13 Example C: Doughnut Economy

Developed by economist Kate Raworth, Doughnut Economics presents a visionary framework for achieving sustainable and equitable development. It reimagines the economy as a system that operates within two essential boundaries:

1. Social Foundation: Ensure that no one falls below minimum living standards, such as food, water, health, education, and political voice.
2. Ecological Ceiling: Avoid activities that breach planetary boundaries, such as biodiversity loss, climate change, and ocean acidification.

The area between these boundaries forms the “safe and just space for humanity,” where economic activities can flourish without harming people or the planet.

Key Features of Doughnut Economics

1. Rethinking Growth:
   • Traditional economics equates progress with GDP growth, but Doughnut Economics emphasizes well-being and sustainability over endless growth.
   • It challenges the notion that economies must expand perpetually, arguing that quality of life and environmental health are better indicators of success.
2. Holistic Systems Thinking:
   • Doughnut Economics applies a systems perspective, recognizing that social, environmental, and economic systems are interconnected.
   • It emphasizes feedback loops and leverage points to address complex global challenges.
3. Redistribution and Equity:
   • The framework highlights the need to redistribute wealth and resources to ensure no one is left in poverty while avoiding ecological overshoot.
   • Examples include progressive taxation, universal basic services, and fair trade practices.
4. Regenerative Design:
   • Economic activities should regenerate natural systems rather than deplete them.
   • Practices like reforestation, renewable energy adoption, and circular economy principles align with the Doughnut model.

The Doughnut in Practice

1. Visual Representation:
   • The Doughnut is a circular diagram. The inner ring represents the social foundation (e.g., access to clean water and education). Falling below this ring indicates social shortfalls.
   • The outer ring represents the ecological ceiling (e.g., safe levels of CO₂ emissions). Exceeding this ring signals environmental overshoot.
2. Global Context:
   • Many countries experience both social shortfalls and ecological overshoot, indicating the need for transformative change.
   • For example, developed nations like the United States have high ecological footprints but fail to meet all social foundation metrics (e.g., inequality and healthcare access).

Case Study: Amsterdam’s Doughnut City

In 2020, Amsterdam became the first city to officially adopt Doughnut Economics as a guiding framework for post-pandemic recovery and long-term urban planning.

1. Policy Integration:
   • Urban planners used the Doughnut model to evaluate housing, mobility, and energy systems against social and ecological criteria.
   • For example, housing policies focus on retrofitting buildings for energy efficiency while ensuring affordable housing for all residents.
2. Circular Economy Practices:
   • Amsterdam incentivizes businesses to adopt circular economy principles, such as using recycled materials in construction.
   • Initiatives like the Amsterdam Metropolitan Area’s Circular Programme aim to halve the use of primary raw materials by 2030.
3. Community Engagement:
   • The city emphasizes participatory governance, involving citizens in decision-making processes.
   • Neighborhood initiatives support local food systems, green spaces, and community renewable energy projects.
4. Measuring Success:
   • Amsterdam developed localized indicators to assess progress, such as reduced carbon emissions, increased green jobs, and improved social well-being.

Comparison to Traditional Urban Models

• Traditional urban development often prioritizes economic growth at the expense of environmental degradation and social inequality.
• Amsterdam’s Doughnut model integrates sustainability and equity, ensuring development benefits all residents without harming the planet.

Comparing Doughnut Economics with Current Economic Models

Challenges and Criticisms

1. Implementation Complexity:
   • Translating the Doughnut framework into actionable policies requires coordination across governments, businesses, and communities.
   • Localized indicators and data collection are necessary but resource-intensive.
2. Economic Resistance:
   • Businesses and policymakers accustomed to GDP-driven metrics may resist adopting alternative models.
   • Transitioning to regenerative systems may face opposition from industries reliant on extractive practices.
3. Global Disparities:
   • Achieving balance within the Doughnut is more challenging for developing countries, which must address poverty while avoiding ecological harm.

Global Examples of Doughnut Principles

1. Costa Rica:
   • Aligns with Doughnut Economics by prioritizing renewable energy, forest conservation, and social welfare.
   • The country maintains high human development while operating within most ecological boundaries.
2. New Zealand:
   • Uses a Wellbeing Budget to allocate funds based on social and environmental indicators rather than GDP growth.
3. Kate Raworth’s Doughnut Cities Initiative:
   • Cities like Portland (Oregon) and Brussels are exploring Doughnut-inspired policies for urban development, emphasizing community resilience and sustainability.

Opportunities for Broader Adoption

1. Policy Shifts:
   • Governments can incorporate Doughnut principles into budgeting, planning, and taxation systems.
   • International agreements could align with planetary boundaries and social equity goals.
2. Business Innovation:
   • Companies adopting Doughnut principles can develop sustainable products, regenerative supply chains, and community-focused practices.
3. Education and Advocacy:
   • Integrating Doughnut Economics into educational curricula and public discourse can raise awareness and drive cultural change.