Heading for a doughnut economy: A brief encounter

Next months, my posts deal with the prospects of bringing humane cities closer. These posts represent the most important findings of my e-book Humane cities. Always humane. Smart if helpful, updates and supplements included. The English version of this book can be downloaded for free here and the Dutch version here.  

The model for a doughnut economy has been developed by the British economist Kate Raworth in a report for Oxfamentitled A Safe and Just Space for Humanity and the idea quickly spread throughout the world. The essence is that social and environmental sustainability must be guiding principles for economic policy in the 21th century and together direct economic behavior. There is no triple bottom-line: Social and environmental sustainability are in the lead, economy follows.

The idea behind ​​the doughnut-model is simple. if you only look at the shape of a doughnut, you see two circles. A small circle in the middle and a large circle on the outside. The smallest circle represents the minimal social objectives (basic-needs) that apply to each country. The large circle represents the self-sustaining capacity of the planet. All societies must develop policies that stay between the two lines. Where economic behavior nowadays has far reaching consequences that go beyond both lines, future economic policy must aim to make societies thrive between the lines.

Prosperity within limits

The actions below mirror policy actions to prevent overshooting the ecological ceiling and to comply with the social basement, albeit adapted to the capabilities of developed countries. The time horizon is 25 years. Below I give a few examples.

Prevention of overshooting the ecological ceiling:

1. Reduction to zero of greenhouse gas emissions by the combined use of solar, wind and thermal energy. Hydrogen, salt, batteries, and warm water reservoirs are used for storage.
2. Local plants are clean; toxic or otherwise dangerous emissions are prevented or temporarily sequestered in order to maintain clean air.
3. Support of local farmers to restructure their operations in order to regenerate soils, increase biodiversity and contribute significantly to the local food supply. The selling of their products is boosted by substantial tax advantages for certificated products.
4. Reduction of car use by reconstructing cities in order to limit displacements.
5. Realizing full-circularity; the import of raw materials is stalled, with the (temporal) exception of indispensable components of batteries.
6. The use of nitrogen is limited until an acceptable level of emissions in the air or in the groundwater is reached.
7. Construction of reservoirs for drinking water and water for agricultural applications to balance water extraction and supply of water.

Complying with the social basement

1. Rebalancing material rewards and job satisfaction, for instance by substantial reduction of income inequality.
2. Compulsory education from 2 – 18, in combination with internships in companies and institutions.
3. Tax benefits for B-certified companies (companies for which societal interest are leading).
4. Local government, companies and institutions work together to offer all adults engaging and challenging jobs with salaries that enable a decent and independent life.
5. Prices of (imported) products that damage health or the environment (or both) are listed and substantially taxed. 
6. The cost of health care and assurance depends on obtaining certificates for a healthy life and preventing lifestyle related illnesses such as being overweight.
7. Citizens can vote directly in matters related to their immediate living environment. 
8. Decent housing for all adults, and adequate housing for students, situated in an attractive and safe living environment.

A global oriented-mindset

A future of responsible prosperity requires a new mindset, including the meaning of the concept of prosperity itself. Zero greenhouse gas emissions do not only require exchanging carbon energy sources by wind, sun and earth, but also new consumption pattern. Meat becomes a delicacy, to be consumed accordingly. Circular production requires a more efficient use of goods, higher prices, superior quality, the repair of broken devises instead of their replacement, and a less fashion-dependent design. With respect to the traditional yardstick of prosperity, a stable GDP, rather than a growing one is probably the highest conceivable goal, if it should be a goal at all. Wages below modal will rise considerably, wages above modal will decrease, the highest 10% in particular.

If we consider the world as a whole, the policy implications are even more dramatic. A considerable part of the world population still lives below the social basement. The population of these countries is growing fast and concentrates in cities characterized by heavy pollution, traffic jams, dirty industries, poor housing, sanitation and water supply and increasing insecurity and inequality.

In these countries, growth of GDP, the production of goods and services, and the domestic markets as well are necessary for at least one decade. In combination with policies to control population growth and pollution, to use renewable resources and to improve the infrastructure; public transportation, water supply, housing and sanitation in the first place. 

Where governments in developed countries can focus on a transition from traditional growth towards sustainable prosperity immediately, developing countries must simultaneously manage a decade of ‘traditional’ economic growth and a transition to sustainable prosperity.