Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist

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Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist Page 5

by Kate Raworth


  One promising place to start is by looking to the long lineage of unsung economic thinkers whose aim was to put humanity back at the heart of economic thought. Back in 1819 the Swiss economist Jean Sismondi sought to define a new approach to political economy with human welfare, not wealth accumulation, as its goal. The English social thinker John Ruskin followed him in the 1860s, railing against the economic thinking of his day, declaring that, ‘There is no wealth but life … That country is the richest which nourishes the greatest numbers of noble and happy human beings.’18 When Mohandas Gandhi discovered Ruskin’s book in the early 1900s, he set out to bring its ideas to life on a collective farm in India, in the name of creating an economy that elevated the moral being. In the late twentieth century, E. F. Schumacher – best known for arguing that ‘small is beautiful’ – sought to place ethics and the human scale at the heart of economic thought. And the Chilean economist Manfred Max-Neef proposed that development be focused on realising a set of fundamental human needs – such as sustenance, participation, creativity, and a sense of belonging – in ways that are adapted to the context and culture of each society.19 Big-picture thinkers such as these have for centuries offered alternative visions of what the economy is for, but their ideas have been kept far from the eyes and ears of economics students, dismissed as the touchy-feely school of ‘humanistic economics’ (begging the question of what the rest of it has been).

  Their humanistic project has, at last, gained far wider attention and credibility. You could say it began to go mainstream with the work of the economist and philosopher Amartya Sen – work for which he won a Nobel-Memorial prize. The focus of development, Sen argues, should be on ‘advancing the richness of human life, rather than the richness of the economy in which human beings live’.20 Instead of prioritising metrics like GDP, the aim should be to enlarge people’s capabilities – such as to be healthy, empowered and creative – so that they can choose to be and do things in life that they value.21 And realising those capabilities depends upon people having access to the basics of life – adapted to the context of each society – ranging from nutritious food, healthcare and education to personal security and political voice.

  In 2008, the French President Nicolas Sarkozy invited twenty-five international economic thinkers, led by Sen and fellow Nobel-Memorial winner Joseph Stiglitz, to assess the measures of economic and social progress that currently guide policymaking. On surveying the state of indicators in use they came to a blunt conclusion: ‘Those attempting to guide the economy and our societies,’ they wrote, ‘are like pilots trying to steer a course without a reliable compass.’22 None of us want to be passengers on that directionless jet. We urgently need a way to help policymakers, activists, business leaders and citizens alike to steer a wise course through the twenty-first century. So here’s a compass fit for the journey ahead.

  A twenty-first-century compass

  First, to get our bearings, let’s put GDP growth aside and start afresh with a fundamental question: what enables human beings to thrive? A world in which every person can lead their life with dignity, opportunity and community – and where we can all do so within the means of our life-giving planet. In other words, we need to get into the Doughnut. It’s the visual concept that I first drew in 2011 while working with Oxfam, and it is inspired by cutting-edge Earth-system science. Over the past five years, through conversations with scientists, activists, academics and policymakers, I have renewed and updated it to reflect the latest in both global development goals and scientific understanding. So let me introduce you to the one doughnut that might actually turn out to be good for us.

  The Doughnut: a twenty-first-century compass. Between its social foundation of human well-being and ecological ceiling of planetary pressure lies the safe and just space for humanity.

  What exactly is the Doughnut? Put simply, it’s a radically new compass for guiding humanity this century. And it points towards a future that can provide for every person’s needs while safeguarding the living world on which we all depend. Below the Doughnut’s social foundation lie shortfalls in human well-being, faced by those who lack life’s essentials such as food, education and housing. Beyond the ecological ceiling lies an overshoot of pressure on Earth’s life-giving systems, such as through climate change, ocean acidification and chemical pollution. But between these two sets of boundaries lies a sweet spot – shaped unmistakably like a doughnut – that is both an ecologically safe and socially just space for humanity. The twenty-first-century task is an unprecedented one: to bring all of humanity into that safe and just space.

  The Doughnut’s inner ring – its social foundation – sets out the basics of life on which no one should be left falling short. These twelve basics include: sufficient food; clean water and decent sanitation; access to energy and clean cooking facilities; access to education and to healthcare; decent housing; a minimum income and decent work; and access to networks of information and to networks of social support. Furthermore, it calls for achieving these with gender equality, social equity, political voice, and peace and justice. Since 1948, international human rights norms and laws have sought to establish every person’s claim to the vast majority of these basics, no matter how much or how little money or power they have. Setting a target date to achieve all of them for every person alive may seem an extraordinary ambition, but it is now an official one. They are all included in the United Nation’s Sustainable Development Goals – agreed by 193 member countries in 2015 – and the vast majority of these goals are to be achieved by 2030.23

  Since the mid-twentieth century, global economic development has already helped many millions of people worldwide escape deprivation. They have become the first generations in their families to lead long, healthy and educated lives, with enough food to eat, clean water to drink, electricity in their homes, and money in their pockets – and, for many, this transformation has been accompanied by greater equality between women and men, and greater political voice. But global economic development has also fuelled a dramatic increase in humanity’s use of Earth’s resources, at first driven by the resource-intensive lifestyles of today’s high-income countries, and more recently redoubled by the rapid growth of the global middle class. It is an economic era that has come to be known as the Great Acceleration, thanks to its extraordinary surge in human activity. Between 1950 and 2010, the global population almost trebled in size, and real World GDP increased sevenfold. Worldwide, freshwater use more than trebled, energy use increased fourfold, and fertiliser use rose over tenfold.

