also in terms of being able to escape from its worst effects. So, very rich people can buy islands, they can buy private yachts, they can buy their own airplanes, they can live extremely well in the way the world is today, protecting themselves from the worst effects. But they can't do it forever and they can't always do it.

Overshoot doesn't hit everybody in the same way. It doesn't hit us all negatively. That would, in many ways, make it easier for us to deal with it because then we'd all be on the same side. But we're not. And since so much of the activity required to deal with overshoot has to be led by government because there's only so much that we as individuals or in smaller groups can do, we need government leadership, government action. To the extent that wealthier people have a greater influence on who gets elected, the positions they take, the regulations they introduce, the laws they pass, then we have a problem because it means they're in a position to obstruct the kind of actions that are necessary to deal with all these excesses, to deal with overshoot. It's not a very difficult argument to understand.

LP: You mentioned the need for there being a government approach to deal with it. During the pandemic we saw how governments, not all governments, but there were many governments in the world that not only created but took advantage of the fear and panic to expand and consolidate their power, including through, in many places, the use of surveillance, limiting speech and cracking down on dissident journalists. Here in Canada, the Canadian Civil Liberties Association have been doing a lot to raise awareness about the erosion of rights and freedoms. But the pandemic was also used to steamroll in a digital transformation. There is a danger that this kind of approach could also be used to deal with climate change, where top-down control on individual behaviour becomes justified by the need to reduce greenhouse gas emissions. Are you concerned at all about the potential for this? And how do we ensure that the situation is dealt with through more authentic democratic processes with public interest in mind rather than an authoritarian approach where vested interests often still end up benefitting?

PV: Yes, I am very worried about it, and the reason I'm worried about it is because of the real possibility that insufficient action will be taken in a measured and thoughtful way, well ahead of the critical problems being so obvious that something has to be done. But as time passes, the likelihood of anticipatory action declines. Climate change is a good example of this lack of anticipatory action. Human induced climate change was identified a long time ago. Governments signed a climate convention back in 1994, 30 odd years ago; pledges were made that haven't been kept, and now we are living with the consequences. That wasn’t the first we knew of climate change but it was the first of many global agreements committing governments to take action, which, has been insufficient.

Peter Victor, professor emeritus at York University.

What I'm afraid will happen is that until the problems are really apparent, and COVID is an example, people don't have the opportunities that you're talking about to deal with this in a proper democratic way, with lots of time to discuss the pros and cons of different kinds of action. Instead, we turn to governments and say, “Help. We gotta stop this thing.” It's the same with forest fires now. People don't have a choice, really, of staying in their homes. They are given an evacuation order and have to leave. That's what happens when a crisis is very obvious. Democracy takes time. It takes time to educate ourselves and to educate others about a situation, and not to feel so threatened by the changes that have to be made because they can be made in a manageable way. But when the window for change shrinks the likelihood of an authoritarian response increases.

So, you tell me the answer to that one. I don't know. I do my best to write about the threats and to show that there are alternatives. One of the things that really limits action and limits thought is to think there is no alternative. It’s the pursuit of growth, and giving it priority over other considerations, which often prevents taking the actions that we think we need to deal with these looming problems. There are some people in my circle who say it's already too late to escape from overshoot or that we will never deal with overshoot through democratic means. They say we're too short sighted and too local in our views and our orientation. But I'm still willing to look at it differently and see what opportunities are available for a just transition.

So, yes, you're right, I share your concern about an authoritarian response to overshoot, but I want to add something. There are some who would say that any action by government is overreach, an authoritarian act by the government. But that's generally a view that all government is bad and they don't want any more of it in their lives. I think that is a very dangerous view. Of course, we need to be selective. One of the propositions I make in my book is we should pay attention to the principle of subsidiarity, which means that problems should be dealt with at the lowest, most local political level as possible. Problems that individuals can solve should be solved by individuals. Problems that can be solved at the local level should be solved by municipal councils and all the way up. This will avoid the federal government coming down to the local level when it's not necessary because when they do, they can't help but adopt a one size fits all approach or something close to that. Whereas if problems are dealt with at the local level, you can allow much more easily for local interests and local views. The same is true at other levels. The Europeans have made a lot of the principle of subsidiarity and we would do well to do the same.

