Doughnut (economic model)
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The Doughnut, or Doughnut economics, is a visual framework for
sustainable development Sustainable development is an organizing principle for meeting human development goals while also sustaining the ability of natural systems to provide the natural resources and ecosystem services on which the economy and society depend. The des ...
– shaped like a
doughnut A doughnut or donut () is a type of food made from leavened fried dough. It is popular in many countries and is prepared in various forms as a sweet snack that can be homemade or purchased in bakeries, supermarkets, food stalls, and franc ...
or
lifebelt A lifebuoy is a life-saving buoy designed to be thrown to a person in water, to provide buoyancy and prevent drowning. Some modern lifebuoys are fitted with one or more seawater-activated lights, to aid rescue at night. Other names Other na ...
– combining the concept of
planetary boundaries Planetary boundaries is a concept highlighting human-caused perturbations of Earth systems making them relevant in a way not accommodated by the environmental boundaries separating the three ages within the Holocene epoch. Crossing a planetary ...
with the complementary concept of social boundaries. The name derives from the shape of the diagram, i.e. a disc with a hole in the middle. The centre hole of the model depicts the proportion of people that lack access to life's essentials (
healthcare Health care or healthcare is the improvement of health via the prevention, diagnosis, treatment, amelioration or cure of disease, illness, injury, and other physical and mental impairments in people. Health care is delivered by health profe ...
,
education Education is a purposeful activity directed at achieving certain aims, such as transmitting knowledge or fostering skills and character traits. These aims may include the development of understanding, rationality, kindness, and honesty. Va ...
,
equity Equity may refer to: Finance, accounting and ownership * Equity (finance), ownership of assets that have liabilities attached to them ** Stock, equity based on original contributions of cash or other value to a business ** Home equity, the dif ...
and so on) while the crust represents the ecological ceilings (
planetary boundaries Planetary boundaries is a concept highlighting human-caused perturbations of Earth systems making them relevant in a way not accommodated by the environmental boundaries separating the three ages within the Holocene epoch. Crossing a planetary ...
) that life depends on and must not be
overshot A water wheel is a machine for converting the energy of flowing or falling water into useful forms of power, often in a watermill. A water wheel consists of a wheel (usually constructed from wood or metal), with a number of blades or buckets ...
. The diagram was developed by
University of Oxford , mottoeng = The Lord is my light , established = , endowment = £6.1 billion (including colleges) (2019) , budget = £2.145 billion (2019–20) , chancellor ...
economist
Kate Raworth Kate Raworth (born 13 December 1970) is an English economist known for " doughnut economics", which she understands as an economic model that balances between essential human needs and planetary boundaries. She is Senior Associate at Oxford Unive ...
in her 2012
Oxfam Oxfam is a British-founded confederation of 21 independent charitable organizations focusing on the alleviation of global poverty, founded in 1942 and led by Oxfam International. History Founded at 17 Broad Street, Oxford, as the Oxford Co ...
paper ''A Safe and Just Space for Humanity'' and elaborated upon in her 2017 book '' Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist'' and paper. The framework was proposed to regard the performance of an
economy An economy is an area of the production, distribution and trade, as well as consumption of goods and services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with the ...
by the extent to which the needs of people are met without overshooting Earth's ecological ceiling. The main goal of the new model is to re-frame economic problems and set new goals. In this model, an economy is considered prosperous when all twelve social foundations are met without overshooting any of the nine ecological ceilings. This situation is represented by the area between the two rings, considered by its creator as the safe and just space for humanity.
Kate Raworth Kate Raworth (born 13 December 1970) is an English economist known for " doughnut economics", which she understands as an economic model that balances between essential human needs and planetary boundaries. She is Senior Associate at Oxford Unive ...
noted the planetary boundaries concept does not take human wellbeing into account (although, if Earth's ecosystem dies then all wellbeing is moot). She suggested social boundaries should be combined with the planetary boundaries structure. Adding measures such as jobs, education, food, access to water, health services and energy helps to accommodate an environmentally safe space compatible with
poverty eradication Poverty reduction, poverty relief, or poverty alleviation, is a set of measures, both economic and humanitarian, that are intended to permanently lift people out of poverty. Measures, like those promoted by Henry George in his economics cl ...
and "rights for all". Within planetary limits and an equitable social foundation lies a doughnut shaped area which is the area where there is a "safe and just space for humanity to thrive in".Climate change: Understanding Rio+20
UN Office for the Coordination of Humanitarian Affairs, ''ITIN'', 3 April 2012.


