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Doughnut Economics: A framework to explore circularity

Updated: Nov 25, 2020

Earlier this year, the city of Amsterdam launched their “City Doughnut” - a tool representing how the city will embody the principles of a Doughnut Economy. British economist Kate Raworth’s Doughnut Economics envisions a world economy that looks like (you guessed it) – a doughnut, the shape representing the planetary limits within which society should thrive.

The “Doughnut”: The green ring represents a sweet-spot where our socio-economic systems should be placed, such that they respect (external) planetary boundaries, and fulfil (internal) societal needs.

The “Doughnut”: The green ring represents a sweet-spot where our socio-economic systems should be placed, such that they respect (external) planetary boundaries, and fulfil (internal) societal needs.

Amsterdam used this framework to explore what it would mean for Amsterdam to…

1. thrive?

2. thrive within its natural habitat?

3. respect the wellbeing of people worldwide?

4. respect the health of the whole planet?

To this end, a city-wide scan enabled the municipality to collect data on the different pillars of the doughnut: from the inner circle (with indicators for a thriving society), to the external circle (with indicators on planetary boundaries). For instance, to support Dutch consumption, the amount of land required worldwide was 2.5 times the area of the Netherlands. This exceeds their land uses’ ecological boundary. By analysing this status quo, policymakers can begin setting targets and action plans to bring the city closer to the sweet green spot of the Doughnut.

What is the big deal about the Doughnut, and how is it different from the Circular Economy?

Besides Amsterdam, the Doughnut Economy concept is being used to teach economics at universities, with a vision to reform how 21st-century economists think. According to the theory, to be able to balance societal well-being with ecological well-being calls for radical change in the way our economy functions. We need to start looking at our economy not separately, but hand-in-hand with social justice and ecological well-being. We need to move from our current extractive system to a regenerative one, from resource accumulation to fair redistribution.

For circular economy enthusiasts, these words may ring a bell! At its core, the Doughnut vision is in line with the principles of a regenerative and redistributive economy by design. The circular economy fits into this vision, by enhancing resource efficiency, promoting business models and incentives that support the flow of resources in such a system.

Another of the Doughnut’s core principles is, instead of growth in GDP being the hallmark of a society’s well-being, we should rather view well-being as the balance of human socio-economic and ecologic health. A circular economy puts this in action – as one of its goals is to manage our resources better and to decouple growth (and well-being) from resource use.

Kate Raworth’s TED talk on the Doughnut

Since both the circular economy (CE) and the Doughnut are new frameworks that are still evolving, it remains to be discussed how the CE aligns with the Doughnut. In my opinion, working towards a CE offers practical action and tools that feed into the transition to the macroeconomic vision of the doughnut. In order to achieve its core principles, a circular economy could act as an enabler that regenerates (with closed loops) and redistributes (with an open-source focus).

As new frameworks, both the CE and Doughnut still have several challenges to address. The blurry lines between all the different frameworks, systems and tools will start becoming clearer as we continue to put them into practice. While there are still data gaps and challenges to be addressed to perfect them, what already goes a long way is to create an environment where citizens and policymakers can experiment, learn and re-iterate to build an economy for the future. Amsterdam started this with a Circular Amsterdam Strategy, then built upon it with a birds-eye vision of the City Doughnut.

In the Indian context, the push around circularity is gaining ground. Viewing it with the Doughnut perspective can add to our efforts in making the Indian economy a just, fair and healthy circular economy. Isn’t it exciting to imagine what a truly circular India would look like? Which cities do you think can start visualising their versions of the City Doughnut?

About the Author

Kruti Munot is a Project Manager at GIZ, where she works with local governments in Africa on issues of climate change and urban development. She holds an MSc from the London School of Economics and Political Science and is based in Brussels, Belgium. Her interests lie in urban development, circular economy, and the role of financial institutions in driving sustainable development.

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