LP: In your book, you also note that “capitalism is a system inherently unable to solve these crises because to do so requires setting limits on the accumulation of capital, which cannot be done under capitalism.” You point to a number of post growth possibilities and one of them is eco-socialism, where “being will take precedence over having.” Can you talk a little bit about these post growth scenarios, just perhaps focusing on what they tend to have in common and maybe where they differ?

PV: I identify about eight post growth approaches. I find it encouraging that there's a lot of people looking at alternative futures that are better than just trying to stay on the track we're on. Pretty much all of them have in common an idea that we are entering an era where, for rich countries at any rate, growth is not the main purpose of economic life, let alone life itself. But they approach it differently.

One very important contributor, Herman Daly, who died last year, has done more than anybody else to promote the idea of a steady state economy. He said that what we should have is a just and efficient economy that doesn't use renewable resources beyond their renewability, that doesn't exceed the assimilative capacity of the biosphere, and emphasizes technologies and technology development which conserves resources as opposed to exploiting them.

You ask what these post-growth possibilities have in common. A number of the contributors who talk explicitly about degrowth, acknowledge they were influenced by Daly's notion of a steady state economy. The question is, how do we get there? How do we move a society or an economy in that direction? There's some difference in what they have to say about that. The eco-socialists are the ones who take most seriously the idea that there's a fundamental contradiction between capitalism and its growth imperative. They argue that if capitalism doesn't grow, it collapses, so we need something different for a steady state economy. They say an environmentally aware and socially just socialism is a viable alternative.

Another option is the regenerative economics of John Fullerton, who was a very successful player on Wall Street for a long time. He worked for JP Morgan and decided that his work was not contributing to well-being so he walked away from it and set up Capital Institute. Now Fullerton teaches courses online about regenerative economics. He thinks it's not inconsistent with capitalism to have a regenerative economy, but at the same time, he's very sympathetic to Daly’s view of the advantages of a steady state economy.

A steady state economy, just to be clear, is a steady state defined in physical terms. It doesn't necessarily mean zero increase in the value of output—that can go up and down, it doesn't really matter—the important thing is keeping the physical size of the economy under control. The planet's not getting any bigger, but our use of it continues to increase and at an increasingly faster rate. That's very troubling and has resulted in overshoot.

LP: I guess I’m wondering how we can constrict these material needs without harming the least well-off.

PV: First of all, we've got to be alert to that as a problem or as a risk, and that's why you're asking the question. Just to impose limits without attending to the consequences, especially for the least well-off, would be wrong. The best way is to have complementary programs which alleviate the negative impacts. But we should have more of those anyway, even under our current circumstances, to address poverty and inequality. The idea that somehow growth makes everybody better off has been seen to be false over and over again. You mentioned Piketty who showed that rising inequality happened at the same time as economic growth.

It's a fundamental principle of policy, that we need a measure - be it a regulation, a process, an educational program - for every one of our policy objectives. The reason is that most measures, regulation is a good example, affect more than a single policy objective. For example, a regulation that looks great because it will reduce air pollution, could be very bad because it will close down some companies, which employ low-income people. The answer is not to abandon the air pollution regulation, but also to have a program for addressing inequality and poverty. We need anti-poverty programs and environmental programs.

However, what's happened so often in the development of environmental policy and regulation —is that when a proposal to protect the environment comes forward, the question is inevitably asked, “What will it mean for employment or what will it mean for growth?” If you don't have a good answer, then the proposal gets shot down and we don't protect the environment. That's what we have to avoid.

We need a more comprehensive approach to the set of problems that we face. But sometimes the structure of government, with separate ministries with different focuses, doesn't really allow that. For example, it's very common for departments or ministries of environment to have to present the economic case for what they want to do, whereas departments of finance seldom have to present the environmental case for what they propose. This results in a built in bias in public policy, favouring economic growth over environmental protection.