Indicators


Social foundations

The social foundations are inspired by the social aims of the
Sustainable Development Goals The Sustainable Development Goals (SDGs) or Global Goals are a collection of 17 interlinked objectives designed to serve as a "shared blueprint for peace and prosperity for people and the planet, now and into the future".United Nations (2017) R ...
of the
United Nations The United Nations (UN) is an intergovernmental organization whose stated purposes are to maintain international peace and international security, security, develop friendly relations among nations, achieve international cooperation, and be ...
. These are: *
Food security Food security speaks to the availability of food in a country (or geography) and the ability of individuals within that country (geography) to access, afford, and source adequate foodstuffs. According to the United Nations' Committee on World F ...
*
Health Health, according to the World Health Organization, is "a state of complete physical, mental and social well-being and not merely the absence of disease and infirmity".World Health Organization. (2006)''Constitution of the World Health Organiza ...
*
Education Education is a purposeful activity directed at achieving certain aims, such as transmitting knowledge or fostering skills and character traits. These aims may include the development of understanding, rationality, kindness, and honesty. Va ...
*
Income Income is the consumption and saving opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms. Income is difficult to define conceptually and the definition may be different across fields. For ...
and work (the latter is not limited to compensated employment but also includes things such as
housekeeping Housekeeping is the management and routine support activities of running an organised physical institution occupied or used by people, like a house, ship, hospital or factory, such as tidying, cleaning, cooking, routine maintenance, shopping, ...
) *
Peace Peace is a concept of societal friendship and harmony in the absence of hostility and violence. In a social sense, peace is commonly used to mean a lack of conflict (such as war) and freedom from fear of violence between individuals or groups. ...
and
justice Justice, in its broadest sense, is the principle that people receive that which they deserve, with the interpretation of what then constitutes "deserving" being impacted upon by numerous fields, with many differing viewpoints and perspective ...
* Political voice *
Social equity Social equity is concerned with justice and Social justice, fairness of social policy. Since the 1960s, the concept of social equity has been used in a variety of institutional contexts, including education and public administration. Overview D ...
*
Gender equality Gender equality, also known as sexual equality or equality of the sexes, is the state of equal ease of access to resources and opportunities regardless of gender, including economic participation and decision-making; and the state of valuing d ...
*
Housing Housing, or more generally, living spaces, refers to the construction and assigned usage of houses or buildings individually or collectively, for the purpose of shelter. Housing ensures that members of society have a place to live, whether it ...
*
Networks Network, networking and networked may refer to: Science and technology * Network theory, the study of graphs as a representation of relations between discrete objects * Network science, an academic field that studies complex networks Mathematics ...
*
Energy In physics, energy (from Ancient Greek: ἐνέργεια, ''enérgeia'', “activity”) is the quantitative property that is transferred to a body or to a physical system, recognizable in the performance of work and in the form of heat a ...
*
Water Water (chemical formula ) is an inorganic, transparent, tasteless, odorless, and nearly colorless chemical substance, which is the main constituent of Earth's hydrosphere and the fluids of all known living organisms (in which it acts as a ...


