‘Doughnut Economics’: Can we meet the needs of all within the means of the planet?

Humanity’s challenge in the 21st Century is to meet the needs of all within the means of the planet. In other words, to ensure that no one falls short on life’s essentials while ensuring that collectively we do not overshoot the capacity of Earth’s life-supporting systems. Kate Raworth, a Senior Associate at Oxford University’s Environmental Change Institute, thinks this is possible, and in her bestselling book Doughnut Economics (published in 2017) she introduces the symbol of a doughnut to frame the challenge and guide human progress.

The Doughnut

The Doughnut is made up of an inner ring, known as the ‘social foundation’, and an outer ring, the ‘ecological ceiling’. The social foundation has twelve elements, identified by the world’s governments in the Sustainable Development Goals in 2015. The twelve dimensions are: health, education, water, energy, food, networks, housing, social equity, income and work, peace and justice, gender equality and political voice. The environmental ceiling consists of nine planetary boundaries: climate change, ocean acidification, chemical pollution, nitrogen and phosphorous loading, freshwater withdrawals, land conversion, biodiversity loss, air pollution and ozone layer depletion. Beyond these boundaries lie unacceptable environmental degradation and potential tipping points in Earth systems, but between them lies, as Kate Raworth describes it, the “environmentally safe and socially just space in which humanity can thrive.”

The issue: both exceeding the ecological ceiling and failing to meet the social foundation.

The issue we have currently is that some parts of the world are still below the social foundation (notably developing parts of Africa), while exceeding the ecological ceiling elsewhere, particularly in more developed countries. Currently, one in nine people globally are undernourished, 781 million adults are illiterate, a staggering 4.2 billion people do not have safely managed sanitation services and 24% of the global urban population live in slums.

Regarding the environment, atmospheric carbon dioxide concentration is currently at 400 parts per million and rising, despite the planetary boundary being 350 ppm at most. Furthermore, we are losing around 100-1000 species per million to extinction every year – this figure should be no more than 10 species per million in order to be sustainable. Lastly, we are currently releasing 164 million tons of nitrogen and phosphorous onto land in the form of fertiliser per year, despite the planetary boundary being 68.2 million tonnes per year. For us to occupy the “safe and just space for humanity” we will have to retreat from these two extremities concurrently. Like Raworth, I also think humanity is up to the challenge, however this will require adopting a number of key initiatives, highlighted by the author. In my opinion, the three most important of these are that we must design to distribute, create to regenerate and be agnostic about growth.

The Kuznets Curve – does it convey the wrong message?

Design to distribute. For much of the late 20th Century, there has been a ‘no pain, no gain’ mindset when it comes to inequality and income per capita. For example, the Kuznets Curve implies that as a society industrialises, the centre of the economy shifts from rural areas to the cities as rural laborers, such as farmers, begin to migrate seeking better-paying jobs. This migration, however, results in a large rural-urban income gap and rural populations decrease as urban populations increase. But according to Kuznets’s hypothesis, that same economic inequality is expected to decrease when a certain level of average income is reached and the processes associated with industrialisation, such as democratisation and the development of a welfare state, take hold. It is at this point in economic development that society is meant to benefit from trickle-down effect and an increase in per-capita income that effectively decreases economic inequality.

The issue with this model however is that it portrays inequality as a necessary step: in reality, it is a policy choice. Historical examples show that it is possible to develop as a country without inequality rising. The Asian ‘tiger economies’, such as Japan, South Korea and Indonesia, have combined rapid economic growth in the post-war era with low inequality and falling poverty rates. Instead of concentrating the gains of growth in the hands of the wealthy and assuming the rest of society will eventually benefit, we should design to distribute, chiefly by reinventing who controls land, money creation, enterprise, technology and knowledge. This will connect people more and maximise countries’ economic and social capacities.

Create to regenerate. In a similar way to the Kuznets Curve, the Environmental Kuznets Curve promotes the concept that countries’ levels of pollution rise as they develop and start to burn fossil fuels to aid their industrialisation, but then, after a certain level of development countries come up with innovative and more green ways to produce their energy, and thus pollution levels tend to fall.