  The effects of this dramatic intensification of human activity are clearly visible in an array of indicators that monitor Earth’s living systems. Since 1950 there has been an accompanying surge in ecological impacts, from the build-up of greenhouse gases in the atmosphere to ocean acidification and biodiversity loss.24 ‘It is difficult to overestimate the scale and speed of change,’ says Will Steffen, the scientist who led the study documenting these trends. ‘In a single lifetime humanity has become a planetary-scale geological force … This is a new phenomenon and indicates that humanity has a new responsibility at a global level for the planet.’25

  This Great Acceleration in human activity has clearly put our planet under pressure. But just how much pressure can it take before the very life-giving systems that sustain us start to break down? In other words, what determines the Doughnut’s ecological ceiling? To answer that question, we have to look back over the past 100,000 years of life on Earth. For almost all of that time – as early humans trekked out of Africa and blazed a trail across continents – Earth’s average temperature spiked up and down. But during just the last 12,000 years or so, it has been warmer, and far more stable too. This recent period of Earth’s history is known as the Holocene. And it is a word well worth knowing because it has given us the best home we’ve ever had.

  Home sweet home in the Holocene. The graph shows Earth’s changing temperature over the past 100,000 years, based on data from the Greenland ice
core. The last 12,000 years have been unusually stable.26

  Agriculture was invented on many continents simultaneously during the Holocene and scientists believe that this was no coincidence. The newfound stability of Earth’s climate made it possible for the descendants of hunter gatherers to settle down and live by the seasons: anticipating the rains, selecting and planting seeds, and reaping the harvest.27 It is likewise no coincidence that all great human civilisations – from the Indus Valley, Ancient Egypt, and Shang Dynasty China to the Mayans, Greeks and Romans – emerged and flourished in this geological epoch. It is the only known phase of our planet’s history in which billions of human beings can thrive.

  More extraordinarily, scientists suggest that, if undisturbed, the Holocene’s benevolent conditions would be likely to continue for another 50,000 years due to the unusually circular orbit that Earth is currently making of the sun – a phenomenon so rare that it last happened 400,000 years ago.28 This is certainly something to sit back and ponder. Here we are on the only known living planet, born into its most hospitable era which, thanks to the odd way we happen to be circling the sun right now, is set to run and run. We would have to be crazy to kick ourselves out of the Holocene’s sweet spot, but that is, of course, exactly what we have been doing. Our growing pressure on the planet has turned us, humanity, into the single biggest driver of planetary change. Thanks to the scale of our impact, we have now left behind the Holocene and entered uncharted territory, known as the Anthropocene: the first geological epoch to have been shaped by human activity.29 What will it take, now that we are in the Anthropocene, to sustain the benevolent conditions that we knew in our Holocene home: its stable climate, ample fresh water, thriving biodiversity, and healthy oceans?

  In 2009 an international group of Earth-system scientists, led by Johan Rockström and Will Steffen, took on this question and identified nine critical processes – such as the climate system and the freshwater cycle – that, together, regulate Earth’s ability to maintain Holocene-like conditions (all nine are described more fully in the Appendix). For each of these nine processes, they asked how much pressure it can take before the stability that has allowed humanity to thrive for thousands of years is put in jeopardy, tipping Earth into an unknown state in which novel and unexpected changes are likely to happen. The catch, of course, is that it is not possible to pinpoint exactly where danger lies and, given that many of the shifts could be irreversible, we’d be wise not to find out the hard way. So the scientists proposed a set of nine boundaries, like guard-rails, where they believe each danger zone begins – equivalent to placing warning signs upstream of a river’s treacherous but hidden waterfalls.

  What do those warning signs say? To avoid dangerous climate change, for example, keep the concentration of carbon dioxide in the atmosphere below 350 parts per million. In terms of limiting land conversion, ensure that at least 75% of once-forested land remains forested. And when it comes to using chemical fertilisers, add at most 62 million tonnes of nitrogen and 6 million tonnes of phosphorus to Earth’s soils each year. There are, of course, many uncertainties behind these top-level numbers – including questions about the regional implications of such global limits – and the science is continually evolving. But in essence, the nine planetary boundaries create the best picture we have yet seen of what it will take to hang on to the home-sweet-home of the Holocene, but to do so in the human-dominated age of the Anthropocene. And it is these nine planetary boundaries that define the Doughnut’s ecological ceiling: the limits beyond which we should put no further pressure on the planet if we want to safeguard the stability of our home.