Ecological ceilings

The nine ecological ceilings are from the planetary boundaries put forward by a group of Earth-system scientists led by Johan Rockström and
Will Steffen Will Steffen (born 1947) is an American chemist. He was the executive director of the Australian National University (ANU) Climate Change Institute and a member of the Australian Climate Commission until its dissolution in September 2013. From ...
. These are: *
Climate change In common usage, climate change describes global warming—the ongoing increase in global average temperature—and its effects on Earth's climate system. Climate change in a broader sense also includes previous long-term changes to E ...
— the human-caused emissions of
greenhouse gas A greenhouse gas (GHG or GhG) is a gas that Absorption (electromagnetic radiation), absorbs and Emission (electromagnetic radiation), emits radiant energy within the thermal infrared range, causing the greenhouse effect. The primary greenhouse ...
es such as
carbon dioxide Carbon dioxide (chemical formula ) is a chemical compound made up of molecules that each have one carbon atom covalently double bonded to two oxygen atoms. It is found in the gas state at room temperature. In the air, carbon dioxide is transpar ...
and
methane Methane ( , ) is a chemical compound with the chemical formula (one carbon atom bonded to four hydrogen atoms). It is a group-14 hydride, the simplest alkane, and the main constituent of natural gas. The relative abundance of methane on Eart ...
trap heat in the atmosphere, changing the Earth's climate. *
Ocean acidification Ocean acidification is the reduction in the pH value of the Earth’s ocean. Between 1751 and 2021, the average pH value of the ocean surface has decreased from approximately 8.25 to 8.14. The root cause of ocean acidification is carbon dioxid ...
— when human-emitted carbon dioxide is absorbed into the oceans, it makes the water more acidic. For example, this lowers the ability of marine life to grow skeletons and shells. *
Chemical pollution A chemical substance is a form of matter having constant chemical composition and characteristic properties. Some references add that chemical substance cannot be separated into its constituent elements by physical separation methods, i.e., wit ...
— releasing toxic materials into nature decreases
biodiversity Biodiversity or biological diversity is the variety and variability of life on Earth. Biodiversity is a measure of variation at the genetic (''genetic variability''), species (''species diversity''), and ecosystem (''ecosystem diversity'') l ...
and lowers the fertility of animals (including humans). * Nitrogen and phosphorus loading — inefficient or excessive use of
fertiliser A fertilizer (American English) or fertiliser (British English; see spelling differences) is any material of natural or synthetic origin that is applied to soil or to plant tissues to supply plant nutrients. Fertilizers may be distinct from ...
leads to the fertilizer running off to water bodies, where they cause algae blooms which kills underwater life. * Freshwater withdrawals — using too much freshwater dries up the source which may damage the
ecosystem An ecosystem (or ecological system) consists of all the organisms and the physical environment with which they interact. These biotic and abiotic components are linked together through nutrient cycles and energy flows. Energy enters the syste ...
and be unusable after. *
Land conversion Land development is the alteration of landscape in any number of ways such as: * Changing landforms from a natural or semi-natural state for a purpose such as agriculture or housing * Subdividing real estate into lots, typically for the purpose ...
— converting land for economic activity (such as creating roads and farmland) damages or removes the habitat for wildlife, removes
carbon sink A carbon sink is anything, natural or otherwise, that accumulates and stores some carbon-containing chemical compound for an indefinite period and thereby removes carbon dioxide () from the atmosphere. Globally, the two most important carbon si ...
s and disrupts natural cycles. *
Biodiversity loss Biodiversity loss includes the worldwide extinction of different species, as well as the local reduction or loss of species in a certain habitat, resulting in a loss of biological diversity. The latter phenomenon can be temporary or permanent, de ...
— economic activity may cause a reduction in the number and variety of
species In biology, a species is the basic unit of classification and a taxonomic rank of an organism, as well as a unit of biodiversity. A species is often defined as the largest group of organisms in which any two individuals of the appropriate s ...
. This makes ecosystems more vulnerable and may lower their capacity of sustaining life and providing
ecosystem services Ecosystem services are the many and varied benefits to humans provided by the natural environment and healthy ecosystems. Such ecosystems include, for example, agroecosystems, forest ecosystem, grassland ecosystems, and aquatic ecosystems. Th ...
. *
Air pollution Air pollution is the contamination of air due to the presence of substances in the atmosphere that are harmful to the health of humans and other living beings, or cause damage to the climate or to materials. There are many different types ...
— the emission of aerosols (small particles) has a negative impact on the health of species. It can also affect precipitation and cloud formation. * Ozone layer depletion — some economic activity emits gases that damage the Earth's
ozone layer The ozone layer or ozone shield is a region of Earth's stratosphere that absorbs most of the Sun's ultraviolet radiation. It contains a high concentration of ozone (O3) in relation to other parts of the atmosphere, although still small in rela ...
. Because the ozone layer shields Earth from harmful radiation, its depletion results for example in
skin cancer Skin cancers are cancers that arise from the skin. They are due to the development of abnormal cells that have the ability to invade or spread to other parts of the body. There are three main types of skin cancers: basal-cell skin cancer (BCC) ...
in animals.


