Is A Doughnut Our Lifeline To Save the World?
Why implementing a new 21st-century economic goal and Unreasonable ventures are the keys to saving humanity.
What is so Sweet About Doughnut Economics?
In Doughnut Economics, Kate Raworth argues that GDP growth shouldn’t be the goal of our current economy. Alternatively, we should embrace a new 21st-century economic goal if we really want to address the greatest challenges of our time.
She advocates for an economic mindset focused on creating economies that are regenerative and distributive by design. She argues that with a new economic model, we can achieve “a world in which every person can lead their life with dignity, opportunity, and community — and we can all do so within the means of our life-giving planet.”
Doughnut Economics reframes our current economic model to build a world where human prosperity and the planet thrive.
How Can We Possibly Achieve This Potential World?
We must create an economy that is limited to an upper boundary that protects the environment and a lower boundary that guards against human deprivation. Kate famously depicts these boundaries through the image of two concentric circles that resembles a doughnut.
While humanity’s context, values, and aims continually evolve, Kate argues that economics should evolve too. She doesn’t ask to dismantle capitalism, but instead to re-focus the goal of our current economic system to best serve the needs of the future. Kate summarizes her book by stating “Today’s economy is divisive and degenerative by default. Tomorrow’s economy must be distributive and regenerative by design.”
A New Focus
Instead of focusing on an ever-expanding GDP, we must focus on creating local and global economies that enable humanity to thrive within the Doughnut’s safe and just space — one that promotes a balance of human prosperity in a flourishing web of life.
Today’s economy is divisive and degenerative by default. Tomorrow’s economy must be distributive and regenerative by design.
Measuring What Doesn’t Work
The beauty of Doughnut Economics is being able to measure where our economy is contributing to an imbalance within the social foundation of humanity and the ecological ceiling of the planet. By acknowledging where we fall short, human ingenuity is incentivized to help us get back within the boundaries of the system.
As a result, a core tenant in attaining this seemingly elusive 21st-century economic goal is scaling ideas and businesses that directly tackle inequality and sustainability. These impact-driven businesses are enablers of the Doughnut Economic Model. They mitigate against the harmful realities that our current economic model ignores and dubs “externalities”.
We Need Businesses That Are Daring Enough
We need more than major businesses pledging to be “carbon neutral” (I’m looking at you Amazon and Unilever). While that’s a great first step, we need more to offset the global damage caused by our current economic model and tip the scale towards the safe and just space for humanity within the doughnut.
We need businesses that seemingly don’t belong in today’s economy — companies whose entire business model depends on sequestering more carbon than it produces or lifting people out of poverty.
Luckily, Unreasonable supports these daring companies and reduces their friction to scale by building a community between entrepreneurs, institutions, and investors to profitably solve pressing global problems. Unreasonable’s portfolio consists of companies that are tackling those very problems that are jeopardizing both the social foundation and ecological ceiling of the doughnut.
Tackling Inequality
Take, for example, Kuza. It’s an award-winning social enterprise tackling inequality by working with informal workers helping them to learn, connect and grow at scale. Kuza’s mobile micro-learning platform offers youth, women, and micro-entrepreneurs from informal communities up-skilling opportunities on their own terms. It has impacted over 4.8 million youth and created 150,000 new jobs across Africa and South Asia within seven years.
Thanks to companies like Kuza, and human ingenuity, more and more individuals will climb out of poverty and into the middle class. As a result of this new lifestyle, however, more resources will be consumed which exacerbates environmental degradation on an already stressed ecological system.
The linchpin towards achieving Kate’s harmonic Doughnut Economic model will be on “generous” companies that give more to the environment than what they take.
Getting Back Under the Ecological Ceiling
Carbon negative companies will be crucial to ensure we as a species do not overstep our planet’s ecological boundaries. For example, ventures like LanzaTech aims to displace 30% of crude oil use while also reducing global CO₂ emission by 10% through recycling industrial off-gases, like syngas and reformed biogas. LanzaTech also re-uses CO₂ as feedstock for microbes that can produce fuel and chemicals to make alternative products such, as liquid detergents and cleaning supplies.
A Doughnut Economics Unicorn
There are even a few incredible companies that are working to alleviate problems on both sides of the Doughnut. Taking inspiration from NASA, Air Protein converts CO₂ into nutrients to create the world’s first air-based meat. Not only does Air Protein lower carbon emissions, but it also produces food which increases food security amidst a rising global population. With its two-fold impact, Air Protein might be the equivalent of the Doughnut Economics’ unicorn.
These technologies help shift the current linear economy into a circular economy — one that is inherently regenerative. While there are many stellar companies such as Deep Branch, Aceleron, Econic Technologies, that give value to “waste”, there are still immense amounts of innovation needed to make all aspects of our economy circular.
Other Holes in the Doughnut
There is a huge problem of nitrogen and phosphorus runoff that occurs in the agricultural sector. As these minerals get into the water ecosystem, they artificially increase the growth of algae, which decreases oxygen for aquatic life to thrive. How can we re-use the excess nitrogen and phosphorus to provide value in our current economic system? Nutrient recycling is a promising strategy, however, the technologies are nascent with clear limitations.
It’s A Maze, and Business Can’t Solve It Alone
Everything in Earth’s natural systems is interconnected and our economy should behave the same way — except it doesn’t. The Fortune 500 companies that are pledging towards a more sustainable era of growth aren’t collaborating enough. Their individualized circular economy strategies to claim and reuse their own parts and materials leave a fragmented market that’s unlikely to succeed. Climate tech companies and institutional investors riding the Cleantech 2.0 wave are also fragmented in their approach to no fault of their own.
To put it simply, businesses can’t do it all.
They look like a mouse in a maze as they innovate and address challenging global issues because there is no clear model to follow. Businesses need a unifying vision. Kate summarizes this point beautifully by stating “Regenerative industrial design can only be fully realised if it is underpinned by regenerative economic design.”
Generous business alone will not be able to solve all of our problems at the scale that is needed. The government needs to draw the boundaries on our current economic system and incentivize behaviors that keep us within those limits. The problem is the future can’t wait. London School of Economics economist Mariana Mazzucato argues, “We cannot rely on the private sector to bring about the kind of radical reshaping of the economy that is required, only the state can provide the kind of patient finance required to make a decisive shift.”
Regenerative businesses can only be fully realised if it is underpinned by regenerative economic design
It’s Time to Evolve
Instead of navigating the maze all alone, we need to build an economic system where the journey towards human prosperity in this fragile planet is a march full of diverse supporters with one clear goal. We need to embrace the Doughnut Economic model and replace our metaphorical cheese from GDP growth to human prosperity. Only then will the walls of injustice and environmental degradation begin to crumble.
As more citizens feel the adverse effects of our current economic system firsthand, they will demand change to wean off of our current dilapidated economic model. Cities such as Philadelphia, Portland, and Amsterdam are already piloting the Doughnut Economics model. Amsterdam’s deputy mayor Marieke van Doorninck has been using the model to mend post-coronavirus economic recovery, and recently published a report on becoming a “doughnut city”.
It’s time to evolve our current economic system and repurpose capitalism for good.
Change is possible. An inclusive economic model is here and generous businesses are sprouting around the world. With intention, the sustainable and just world we all seek is becoming more clear amidst the fog of despair.
Take Action:
- Invest in the companies that are tackling the biggest issues compromising the doughnut by joining the Unreasonable Collective.
- Engage in the Doughnut Economics Action Lab (DEAL) community to bring Doughnut Economics to action.
- Follow Unreasonable Group for more on how they are repurposing capitalism and supporting the ventures that are bending humanity’s future in the right direction.