  Together, the social foundation of human rights and the ecological ceiling of planetary boundaries create the inner and outer boundaries of the Doughnut. And they are, of course, deeply interconnected. If you are itching to pick up a pen and start drawing arrows on the Doughnut to explore how each of the boundaries might affect the others, you’ve got the idea – and the Doughnut will soon start to look more like a bowl of spaghetti.

  Take, for example, what happens when hillsides are deforested. Land conversion of this kind is likely to accelerate biodiversity loss, weaken the freshwater cycle, and exacerbate climate change – and these impacts, in turn, put increased stress on remaining forests. Furthermore, the loss of forests and secure water supplies may leave local communities more vulnerable to outbreaks of disease and to lower food production, resulting in children dropping out of school. And when kids drop out of school, poverty in all its forms can have knock-on effects for generations.

  Knock-on effects can, of course, be positively reinforcing, too. Reforesting hillsides tends to enrich biodiversity, increase soil fertility and water retention, and help sequester carbon dioxide. And the benefits for local communities may be many: more diverse forest food and fibre to harvest; greater security of water supply; improved nutrition and health; and more resilient livelihoods. It may be tempting, for simplicity’s sake, to seek to devise policies addressing each one of the planetary and social boundaries in turn, but that simply won’t work: their interconnectedness demands that they each be understood as part of a complex socio-ecological system and hence be addressed within a greater whole.30

  Focusing on these many interconnections across the Doughnut, it becomes clear that human thriving depends upon planetary thriving. Growing sufficient, nutritious food for all requires healthy, nutrient-rich soils, ample fresh water, biodiverse crops, and a stable climate. Ensuring clean, safe water to drink depends upon the local-to-global hydrological cycle generating plentiful rainfall and continually recharging Earth’s rivers and aquifers. Having clean air to breathe means halting emissions of toxic particulates that create lung-choking smog. We like to feel the warmth of the sun on our backs, but only if we are protected from its ultraviolet radiation by the ozone layer, and only if greenhouse gases in the atmosphere are not turning the sun’s warmth into catastrophic global warming.

  If moving into the safe and just space that lies between the Doughnut’s inner and outer boundaries is our twenty-first-century challenge, the obvious question is this: how are we doing? Thanks to data advances in both human rights and Earth science, we have a clearer picture than ever before. Despite unprecedented progress in human well-being over the past 70 years, we are far beyond the Doughnut’s boundaries on both sides.

  Transgressing both sides of the Doughnut’s boundaries. The dark wedges below the social foundation show the proportion of people worldwide falling short on life’s basics. The dark wedges radiating beyond the ecological ceiling show the overshoot of planetary boundaries (for complete data see the Appendix).

  Many millions of people still live below each of the social foundation’s dimensions. Worldwide, one person in nine does not have enough to eat. One in four lives on less than $3 a day, and one in eight young people cannot find work. One person in three still has no access to a toilet and one in eleven has no source of safe drinking water. One child in six aged 12–15 is not in school, the vast majority of them girls. Almost 40% of people live in countries in which income is distributed highly unequally. And more than half of the world’s population live in countries in which people severely lack political voice. It is extraordinary that such deprivations in life’s essentials continue to limit the potential of so many people’s lives in the twenty-first century.

  Humanity has, at the same time, been putting Earth’s life-giving systems under unprecedented stress. In fact we have transgressed at least four planetary boundaries: those of climate change, land conversion, nitrogen and phosphorus loading, and biodiversity loss. The concentration of carbon dioxide in the atmosphere now far exceeds the boundary of 350 parts per million (ppm): it is over 400ppm and still rising, pushing us towards a hotter, drier, and more hostile climate, along with a rise in sea level that threatens the future of islands and coastal cities worldwide. Synthetic fertilisers containing nitrogen and phosphorus are being added to Earth’s soils at more than twice their safe levels. Their
toxic run-off has already led to the collapse of aquatic life in many lakes, rivers and oceans, including a dead zone the size of Connecticut in the Gulf of Mexico. Only 62% of land that could be forested still stands as forest and even that land area continues to shrink, significantly reducing Earth’s capacity to act as a carbon sink. The scale of biodiversity loss is severe: species extinction is occurring at least ten times faster than the boundary deems safe. No wonder that, since 1970, the number of mammals, birds, reptiles, amphibians and fish worldwide has fallen by half.31 Although the global scale of chemical pollution has not yet been quantified, it is of great concern to many scientists. And human pressure on other critical Earth-system processes – such as freshwater withdrawals and ocean acidification – continues to rise towards planetary-scale danger zones, creating local and regional ecological crises in the process.

  This stark picture of humanity and our planetary home at the start of the twenty-first century is a powerful indictment of the path of global economic development that has been pursued to date. Billions of people still fall far short of their most basic needs, but we have already crossed into global ecological danger zones that profoundly risk undermining Earth’s benevolent stability. In this context, what could progress possibly look like?

 

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