EXPLAINER: Although you might have heard the term “doughnut economics” rolling about, it has absolutely nothing to do with this sugary dessert, and everything to do with sustainable development.
Huh? What’s doughnut economics?
In the words of English economist Kate Raworth, the doughnut model answers the question:
“How can our city be a home to thriving people in a thriving place, while respecting the wellbeing of all people and the health of the whole plant?”
In short, the doughnut model of economics proposes a new way of living for humanity.
Why the doughnut shape? This sweet treat is a visual metaphor for the circular economy space between two uncrossable boundaries: the needs of the human species being the inner boundary, and planetary limits represented by the outer boundary. The sweet spot is a “safe and just space” between, indicating the boundaries within which humanity can thrive.
Anything less and the quality of life is reduced; anything more and we are living beyond our means and wreaking havoc on the planet as a result.
As a visual framework for sustainable development, it combines the concepts of social (quality of life and wellbeing) and environment (sustainable use of ecological processes).
The sweet spot
Ramworth first brought the term to public attention in a report published by Oxfam in 2012. Her subsequent book Doughnut Economics: seven ways to think like a 21st century economist has since its release in 2017 been picked up by policy makers, civil society, academia and businesses alike.
She set out to answer the question: how do we move the discipline of economics away from its growth-oriented goal to be more meaningful for humankind?
The model sets a new goal or compass for the direction of our economy and policy making. It stipulates that aside from abandoning the absolute objective of growth, 21st century economists need “systems thinking”.
This means an increased emphasis on the complex dynamics between things and how they interconnect, depend on, and affect one another.
The concept of the ecological ceiling, or planetary boundaries framework, comes out of the Stockholm Resilience Centre. In 2009, 28 internationally renowned scientists led by former director Johan Rockström came together to identify the processes that regulate the stability and resilience of the planet. The theory has since informed the worlds of science, policy, and business.
They proposed nine boundaries which humanity must not cross, to ensure that our species can meet our needs for generations to come. Crossing these boundaries risks generating large-scale and possibly irreversible environmental changes.
This is not the same as the “environmental tipping point”. This is the moment when small changes become significant enough to cause larger, abrupt, and irreversible effects – such as the climate tipping point of around 1°C to 2°C of warming.You can watch a recent documentary on planetary boundaries, Breaking Boundaries: The Science of Our Planet, a 2021 documentary film presented by David Attenborough and Johan Rockström.
This graph, released in 2011, looks much different now. Humanity has now exceeded the environmental ceiling for at least five of the nine dimensions: climate change, biodiversity loss, biogeochemicals, land use, and chemical pollution.
So, how do we fix this?
Historically, economists have held faith in something called the Environmental Kuznets Curve, which says that increasing consumption does not lead to endless environmental degradation. As the society becomes post-industrial, the curve predicts that there will be less environmental degradation as people adopt more environmentally conscious spending habits.
However, it now appears that a global peak in consumption is overshooting the capacity of the biosphere to withstand this peak. It seems that our capacity to destroy the natural environment is much larger than previously thought.
Economic development has historically come with a price tag of environmental degradation.
The rich are primarily to blame for the global climate crisis according to many studies, while the consequences fall the hardest on the Global South.
Modern neoliberalism calls for a free and unregulated market, without government “interference”.
When governments attempt to intervene (like with the carbon tax), it is seen as interference in the market rather than protection.
However, to get into the doughnut’s “safe and just space for humanity”, we need to tackle the distribution of global resources, consumption and production.
We need to ensure that the needs of humanity are met – not just our own.
No one should be left to fall into the hole at the centre of the doughnut – a place where we will go hungry, as the visual metaphor shows.
And beyond the doughnut’s “ceiling”… there is nothing sweet there either.