Amidst 2020’s sensational news stories, there was one headline that really stuck out to me, although I’m sure few others noticed: “Amsterdam to embrace ‘doughnut’ model to mend post-coronavirus economy.” In the field of economics—where the current generally accepted theories and models have prevailed for decades, a major city’s formal adoption of an economic model that is less than 10 years old (and never implemented at scale) is BIG news.
So, doughnut economics: What does that even mean? Just when you think you’ve gotten a handle on what the circular economy is, I’m here to tell you this thing called the doughnut economy is the next new star in the world of sustainability.
Even though it just made big headlines in early 2020, the idea of doughnut economics has actually been around since 2012, when self-declared “renegade economist” Kate Raworth, then a senior researcher at UK-based charity Oxfam GB, published a discussion paper titled, “A safe and just space for humanity.” In the paper, Raworth notes, “Humanity’s challenge in the 21st century is to eradicate poverty and achieve prosperity for all within the means of the planet’s limited natural resources.”
Her solution was a model shaped like a doughnut: The inner edge of the doughnut represents the social foundation, which represents the provision of essential life needs such as water, food, housing, and education (the social boundary); the outer edge of the doughnut represents the maximum ecological ceiling, beyond which we risk negative impacts on things like climate change, pollution, biodiversity loss and ocean acidification (the planetary boundary). Simply put, we must strive to operate within the “dough” of the doughnut.
Raworth’s model (which she expanded on in her 2017 book, Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist) is in fact, based on precedent—just not the ones mainstream economists use. The necessities of the social foundation were inspired by the United Nations’ Millennium Development Goals at a time when they were in the process of being reworked into the new Sustainable Development Goals. The indicators of the ecological ceiling are based on the nine interlinked planetary boundaries established by Rockström et al in a 2009 article, “A safe operating space for humanity,” published in the prestigious academic journal Nature.
While the doughnut economics model presents many upsides to traditional models, many would consider Amsterdam’s move risky. Amsterdam, however, considered to be one of the most liberal and progressive cities in the world, is not one to shy away from things considered to be on the fringe. Amsterdam has been working towards prioritizing a circular economy since producing a study in 2015 on that very possibility. And now, with its Amsterdam Circular Strategy 2020-2025, Amsterdam has married the complementary concepts of the doughnut economy with the circular economy. The strategy “aims to transform Amsterdam into a city that respects and protects the planet as a whole, as well as each of its local residents.”
When we take stock of what mainstream economics has done for (or, rather, to) our environment and society, we must admit it cannot remain the prevailing model moving forward. We must change our mental and economic models—and that has never been clearer than in the ongoing wake of the pandemic. Somehow, we must figure out how to provide life essentials for all while staying within a sustainable environmental boundary. Kate Raworth may just have that figured out. And although it may be risky to adopt such a young and, more or less, untested economic model, it sounds a good deal more promising to me than continuing with the status quo. After all, it’s 2021 now (thankfully!)—a new year and a fresh start. I say out with the old and in with the new!