One other thing I want to say, and it frustrates me as it happens so often, is that when a new factory is going to open up in a community, the headline in the media is typically about how the investment will create jobs. They don't say we need this factory because what it is going to produce will fill some important gap. It's the fact that the factory creates jobs that is celebrated. This is backwards. We have jobs to create things that people want and need, and that improve their well-being. To focus on the jobs rather than what will be produced says we have a distribution problem, not an output problem. The reason why attention is given to the job creation capacity of a new investment is because we know that if people don't have jobs in our economy, they don't have much of an income, they're poor. A fundamental problem right now for rich economies is the maldistribution of income and wealth, not growth. We rely too much on markets to determine incomes and wealth. Some people walk away with literally billions, or many, many millions a year, while others are suffering with not having enough to live on. So, you're quite right to raise the concern about environmental action having implications for poor people in terms of their income. But the way to deal with this is by directly addressing poverty, not by compromising the environment.

LP: Are there any other key messages you want readers or policymakers to take from your book?

PV: Yes. The key message is not to despair but to realize that the decisions made today have a huge influence on the kind of lives and opportunities that will be available to people tomorrow, and that there's a wide range of choices to be made. We have to understand this and then we can have a proper discussion about what these choices are and which we prefer. What I like about those groups you asked me about before is that they are each, in a way, offering somewhat different menus in terms of how best to proceed into the future and what should really matter. They are generating very important discussions and debate, and motivating change.

The other key message from the book concerns what we can do on our own and what has to be done collectively through the political process at all different levels. There are many things that we can't accomplish alone, such as the pattern of urban development, and which have to be decided at a higher level, and then engage at that level, too.

LP: People do want things that they can engage in, in their own lives that could help create positive change. What should we be focusing on, not just in terms of climate change, but all the other issues facing us?

PV: Our activities that count for most of our resource requirements which are not just from the local area, but in a globalized world, can be satisfied from all around the world. They include food, clothing, heating, cooling, and transportation. These are some of the main things that people can make important choices about. But I don't want to exaggerate the impact of these choices. We know that if we individually weren't around, it wouldn't be much of an impact on human pressure on the biosphere, because we’re only one of a population of 8+ billion people. That's why it's also important to be clear in our minds about what we can't achieve as an individual, but we would still like to see change. We can't expect people in rural areas with no public transit option to give up their cars and get on a bus if there are no busses. There could be busses, but it would have to be decided at a higher level than the individual.

The other thing is what to teach our children. We pass on to our children not just whatever money we may have left in the bank when we die or a house if we own one. We also pass on what we're able to teach them while we're still here. I'm an older person, so I'm very conscious of this now.

What we teach our children is absolutely fundamental and nothing disturbs me more at the moment—and I’m speaking very personally now—than how antisocial, so-called social media has turned out to be, and not just because so much awful stuff is on social media. As I walk around my city, I see many people looking at their cell phones and not talking to the people next to them, isolating themselves and being isolated in return. Or parents pushing children in strollers and not talking to the child, talking instead to their cell phone. What better way to teach a child that a cell phone is more important than they are? This is not the right direction to go in as far as I'm concerned.

LP: What should we be teaching children? And I guess you mean from parents, but also from the education systems?

PV: One of the things about living in a city is that you can be blind to the fact that we are biological beings; living beings, and that we need to appreciate and understand nature and our place in it. The education system can certainly help. We can also appreciate nature by getting out into parks, into ravines, whatever is available to you, and getting an appreciation of life, that we're one species, among millions of others, and that we interact with them. What happens to them affects us. If it wasn’t for the insects, there wouldn't be much food for humans. We need to see ourselves as biological beings, but we live in a culture that tries to pretend otherwise. And we should share the planet, not just exploit it at the expense of virtually all other species as we do today. That way lies overshoot.