The economic model “donut”

In recent decades, countries have been searching for and testing new economic models that mean better development for their citizens. Considering the environment of the pandemic that has strongly impacted the regions, Amsterdam made the decisions to move its economic model considering a “donut” scheme developed in Oxford. And with this not only rescue the economy of the city, but also align the strategy in balance with the planet.

Probably the most important points of this new scheme are to remove the global attachment to economic growth and the laws of supply and demand, using the “donut” model as a guide to the meaning of countries, cities and people working together to prosper in balance with the planet.

Thinking about the “donut” model, the inner ring establishes the minimum we need to lead a good life, considering the UN’s sustainable development goals. That is, from food and water to a certain level of housing, sanitation, energy, education, health, equality, income, and political participation. Thus, any citizen who does not meet the minimum standards will be living in the donut hole. The outer ring of the “donut” represents the ecological roof made by scientists of the Earth system. In other words, the limits through which humanity should not go to avoid damaging the climate, soils, oceans, the ozone layer, fresh water and abundant biodiversity.

In the model there is a basic premise; the objective of economic activity must be to satisfy the basic needs of all, but within the means of the planet. The “donut” is an instrument to show what this means in practice. One of the first steps for cities is to have a “portrait of the city” that shows where basic needs are not being met and planetary boundaries are exceeded. There you can see how the problems intertwine. For example, in terms of the construction sector, cities must regulate to ensure that builders use materials that are most frequently recyclable and bio-based, such as wood, but considering the responsibility of the exploitation limit. Obviously the “donut” approach does not give us solutions but a way of looking at the situation so that we do not continue with the same structures that we used to use.

Today we are facing and experiencing a series of surprising events and impacts that make us question and allow us to move away from the idea of only economic growth to “prosper”. We need a change of mentality to understand that “prosper” and better life for all, means that our well-being is in balance. We know it and understand it in a practical way if we think about our body. Imagine the “donut” scheme for a system called the human body. We know the limits, from the social, intellectual, emotional and physical point of view. And we know when someone is in the “donut” hole, as we also know when the outer limits have been exceeded. Thus, this is the moment when we connect bodily health with the health of the planet.

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