Critique to mainstream economic theory

The doughnut model is still a collection of goals that may be pursued through different actions by different actors, and does not include specific models related to markets or human behavior. The book ''Doughnut Economics'' consists of critiques and perspectives of what should be sought after by society as a whole. The critiques found in the book are targeted at certain economic models and their common base. The mainstream economic models of the 20th century, defined here as those taught the most in Economics introductory courses around the world, are neoclassical. The
Circular Flow The circular flow of income or circular flow is a model of the economy in which the major exchanges are represented as flows of money, goods and services, etc. between economic agents. The flows of money and goods exchanged in a closed circuit ...
published by
Paul Samuelson Paul Anthony Samuelson (May 15, 1915 – December 13, 2009) was an American economist who was the first American to win the Nobel Memorial Prize in Economic Sciences. When awarding the prize in 1970, the Swedish Royal Academies stated that he "h ...
in 1944 and the supply and demand curves published by William S. Jevons in 1862 are canonical examples of neoclassical economic models. Focused on the observable money flows in a given administrative unit and describing preferences mathematically, these models ignore the environments in which these objects are embedded: human minds, society, culture, and the natural environment. This omission was viable while the human population did not collectively overwhelm the Earth's systems, which is no longer the case. Furthermore, these models were created before statistical testing and research were possible. They were based, then, on assumptions about human behavior converted into "stylized facts". The origins of these assumptions are philosophical and pragmatic, simplifying and distorting the reflections of thinkers such as
Adam Smith Adam Smith (baptized 1723 – 17 July 1790) was a Scottish economist and philosopher who was a pioneer in the thinking of political economy and key figure during the Scottish Enlightenment. Seen by some as "The Father of Economics"——— ...
into Newtonian-resembling curves on a graph so that they could be of presumed practical use in predicting, for example, consumer choice. The body of neoclassical economic theory grew and became more sophisticated over time, and competed with other theories for the post-mainstream economic paradigm of the North Atlantic. In the 1930s,
Keynesian theory Keynesian economics ( ; sometimes Keynesianism, named after British economist John Maynard Keynes) are the various macroeconomic theories and models of how aggregate demand (total spending in the economy) strongly influences economic output and ...
was it, and after the 1960s,
monetarism Monetarism is a school of thought in monetary economics that emphasizes the role of governments in controlling the amount of money in circulation. Monetarist theory asserts that variations in the money supply have major influences on measures ...
gained prominence. One element remained as the policy prescriptions shifted: the "
rational economic man The term ''Homo economicus'', or economic man, is the portrayal of humans as Agency (philosophy), agents who are consistently Rationality, rational and narrowly Rational egoism, self-interested, and who pursue their subjectively defined ends Opt ...
" persona on which theories were based. Raworth, the creator of Doughnut Economics, denounces this literary invention as a perverse one, for its effects on its learners' assumptions about human behavior and, consequently, their own real behavior. Examples of this phenomenon in action have been documented, as have the effects of the erosion of trust and community on human well-being.


Real-world economies in the Doughnut perspective

Kate Raworth explains the doughnut economy is based on the premise that "Humanity's 21st century challenge 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 (from food and housing to healthcare and political voice), while ensuring that collectively we do not overshoot our pressure on Earth's life-supporting systems, on which we fundamentally depend – such as a stable climate, fertile soils, and a protective ozone layer. The Doughnut of social and planetary boundaries is a new framing of that challenge, and it acts as a compass for human progress this century." Raworth states that "significant GDP growth is very much needed" for low- and middle-income countries to be able to meet the goals of the social foundation for their citizens. Leaning on Earth studies and economics, Raworth maps out the current shortfalls and overshoots, as illustrated in Figure 2. The Doughnut framework has been used to map localized socio-environmental performance in Erhai lake-catchment (China), Scotland, Wales, the UK, South Africa, Netherlands, India, globally and many more. In April 2020, Kate Raworth was invited to join the City of Amsterdam's post-pandemic economic planning efforts. An empirical application of the doughnut model showed in 2018 that so far across 150 countries not a single country satisfies its citizens' basic needs while maintaining a globally sustainable level of resource use.


Criticism

Branko Milanovic Branko (Cyrillic script: Бранко; ) is a South Slavic male given name found in all of the former Yugoslavia. It is related to the names Branimir and Branislav, and the female equivalent is Branka. People named Branko include: * Branko Babi ...
, at CUNY's Stone Center on Socio-Economic Inequality, said that for the donut theory to become popular, people would have to "magically" become "indifferent to how well we do compared to others, and not really care about wealth and income."


See also

* Ecological economics * ''
Prosperity Without Growth ''Prosperity Without Growth'' is a book by author and economist Tim Jackson. It was originally released as a report by the Sustainable Development Commission. The study rapidly became the most downloaded report in the Commission's nine-year h ...
'' * '' The Closing Circle''


References

{{reflist Economics models Ecological economics