Doughnut Economics: Can it work?
The world needs a transformation in the way human needs are met, considering the social and economic goals of future generations. One of the latest concepts reframing this idea is Doughnut Economics, which seeks to achieve balance through a strong social foundation and an unbroken ecological ceiling. This framework aims to serve as a foundation for creating policies and regulations that identify key areas and opportunities to put Doughnut Economics into action.
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Table of Contents
What is Doughnut Economics?
Doughnut Economics is a transformative framework introduced by Kate Raworth, an economist at the University of Oxford. It reimagines traditional economic models by focusing on maintaining a balance between people and the planet. It examines how to meet human needs without exceeding environmental limits.
In this theory, the two rings of the doughnut represent the social foundation and ecological ceiling, respectively. These ensure a safe and just space for humanity and the planet to thrive.
How can it benefit businesses?
Doughnut Economics provides a framework for businesses to adapt their core values, missions, operations, and impacts by embedding sustainability into their practices. As sustainability becomes a growing priority for major economies, companies can use this framework to gain numerous advantages:
- Better alignment with sustainability goals: By setting ecological limits, companies can ensure long-term viability.
- Enhanced reputation: Investors and stakeholders prefer businesses that integrate ecological considerations into their goals, fostering loyalty and trust among customers and partners.
- Encouragement of innovation: The model inspires businesses to redesign products and operations, unlocking new market opportunities.
- Risk reduction: By aligning with evolving environmental regulations and laws, businesses can mitigate potential risks.
To understand the benefits different businesses have achieved, explore the Doughnut Economics Action Lab (DEAL) case studies, which showcase how companies have integrated this approach to foster growth and innovation.
What Do the Two Rings in Doughnut Economics Symbolise?
The doughnut model comprises two distinct rings that frame a safe and just space for humanity:
- Inner Ring (Social Foundation): This ring sets the minimum standards for human well-being, ensuring that every individual has access to essentials such as nutritious food, clean water, healthcare, education, and a decent standard of living.
- Outer Ring (Ecological Ceiling): This ring represents the environmental limits that must not be exceeded to prevent catastrophic ecological degradation. It covers key planetary boundaries such as climate change, biodiversity loss, land-system change, and freshwater use.
The area between these two rings is the desired zone where human development meets ecological sustainability—a balance where both society and nature can prosper.
How is Doughnut Economics different from the circular economy?
While Doughnut Economics and the circular economy share similar goals, they differ in scope and perspective.
- Circular Economy: Focuses on eliminating waste and pollution by redesigning processes so materials and resources can be reused, recycled, or repurposed. It primarily addresses product design and consumer behaviour.
- Doughnut Economics: Extends beyond environmental sustainability to include social equity. It considers the broader dynamics of social, economic, and environmental factors.
The circular economy can be seen as a component of Doughnut Economics, with the latter offering a more comprehensive solution that integrates economic, social, and ecological sustainability
What are the goals of Doughnut Economics?
Policies based on Doughnut Economics aim to achieve:
- Universal access to basic human needs, such as food, shelter, education, and healthcare.
- Resource utilisation that maintains balance and avoids depletion.
- Policies that promote environmental protection and equitable resource distribution.
- Sustainable innovation fosters harmony between economic, social, and environmental development.
- Support for local communities, prioritising decisions that build sustainable economies.
Can this support sustainable business growth?
Doughnut Economics provides businesses with a powerful framework for sustainable growth. By aligning their operations with its principles, companies can establish benchmarks for resource utilisation and maximise efficiency.
This alignment not only delivers internal benefits but also positions businesses to meet growing sustainability demands, strengthening relationships with stakeholders.
Doughnut Economics offers a visionary path to success, harmonising human prosperity with ecological sustainability. It shifts the focus from relentless growth to a balanced approach, where true success is measured by the well-being of people and the planet — fostering a future that is sustainable and equitable.
FAQs
What is Doughnut Economics?
Doughnut Economics is a framework that redefines economic success by balancing a social foundation with an ecological ceiling, ensuring that human needs are met without exceeding planetary limits.
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Who introduced Doughnut Economics?
Doughnut Economics was introduced by Kate Raworth, an economist from the University of Oxford, to offer a new model for sustainable economic growth.
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How does Doughnut Economics differ from the circular economy?
While the circular economy focuses on waste reduction and resource efficiency, Doughnut Economics incorporates social equity alongside environmental sustainability, providing a more comprehensive approach.
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What do the two rings in the Doughnut model represent?
The inner ring represents the social foundation (basic human needs), and the outer ring defines the ecological ceiling (environmental limits). The space between these rings is where sustainable development occurs.
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Can Doughnut Economics support sustainable business growth?
Yes, by aligning business strategies with both social and environmental goals, Doughnut Economics helps companies achieve long-term sustainable growth, reduce risks, and foster innovation.
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How can businesses implement Doughnut Economics in practice?
Businesses can implement Doughnut Economics by assessing their social and environmental impacts, setting sustainability targets, and redesigning processes to meet these goals while engaging stakeholders in their sustainability journey.
