'Can We Learn to Embrace the Doughnut?'

What is "Doughnut Economics"

Since the birth of economics, conversations about growth and development have been centred around GDP and GDP growth. Many criticise this fixation on GDP and believe that we need a new way of thinking when it comes to understanding the global economy. Economist and author, Kate Raworth, proposes “Doughnut Economics”. Her model, depicted below, illustrates the economy with two rings.

The inner ring is our “social foundation” and represents the minimum basic needs of humans. Factors considered to be our basic needs include access to food, water and housing as well as education, income and gender equality.  The outer ring is our “ecological ceiling” and represents our planetary boundaries, as identified by scientists (Rockström, et al., 2009).

This includes factors such as climate change, air pollution and ocean acidification. Our aim when engaging in economic activity should be to remain between these two rings. Where basic human needs are not met, we are falling short; where we are operating beyond our planetary boundary, we are overshooting (Raworth, 2017).

The Problems With Pre-Crisis Operations

Worldwide lockdowns have all but halted production on a range of goods and services over the last few months; but what was the global outlook at the beginning of 2020? Before countries’ borders were closed and financial markets had collapsed, 2020 was set to “define the habitat of humanity and many other species” (Bennet, 2020). To limit global warming to just 1.5°C above pre-industrial levels, we need to cap total CO2 emissions at 400Gt. In 2020 alone, we are on track to produce 40Gt CO2. This means that, at the current rate of emissions, we will reach 400Gt of emissions in just 10 years.

Without drastic change, therefore, we are set to experience more than the ideal 1.5°C. In fact, by 2050, average global temperatures could have increased by as much as 3-5°C (Rogelj, et al., 2019). This is just one example of how we are pushing (or perhaps even crashing through) our planetary boundaries.

Meanwhile we are also falling short of our social foundation. 785 million people across the globe do not even have access to a basic drinking-water service (WHO, 2019) and in 2018, 9.2% of the world’s population were “exposed to severe levels of food insecurity” (FAO, et al., 2019). It is clear from these statistics that our current model does not result in the “environmentally safe and socially just space in which humanity can thrive” that exists inside the doughnut (Raworth, 2017).

The traditional socio-economic urge to seek a return to ‘normal’ during our recovery phase is not ideal when the pre-crisis outlook was undesirable. Why would we want to return to a society that is simultaneously stretching our planetary boundaries and failing to provide basic human needs? Covid-19 has offered us an opportunity to change. In tackling the roots of the pandemic, we must abandon the idea that “limitless growth in consumption and production” is the way forward (Bennet, 2020).

What Does The Doughnut Model Look Like For Policymakers?

Raworth’s “doughnut economics” is more than just a theoretical ideal. In April, the model was “formally embraced by the municipality of Amsterdam as the starting point for public policy decisions” (Boffey, 2020). Raworth worked with representatives of the city to scale down her model to produce a “city portrait”. One problem identified was the increasingly unaffordable housing market. A solution to this might be to simply build more housing, but does that fit with doughnut economics?

Amsterdam’s carbon emissions are already 13% higher than in 1990 and the importing of building materials contributes to a high proportion of these emissions. The deputy mayor of Amsterdam, Marieke van Doorninck, said that “the doughnut does not bring us the answers but a way of looking at [the problems]”. As such, they plan on ensuring that builders use recyclable, bio-based materials such as wood as much as possible, though regulation.

It is initiatives like this that show that a new way of thinking is possible and how the Doughnut can be a helpful tool in sustainable policymaking. The coronavirus pandemic called into question so many aspects of individual’s lives; with that in mind, is a new and more sustainable economic model so drastic after all?

By Marina Symington

References

Bennet, J., 2020. 'Reorienting the Post-Coronavirus Economy for Ecologial Sustainability'. Journal of Australian Political Economy, Issue 85, p. page numbers needed.

Boffey, D., 2020. ‘Amsterdam to Embrace 'Doughnut' Model to Mend Post-Coronavirus Economy,’. The Guardian.

FAO, et al., 2019. 'The State of Food Security and Nutrition in the World 2019. Safeguarding against economic slowdowns and downturns.', Rome: FAO.

Raworth, K., 2017. Doughnut Economics: 7 Ways to Think Like a 21st-Century Economist. 1st ed. New York: Random House.

Rockström, J., Steffen, W. & Noone, K., 2009. 'Planetary Boundaries: Exploring the Safe Operating Space for Humanity'. Ecology and Society, 14(2), p. 32.

Rogelj, J. et al., 2019. 'Estimating and tracking the remaining carbon budget for stringent climate targets'. Nature, Volume 571, pp. 335-42.

WHO, 2019. World Health Organisation. [Online] Available at: https://www.who.int/news-room/fact-sheets/detail/drinking-water [Accessed July 2020].