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Amsterdam Doughnut Economics

After the crisis the change that brings the circle to a close.

by Davide Perillo
14 September 2020
9 min read
byDavide Perillo
14 September 2020
9 min read

The whole world is facing the Covid emergency and there is no way of knowing how the epidemic will evolve. Not even the traditionally highly organised Netherlands knows where this is going. There –in addition to thousands of deaths– the virus continues to weigh heavy on the economy, keep tourists away and inflame the electoral campaign already under way for the spring 2021 elections. One thing is certain, though. Amsterdam has already decided how and where it will start to get things moving again, as soon as the conditions allow. The key lies entirely in that chalk-white drawing on the cover of a book that came out three years ago: two concentric circles, the symbol of Doughnut Economics.

For a complex reality a simplified scheme

A light-hearted way of referring to what is a very serious economic model, which the British press has described as "a revolutionary alternative to the growth paradigm". The Guardian has even included its creator on a list of the ten most innovative figures in her sector.

Kate Raworth, a researcher at the Environmental Change Institute in Oxford, summarises the complexity of a momentous challenge in the shape of a doughnut. The question has been asked as to what a person, and indeed a community, really needs in order to live well and what could be done to ensure that everyone has an increasing share of the resources that our planet provides for us, without the waste of the last few decades.

The answer lies in that basic sketch. The centre hole represents the people who do not reach the minimum standards of income, education, healthcare, housing, food, and access to clean water and air. Basically, then, anyone who is a long way off the now famous 17 Sustainable Development Goals outlined by the UN. The solid part of the doughnut is the proportion of people who have access to these resources and who use them without generating waste or excessive damage to the environment; in other words, people who live well. The outer crust marks the limit, established based on a large amount of studies and research, beyond which we end up consuming in excess of what we actually have available. In practice, it is important not to cross this boundary if we are to avoid damaging the climate, the oceans, biodiversity and therefore the Earth as a whole.

It may be a basic representation, but it is also an effective one, with the added bonus that it can be applied to scale anywhere. After all, as Raworth argues, the data that is now available should mean that we can work out who and where is still "in the hole". How many poor citizens does a city have, or how many living in more polluted neighbourhoods, or areas where schools, houses or green areas are sub-standard? And what does it take to get those people into the solid part of the doughnut, without coming out the other side and ending up causing waste. It is important to look closely at where we are starting from – and realise that the problems are interconnected. As Raworth points out: "We must deal with jobs and health, the economy and the environment at the same time and in the same way".

Amsterdam’s doughnut

Amsterdam is the first city in the world to officially adopt Doughnut economics. Last year, long before the pandemic took hold, the city invited the English economist to become a lecturer at the local Applied Sciences University and to set up a network that, together with the local authorities, would include various associations, bodies and companies. There are currently some thirty or so players involved in the Amsterdam Donut Coalition (‘donut’ being the simplified and most widely used slang term for ‘doughnut’). Together, they set about collecting data, analysing scenarios and drawing up proposals.

This had two main outcomes: a new and detailed portrait of the city and a Roadmap 2020-2025 approved by the City Council, which announced the revolution at the end of June. "We think this is the best way not only to help us emerge from the crisis, but above all to rethink the future," explains Deputy Mayor of Amsterdam Marieke Van Doorninck. "For those in government it is a duty." But she added an important note: "The doughnut doesn't provide answers, but it does help us to find them." This being the case, it does not offer a series of recipes to be followed but rather a perspective that broadens the angle from which problems are tackled.

The data collected, for example, show that almost 20% of those living in cities struggle to combine basic needs with excessively high rental costs. Building more would solve part of the problem, of course, but it would also cause further damage to another delicate system –the environment. A good proportion of the CO2 emissions there derive from imports of building materials. The logical choice, to be incentivised on an ad hoc basis, would therefore be indeed to build, but using wood and recycled materials as much as possible. It is an approach that is very much in keeping not only with the objective of halving raw material consumption by 2030, but also with the intention of eliminating, by the same date, the 41kg of food wasted each year by the average citizen. A number of programmes aimed at restaurants and hotels have already been introduced with this in mind. Their aims include reducing waste to a minimum and encouraging the recycling of furniture, clothes and electronics by increasing the number of ‘libraries of things’, second-hand markets and centres teaching the skills required to repair items.

Circular economy for the benefit of all

The aim is to achieve a zero-impact city by 2050, based on a circular economy and at the same time capable of combining "economic development and individual protection," as Van Doorninck herself explained in Wired. And that is where the secret lies: asking oneself, for every potential action, how the overall design would change and what impact it would have not only on the particular problem at hand but overall. "In terms of our strategy, every action has its place in the doughnut and contributes to the overall model," the deputy mayor explains.

We think the doughnut economy is the best way not only to help us to emerge from the crisis, but above all to rethink the future

by Marieke Van Doorninck, Deputy Mayor of Amsterdam

The doughnut economic model is based on a question that, according to Kate Raworth, we can no longer take for granted: what does it really mean to grow? Are we sure that an increase in GDP is the only compass that should guide our choices, or does development mean something else? "Be agnostic about growth," reads one of the "Seven Ways to Think Like a 21st-Century Economist" –the subtitle of Doughnut Economics. The goal is apparently no longer to grow but rather to thrive, meaning "to develop, achieve prosperity" –a broader and more balanced concept. "Nothing in nature grows indefinitely," Raworth says. "Whatever is born, grows and is destined to mature. Only our economic model is based on the idea that global GDP should continue to rise forever, whilst resources remain limited."

A new wellbeing

It would not be the "happy degrowth" or even the return to the past that other economists talk about but rather something else, namely "the search for a system that offers a good life for all within planetary boundaries." And in order to achieve this, Raworth and her team begin by suggesting that the focus switch from GDP to the doughnut and then to "nurturing human nature," since there is much more to human wellbeing than simply responding to the need for consumption. Furthermore, human beings must play a key role in designing a "wiser system" that is flexible and not based solely on economic theories that have been developed almost arbitrarily. This also gives rise to a number of other points, including the need to "design to redistribute", since it would be incorrect to say that the market in itself will create equality in the long run; "create to regenerate", abandoning the idea of disposable consumption forever; and last but not least to "tell a new story," because the narrative of continuous growth and of the market guiding our choices, having played a dominant role throughout the 20th century, apparently presents too many issues that are now coming to a head.

According to Raworth, post-Covid Amsterdam is only the first step: "We would never have imagined that we would be launching the project in the midst of such a great crisis, but perhaps the need for change has presented us with an even greater opportunity." Other cities are thinking about it, too. Indeed, there is also talk of doughnut economics in Philadelphia and Portland, where work on mapping the situation is already well under way, but the Doughnut Economics Action Labs gathers ideas and insights from all over the world with a view to "rethinking the future".