by Ilaria Ravazzolo, GLOBUS Correspondent
When you think of a doughnut you usually think of a tasty, sweet ring of dough pumped full of sugar and topped with even more sugary icing – it’s somewhat of a guilty pleasure. What does this delicious pastry have to do with saving the planet though? Well, the doughnut is, arguably, ‘a picture for 21st century prosperity’.
What I’m referring to here is not the pastry though, but rather the model created by the English economist Kate Raworth. In her book ‘Doughnut Economics – 7 Ways to Think Like a 21st-Century Economist’ she explores precisely that – seven ways in which to change the current view of Economics to adapt it to modern day issues (climate change in particular). The doughnut model challenges the current obsession with economic growth amongst policymakers and economists. The doughnut is ‘an environmentally safe and socially just space in which humanity can thrive’. In this space, we can meet the needs of everyone while keeping within the means of the planet. Raworth refers to this space in between the two rings as the ‘sweet spot’. The inner ring, the social foundation, symbolises the areas where people are falling short on ‘life’s essentials’ which, according to Raworth, include food and water, healthcare and housing, gender equality and political voice. It is the minimum standard that has to exist in order for everyone to lead a good life, derived from the UN’s Sustainable Development Goals. Typically, poorer countries frequently fall below the social foundation. The outer ring of the doughnut, on the other hand, symbolises the ecological ceiling consisting of the nine planetary boundaries drawn up by Rockstrom et al. These represent the environmental limits beyond which we should not go if we want to prevent reaching the tipping points in Earth systems. It’s usually the richer countries which live around or above the environmental ceiling.
Doughnut Economics can be seen as a response or challenge to the conventional 20th century economic thinking where GDP growth equates to a successful society and where capitalism is the only option for running a successful economy. In recent decades, our economies have become much more consumerist and linear. Linear economies operate based on the idea that production leads to consumption which then leads to waste. The doughnut model, however, forces the economy to adopt a more circular system. A circular economy is designed to be regenerative and ‘aims to decouple growth from the consumption of finite resources’. By prioritising the basic needs of all human beings as well the earth’s capacity, the doughnut challenges policymakers to let go of their obsession with economic (GDP) growth and instead create more sustainable, circular, and healthy systems. It aims to make everyone able to appreciate the benefits of being in the sweet spot. As Raworth states, ‘what we need, especially in the richest countries, are economies that make us thrive whether or not they grow’.
In 2020, Amsterdam made the decision to formally embrace the doughnut model as ‘the starting point for policy decisions’, making it the first city in the world to do so. The city sees it as a way to help the economy overcome the impacts of the COVID-19 pandemic and the subsequent effects on the (global) economy. According to the doughnut model, the ‘goal of economic activity should be about meeting the core needs of all but within the means of the planet’. To do this Kate Raworth and her Doughnut Economics Action Lab have downscaled the model to a city level to show the basic needs that aren’t met and the planetary boundaries that have been overshot. Their ‘city portrait’ of Amsterdam gives a clear indication of which areas policymakers should focus on in order to make it a ‘doughnut city’. For example, as the world’s largest importer of cocoa beans, coming mostly from West Africa (where labour rights are extremely exploitative) Amsterdam’s planning and policymaking have to take into account labour rights in West African states. This is highlighted in the model, which, according to Raworth is ‘the value of the tool’ as nobody would think of including these issues otherwise. Amsterdam’s government has introduced several schemes to help the city get into the doughnut (including massive infrastructure projects, policies for government contracts and employment schemes). One of these is a so-called ‘true-price initiative’, which adds a certain amount to the price of a good to account for the cost its production has induced. For example, if you go shopping in a supermarket a courgette could be priced at 0.6€ and you would have to pay an additional 0.5€ for the negative implications of farming on the land and another 0.4€ so that the workers can earn fair wages.
However, the doughnut does not offer detailed indications of which policies to change or adopt in order to get to the socially just and ecologically safe space. It is rather ‘a way of looking at it, so that we don’t keep on going on in the same structures as we used to’. The theory, rather than outlining specific policies or goals for countries, requires ‘stakeholders to decide what benchmarks would bring them inside the doughnut’. Raworth argues that governments’ and economists’ goal should be getting into the doughnut rather than achieving never-ending GDP growth. This can be quite difficult, however, considering that there are no universal policies which are guaranteed to work, and every country needs to assess and decide for itself which actions to take and how. This can make the doughnut seem abstract for critics of the model. What is more, the model has so far proven to work best on a smaller, city level, as it is easier to coordinate and administer than an entire country. It is easier to determine the environmental damage a city’s inhabitants cause and what their basic needs are than an entire country’s population. That being said, it has never actually been tried at a country level, so it’s impossible to assess how well it would work. Some also argue that the model fails to tackle ideological and political structures and factors that impede climate action. Nevertheless, by incorporating not just profit, production, and consumption but also the wellbeing of both human beings and the earth’s ecosystems, the doughnut is a much more realistic and applicable model than most of the traditional economic models, which are at best outdated and usually based on a number of unrealistic assumptions. It clearly has to be further developed and adapted to fit larger and various different contexts, but overall I think it is safe to say that it offers a promising alternative to the existing linear model which has not been successful for so many so far.