1.1.4 Regenerative economies

Helpful prior learning and learning objectives

Helpful prior learning:

Learning objectives:

Imagine a lush forest, filled with tall trees, chirping birds and other animals. Now, imagine that forest on fire. You might think a fire destroys the forest and all its life. But forests recover over time through a process called succession.

Immediately after a fire, the forest floor is blackened, but soon after some hardy plant species like mosses and lichens find a home. They release chemicals that break down rocks and as they die and decay, soil is formed creating conditions for more complex plants to take root and provide habitats to animals. Over time, the soil becomes ever richer, and larger plants and trees grow. Over years, the resilient forest regenerates its previous structure and diversity (Figure 1).

(Images credit: Hannu CC0)

What are regenerative economies?

The economy is all the human systems that transfer and transform energy and matter to meet human needs and wants. 

Regenerative economies work like resilient forests. They support human health and relationships and ecosystems so that human beings thrive in balance with one another and nature. They do this by being circular, distributive, caring, needs-based and sufficient. The text below provides an overview of these ideas, which are covered in greater detail in Subtopic 1.4.

Circular economy

In contrast to the current linear economy, a regenerative economy is a circular economy (Section 1.4.2). 

Before outlining the principles of a circular economy, it is useful to understand how our economies need to relate to nature to be sustainable. Hermann Daly, a pioneer in ecological economics, suggested three key rules or goals for how economies should use resources:

Circular economies work to achieve these goals by designing products and services from the start so that waste can be processed back into the ecosystem or recycled into new products. They also circulate materials and products again and again, reducing waste. Finally, circular economies actively work to regenerate Earth’s ecosystems in a mutualistic relationship. 

The short video below from the Ellen MacArthur Foundation  explains the circular economy and its regenerative role.

Distributive and caring economy

Regenerative economies strengthen relationships and social cohesion by enabling people to use time, energy and money to support their families, make and keep friends, and develop community ties.

Regenerative economies strengthen social relationships by being distributive, ensuring that economic benefits are shared widely among stakeholders (Section 1.4.3). Distributive strategies involve an active state/government that promotes economic equality by:

Distributive economies share power more equally, including diverse stakeholders in economic decision-making to ensure that we meet the needs of all. Such economies are better able to address shared problems.

Doctor caring for a baby

Figure 2. Universal health care is one of the most important distributive strategies for human wellbeing

(Credit: World Bank Photo Collection CC BY-NC-ND 2.0)

Regenerative economies also strengthen social relationships by supporting care (Section 1.3.7 and Section 1.4.4). They recognise the value of human care and care for nature by:

Needs-based and sufficient economy

Regenerative economies do not aim to grow forever. They recognise that the Earth has limits and that our goal should be to meet the needs of all within the limits of the planet. This requires that we aim for sufficiency rather than endless economic growth. This balance between human needs and planetary limits is captured well by the Doughnut Economics model (Figure 3), which is explored in greater detail in Section 1.3.4.

The inner ring of the model represents the social foundation for meeting human needs: sufficient food and water, access to energy, education and networks, housing incomes, political voice, and other needs discussed in greater detail in Section 1.3.3. The outer ring of the model represents the ecological ceiling, representing Earth’s nine life-supporting systems and their ecological limits discussed in greater detail in Section 1.2.7.

Doughnut Economics model

Figure 3. The Doughnut Economics model showing the “safe and just space for humanity”

(Credit: Kate Raworth and Christian Guthier CC-BY-SA 4.0)

Regenerative economies leave no one in the hole of the Doughnut without their needs being met, nor exceed the ability of Earth’s systems to support us. This sweet spot is the green Doughnut, the “safe and just space for humanity” where humans can thrive in balance with nature, as economist Kate Raworth describes in the short video below.

The goal of sufficiency does not mean that we give up things that bring us joy. On the contrary, limits tend to support human health and happiness:

It turns out that limits and sufficiency can be good for us. Limits help us build relationships with others to share our lives and wealth with purpose. Limits help us eat better and be more active. Limits help us to thrive in balance with nature.

Activity 1.1.4

Concept: Systems

Skills: Thinking skills (creative thinking)

Time: 30 minutes

Type: Individual or pair, preferably group to foster discussion.