While this trend has certainly been true for some countries in the past, the question this century is whether we can help developing countries skip out this damaging stage, which is ever more essential as the climate crisis becomes more acute. To do this, we need to change how manufacturing chains operates. Previously, we have seen an industrial system of extracting coal, oil and gas, burning them, then dumping carbon dioxide in the atmosphere, or nitrogen and phosphorus has been turned into fertiliser, before the effluent is offloaded into lakes and oceans. This system is known as the ‘industrial caterpillar’, only flowing in one direction. Instead of ‘Take, Make, Use, Lose’, the industrial caterpillar must be transformed into a ‘butterfly economy’.

The Butterfly Economy Model

We need to create a system of regeneration, whereby biological nutrients are regenerated after consumption, and the raw materials used in industrial production, in terms of minerals and energy sources, are restored after use, minimising waste.

Be agnostic about growth. Ever since our first attempts to walk as toddlers, we have embedded in our minds that upwards and forwards equates to success. For decades, this approach has been taken by governments who measure their success in a given year chiefly by how economic growth, and we idealise the famous economics diagram of GDP rising indefinitely over time.

But surely GDP can’t rise forever? W.W. Rostow, the former National Security Advisor of the United States, hypothesises that all countries go through five stages of growth in his 1960 book The Stages of Economic Growth: 1. The traditional society; 2. The preconditions for take-off; 3. The take-off; 4. The drive to maturity; 5. The age of high mass-consumption. Through these five stages, Rostow uses the metaphor of a plane to describe the pre-flight checks and altitude of growth. The flight of Rostow’s plane differs from any normal flight in one crucial way: the plane never actually lands, but rather continues to fly indefinitely. Is this possible?

Kate Raworth says that “keep-on flying passengers” believe “economic growth is still necessary – and so it must be possible”, whereas “prepare-for-landing” passengers think that “economic growth is no longer possible – and so it cannot be necessary.” Both chains of reasoning are not entirely coherent.

The former group turn to green growth as the way growth can be sustained, hoping pollution will become ‘decoupled’ from growth. Although investment in renewable energies is a vital part of the future of this battle, I don’t think they should be used to desperately maintain the same levels of growth that we have seen before. If growth was kept at the same level, the amount of decoupling that would need to be unprecedented. Relative decoupling would not nearly be enough – we would need significant absolute decoupling, something which would not occur if even one major economy failed to heed this necessity.

The latter group of thinkers believe growth should cease completely, and some go as far to say that we should start a phase of ‘degrowth’, or reducing economic production. I disagree with this philosophy too, as it still means our primary focus is on growth (or the lack of). We need a change of emphasis: “rather than creating economies that grow, whether or not they make us thrive, create economies that make us thrive, whether or not they grow.”

Perhaps there will be another technological revolution in the next twenty years that creates unprecedented methods of carbon capture, or allows for water to be purified on scales never seen before; after all, no one predicted the Green Revolution of the 1960s and the creation of artificial fertiliser that supports as much as half of all human life. While this technological optimism is a comfort to those who hope for continued growth, this optimism cannot be relied upon, and governments across the world must take responsibility for getting their respective nations within the Doughnut. Raworth said herself that the Doughnut model will constantly be added to and improved by future generations, and so it is not perfect at this stage. However, the Doughnut is a paradigm-shifting idea that reframes how success can be thought of, and it provides a better measure than any that exists currently.

Bibliography

Raworth, K. (2017). Doughnut Economics: seven ways to think like a 21st-century economist. London: Random House Business Books. 

http://www.sciencedirect.com. Environmental Kuznets Curve – an overview | ScienceDirect Topics. [online] Available at: https://www.sciencedirect.com/topics/earth-and-planetary-sciences/environmental-kuznets-curve. 

doughnuteconomics.org. National Doughnuts Data Explorer | DEAL. Available at: https://doughnuteconomics.org/tools-and-stories/22 [Accessed 7 Jun. 2022]. 

Stockholm Resilience Centre (2015). The nine planetary boundaries. http://www.stockholmresilience.org. Available at: https://www.stockholmresilience.org/research/planetary-boundaries/the-nine-planetary-boundaries.html. 

FutureLearn. The plane of economic growth took off, but where will it land? Available at: https://www.futurelearn.com/info/courses/global-prosperity/0/steps/33982 [Accessed 7 Jun. 2022].