Doughnut Economics

Published Mar 22, 2024

Definition of Doughnut Economics

Doughnut Economics is a visual framework for sustainable development – shaped like a doughnut or lifebuoy – devised by English economist Kate Raworth. It combines the concept of planetary boundaries with the complementary concept of a social foundation, aiming to ensure that everyone has access to life’s essentials without stressing the planet’s resources beyond its capacity to regenerate. The inner ring of the “doughnut” represents the minimum standards of living based on the United Nations’ Sustainable Development Goals, while the outer ring represents the ecological ceiling or the planetary boundaries that should not be crossed to avoid damaging Earth’s life systems.

Example

Consider a city implementing doughnut economics to guide its development policies. The city’s leadership decides to drastically reduce carbon emissions and waste, aiming to operate within the Earth’s ecological limits. At the same time, they work to ensure that all residents have access to quality healthcare, education, housing, and fair employment, securing the social foundation for everyone. By doing so, the city is striving to remain within the “safe and just space for humanity” that the doughnut model describes – neither falling into the hole in the middle of the doughnut by failing to meet people’s basic needs, nor overshooting the outer boundary and degrading the planet.

Why Doughnut Economics Matters

Doughnut economics challenges traditional economic models that prioritize GDP growth above all other goals, often at the expense of the environment and social well-being. It provides a more holistic view of economic success, emphasizing that a thriving economy should operate within the Earth’s ecological limits while ensuring that no one falls short on life’s essentials. By adopting this framework, societies can aim for sustainability and justice, reconciling human needs with the planet’s health. This model is particularly relevant in the context of climate change, resource depletion, and rising inequality, offering a roadmap for achieving sustainable development in the 21st century.

Frequently Asked Questions (FAQ)

How can governments and businesses apply doughnut economics?

Governments and businesses can apply doughnut economics by redesigning their policies and practices around the model’s twin goals: meeting the basic needs of all people and staying within planetary boundaries. This might involve investing in renewable energy, sustainable agriculture, and circular economy initiatives that recycle and reuse resources. They can also implement social policies that ensure equitable access to essentials like education, healthcare, and social security, actively working towards closing the gap between the richest and poorest, and between humanity and the planet.

What are the criticisms of doughnut economics?

Critics of doughnut economics argue that its goals, while admirable, may be overly idealistic and difficult to implement on a global scale given current economic structures and power dynamics. Some economists question the feasibility of significant parts of the global economy transitioning away from growth-dependency without causing widespread economic instability. Others point out the challenge of defining and measuring some of the model’s qualitative aspects, such as social equity and environmental sustainability, in practical, actionable terms.

How does doughnut economics differ from traditional economic models?

Unlike traditional economic models that focus on indicators like GDP growth, doughnut economics emphasizes the balance between social well-being and environmental sustainability. It challenges the notion that economic prosperity is the sole indicator of a society’s success and argues that economic activities should not compromise the environment or people’s quality of life. By focusing on a “safe and just space for humanity,” it aims for an inclusive and ecologically sustainable economy.

Doughnut economics offers a comprehensive, integrated approach to understanding and tackling the world’s most pressing challenges. By reimagining economic success to include the health of our planet and the well-being of all its inhabitants, this innovative model provides a hopeful, actionable framework for achieving a sustainable and equitable future.