Some years ago, a young graphic designer was upset to see the stories on the cover of Girls’ Life magazine. The stories emphasised girls’ looks and fashion and were very different from the stories in the equivalent of Boys’ Life magazine. The graphic designer decided to redesign the cover to emphasise positive, ambitious stories for girls.

We can do the same for other media and the kinds of stories that describe our economies.

Get a hold of a newspaper, or access an online news source. It doesn’t have to be an economics or business section. It can also be the front page of the publication.

Look at the headlines and scan the articles. Identify stories that seem to show degenerative economic activities and also those that show regenerative economic activities. Put the headlines into two sections labelled “degenerative economic activities” and “regenerative economic activities”.

Depending on how much time you have (in order from less time to more time):

Share your rewrites with a partner or a group.

Ideas for longer activities, deeper engagement, and projects are listed in Subtopic 1.5 Taking action

Checking for understanding

Further exploration


Ellen MacArthur Foundation. How to Build a Circular Economy. ellenmacarthurfoundation.org/

Raworth, K. (2017). Doughnut economics: seven ways to think like a 21st century economist. London: Penguin Random House

Wellbeing Economy Alliance. (2019). “What is a wellbeing economy?” https://wellbeingeconomy.org/wp-content/uploads/2019/12/A-WE-Is-WEAll-Ideas-Little-Summaries-of-Big-Issues-4-Dec-2019.pdf

Terminology (in order of appearance)

Link to Quizlet interactive flashcards and terminology games for Section 1.1.4 Regenerative economies

succession: the process where communities of plants and animals develop over time, becoming more complex and diverse until a stable state is reached

resilient: able to recover after a disturbance

regenerate: the process of restoring and revitalising something

economy: all the human-made systems that transfer and transform energy and matter to meet human needs

transfer: to move something from one place to another

transform: a change in the state, energy or chemical nature of something

energy: the ability to do work or cause change

matter: anything that takes up space and has mass

regenerative economy: an economic systems that meets human needs in a way that strengthens social and ecological systems

ecosystem: the interaction of groups of organisms with each other and their physical environment

circular: having the form of a circle; in this course, closing the loop on linear economic systems

distributive: when something is widely or evenly divided or shared among individuals

sufficient: when there is enough of something

linear economy: an economic system where resources are extracted to make products that eventually end up as waste

circular economy: an economic system where nature is regenerated and materials are kept in circulation through maintenance, reuse, recycling, composting, and other processes

sustainable: meeting human needs within planetary limits

ecological economics: a strand of economics that studies the relationship between human economies and ecosystems

renewable resource: natural resources that can be regenerated in a human timescale

nonrenewable resource: natural resources that cannot be regenerated in a human timescale

mutualism: a relationship between two species in which both species benefit

social cohesion: the extent to which people in society feel connected to one another and share common values

stakeholder: a person who has an interest in or is impacted by some activity

economic equality: equal distribution of income and opportunity between different groups in society

income: the ongoing money earned (flow) from work or investments

wealth: the total value (stock) of someone’s assets such as money, house, or investments

minimum wage: the lowest wage permitted by law or other agreement

progressive tax: a tax in which the tax rate increases as the taxable amount increases

distributive economy: an economy that shares economic benefits and power more evenly among individuals

power: the ability to influence events or the behaviour of other people

care: the act of providing what is necessary for the health, welfare, upkeep, and protection of someone or something

infrastructure: large scale physical systems that a society needs to function (roads, railways, electricity networks, etc)

sufficient: an amount of something that is enough

economic growth: an increase in the total value of goods and services produced in a period of time

Doughnut Economics model: a visual framework shaped like a doughnut that emphasises the need to achieve the social foundation (human needs) within planetary boundaries

social foundation: the conditions that humans need to survive and thrive

ecological ceiling: the limits of Earth's systems to support life

consumption: using resources and products to meet needs

food chain: a series of organisms, each one dependent on the one before it as food; shows the transfer and transformation of energy and matter through living organisms in an ecosystem

degrowth: a planned, coherent policy of reducing production and consumption to reduce ecological impact, reduce inequality, and improve well-being