Reimagining Our Global Economy: What Should You Know About Doughnut Economics?

economics environmental impacts must-know policy social impacts Aug 29, 2023

Our team has spent ample time discussing what it will take to change the private sector to adopt triple bottom line thinking, or the balance between people, planet, and profit, but no matter how we look at it, we keep bumping up against a proverbial ceiling. 

Companies make commitments to adopt social and environmental responsibility within the corporate culture, but progress has been and continues to be too slow. Profit continues to be the most important factor in almost every business, and rightfully so. With more money comes more growth opportunities, more jobs, raises and promotions, freedom to adopt sustainability technology and innovations, and much more. But what if we could still do all of these things, without needing to be dependent on outdated and never-ending growth models?

Doughnut Economics suggests that this is possible.

The graphic below perfectly illustrates how the Doughnut is beneficial to both people and planet: The innermost circle represents the basic needs every person needs - food, water, money, social equity, etc… The outermost circle represents nature’s boundaries or the ecological ceiling. If we go beyond that (which we currently are), we’ll experience devastation like climate change, biodiversity loss, pollution in its various forms, and much more.

Image Credit: Doughnut Economics 

If you’ve never heard of Doughnut Economics, the idea is simple - have healthy, profitable businesses and countries that respect nature and provide an equitable society for every person to benefit from without the expectations of infinite growth. Maybe it’s easier said than done, but take a minute to sit with yourself and imagine what your community would look like if they adopted Doughnut Economics. Imagine what the world would look like if every community adopted Doughnut Economics…

There have been a few communities that have started working towards achieving the Doughnut Economics model, including Portland, Oregon, Santiago de Cali, Colombia, and many more communities throughout the Global North and South. Achieving the Doughnut, however, will take many more years of support and implementation by community stakeholders and leaders - it will not happen on its own.

You might be wondering “why would we need to adopt the Doughnut? My life is fine and our current economic system works great.” Fair enough - we all have different ideas of what and how the economy should work. If you’re an American like I am, let’s take a stroll down our economic history. Your life may be great if you’re a top earner where you can afford to buy your kids a house, invest endlessly and see continuous growth of your portfolio, travel around the world, and buy whatever you want. Your life may be fine if you’re in the middle class - maybe you can’t buy your kids a house, but you can help them pay for college, or maybe you can’t travel around the world whenever you want, but you make enough money to save up for a trip to Europe. That’s all fine and dandy, but the reality is that there are just a few people in this country that can live like that and far too many living at or below the poverty line.

Maybe you’re thinking “that’s not my problem,” but the reality is that it is your problem. If you don’t believe me, hear a supporting argument from Baratunde Thurston, Doughnut Economics supporter and media expert. The more people we allow to live in poverty, the more problems our world will have. We’ve created an economy that allows for externalities that we refuse to internalize.

Besides the costs associated with social externalities, our current economic system disregards environmental health and well-being. A system dependent on GDP growth means we have to keep making things, which isn’t inherently a bad thing, but how we make our things is broken.

Our current systems of production rely on a linear economy, or what we often refer to as “take, make, use, waste.” We take a raw material like cotton, process it to make a t-shirt, and throw it away when we’re done. Some people may donate or resell their clothes when they’re done with them, but in our current system, there’s no way to ensure those clothes are staying out of the landfill or incinerator. 

Ideally, we want to adopt a circular economy where we make goods using safe inputs and retain the value of those goods. Meaning, when we’re done with a product, we should be able to either recycle it into something new and continue to be able to recycle it or the material should be returned safely to the Earth to enter the nutrient stream. 

How does all of this relate to Doughnut Economics? The Doughnut suggests we need to better manage our natural resources and the circular economy could be the perfect partner to accomplish that. Imagine if our global economy invested in nature the way we invest in the market - phasing out fossil fuel production, escalating renewable energy tech, reducing deforestation, rehabilitating depleted ecosystems, and countless other acts to support environmental stability around the world. 

Doughnut Economics is radical. Shifting our economic structure is something we haven’t seen in modern times, but one could argue we’re well overdue for a change to the system. Just because we’re used to things being a certain way doesn’t mean we have to keep it that way - if the system isn’t working (and it isn’t) we can use creative problem-solving to create the world we want to see. 

What that world will and should look like is a debate in and of itself, so we’ll table that conversation, but for now, you can do your part by learning more about the systems in place and some of the alternatives that can make this world a more equitable and just place for all.

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