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Peter A. Victor

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Peter A. Victor

The generation, transmission and use of information are critical for determining how systems function, especially systems such as economies in which feedback is important. As in any system, if the information generated and used for decision making is unreliable, system functioning will be impaired.

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Peter A. Victor

It has become increasingly popular among economists and others to put a price on nature. This can be a price on ‘natural capital’ which consists of geology, soil, air, water and all living things. It can also be a price on the ‘ecosystem goods and services’ produced by this natural capital. To a significant extent, attempts to bring nature into the orbit of market thinking and market processes is motivated by the pursuit of economic growth. In this chapter we examine the meaning of monetary valuation, its relation to commodification, and the conceptual, methodological and data problems of monetizing human interactions with the rest of nature. The many problems of equating nature to other forms of capital are explored and the practice criticized. More emphasis should be given to other types of information and more inclusive decision-making processes.

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Peter A. Victor

Economies are embedded in the biosphere. This was well understood by the founders of economics, especially Thomas Malthus, but has become neglected in mainstream economics, which presents the economic system as disconnected from the biosphere. Hence it is thought to be able to grow forever. Economic growth can be limited because of inadequate supplies of materials and energy, especially as the quantities required to sustain growth continue to increase. Advanced economies lack domestic supplies of some materials considered critical for the new technologies. Energy presents a special problem. Unlike materials, it cannot be recycled. Oil shortages remain a threat despite advances in extraction technologies. Greenhouse gases released from fossil fuel combustion are causing climate change and so economies must transition to renewable sources of energy. The difficulty of finding a transition path that generates sufficient net energy to support economic growth while reducing greenhouse gas emissions sufficiently fast is referred to as the ‘energy–emissions trap’.

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Peter A. Victor

The data shows that economic growth in OECD countries is slowing down and adjustments will have to be made regardless if this continues. Humanity’s impacts on the biosphere, exacerbated by economic growth, justify the naming of a new geological era: the Anthropocene. The Anthropocene is unlikely to prove hospitable to humans and many other species. The proposition that economic growth can be ‘decoupled’ from these impacts is shown to be most unlikely and various meanings of managing without growth are discussed. Systems analysis, which plays an important role in this book, is introduced. Economies as open systems is explained – they are dependent on a ‘throughput’ of materials and energy from the environment which become wastes. Understanding economies as open systems that are dependent on their environment raises questions about the longevity of economic growth. Without a reliable supply of cheap energy, it will be impossible to maintain the built and organizational structures that we are accustomed to and growth will suffer.

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Managing without Growth, Second Edition

Slower by Design, not Disaster

Peter A. Victor

Ten years after the publication of the first edition of this influential book, the evidence is even stronger that human economies are overwhelming the regenerative capacity of the planet. This book explains why long-term economic growth is infeasible, and why, especially in advanced economies, it is also undesirable. Simulations based on real data show that managing without growth is a better alternative
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Peter A. Victor

The emergence of economic growth out of the idea of progress is recounted. Its measurement as an increase in real GDP was given impetus by World War II and Keynesianism. Initially economic growth was seen as a means of securing full employment. This changed in the 1950s and 1960s when priority was given to growth, where it remains today. Despite objections from several leading economists in the 1960s and subsequent discussions of sustainable development since the 1980s, the pursuit of economic growth remains paramount though its limitations are recognized through the use of qualifying adjectives such as green, clean, inclusive and sustainable.

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Peter A. Victor

Virtually all of the materials and all of the energy that enters the economic system is disposed of as waste. When the disposal of wastes exceeds the capacity of the biosphere to absorb them the consequences can be bad for humans and other species. The ‘sinks’ overflow and the ‘services’ that nature provides diminish. The conversion of land for agriculture and settlements can exacerbate these problems especially when habitat is destroyed, which is a major cause of the ‘sixth extinction’. At the global level the concept of planetary boundaries has been introduced to help humanity avoid crossing thresholds that would cause irreversible damage to the environment. The data shows that as economies grow, many of these problems increase. Examples are provided covering climate change, CFCs and lead, nuclear wastes, forests, oceans and fresh water.

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Peter A. Victor

Sources, sinks and services are all interrelated. Several methods exist for integrating them. Three considered in this chapter are system dynamics, the human appropriation of the net products of photosynthesis (HANPP), and the ecological footprint. System dynamics is most helpful for examining the behaviour of systems over time. It was used in the Limits to Growth published in 1972, which explored the behaviour of the world system and projected it would collapse in the 21st century if trends continued. Retrospective assessments by Graham Turner 40 years later suggest the trends have not fundamentally changed. By some estimates, humans are using about a quarter of the global net products of photosynthesis and maybe as much as a half. This comes at the expense of other species with whom we share the planet and HANPP is increasing with economic growth. The ecological footprint conveys the same message of the link between economic growth and the loss of biocapacity.

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Peter A. Victor

Three aspects of an economy are important determinants of its environmental impact: its scale, the composition of GDP in terms of goods and services, and technology. These aspects are incorporated in the IPAT equation (impact = population _ affluence _ technology). Making Room, a simulation model based on a variation of this equation, is described in which countries are categorized as high income, and middle and low income. The population, GDP per capita, energy use and GHG per unit energy of these groups of countries are used to calculate greenhouse gas emissions. It is shown that if past trends are projected into the future, GHG emissions will increase dramatically. It is also shown that the extent of changes required in both categories of countries to achieve a substantial reduction in GHG emissions is considerable. Managing without economic growth in high-income countries will help but much of the required changes will have to occur in low and middle-income countries.