1.3.4 Doughnut Economics Model
Helpful prior learning and learning objectives
Helpful prior learning:
Section 1.1.1 The economy and you which explains what an economy is and how it is relevant to students’ lives
Section 1.1.2 The embedded economy, which explains the relationship between the economy and society and Earth’s systems.
Section 1.2.7 Planetary boundaries, which explains the nine ecological systems that regulate conditions on Earth and their limits, six of which we are exceeding
Section 1.3.2 Values in the economy, which explains how values affect human behaviour, judgements, and the economic tools we choose to use in the economy
Section 1.3.3 Human needs, which explains the distinction between needs and need satisfiers
Section S.1 Systems thinking, which explains what a system is and why systems thinking is useful. (coming soon)
Learning objectives:
explain the Doughnut Economics model and describe the current global situation with regard to the Doughnut’s social foundation and ecological ceiling
Humans are captivated by growth. From the early steps of a young child to the sprawling branches of a towering oak tree, growth signals progress and potential. In our personal lives, we celebrate each birthday, and in sports, we cheer as athletes break records, pushing the limits of human performance. We admire cities that expand and technologies that advance because growth often represents improvement and prosperity.
However, this attraction to endless growth overlooks a critical fact: in the natural world, endless growth is neither possible nor desirable. Nature works in cycles of growth, decay, and renewal. But somehow we expect our economies to defy nature, to grow in size forever. In this section, we explore the Doughnut Economics model, which challenges us to rethink the goal of economic growth, striving instead for meeting human needs within Earth's limits.
What is the Doughnut Economics model?
In 2017, economist Kate Raworth developed the Doughnut Economics model to explore how human needs relate to Earth’s ecological limits. Raworth merged the social Sustainable Development Goals (SDGs) with the planetary boundaries model (Section 1.2.7), creating a model that looks like a doughnut (Figure 1).
Figure 1. The Doughnut Economics model showing the “safe and just space for humanity” where human needs are met within planetary boundaries
Social foundation
The inner ring of the Doughnut model (Figure 3), represents the social foundation for meeting human needs: sufficient food; clean water and decent sanitation; access to energy, education, health care and networks of information, mobility and social support; decent housing, sufficient income and decent work. Equity, political voice and peace and justice help ensure that the needs of all are met in our social and political systems. You can see that the Doughnut’s social foundation is based on the social priorities set out in the Sustainable Development Goals (SDGs) shown in Figure 4.
Figure 3. The social foundation of the Doughnut Economics model
Figure 4. The social and economic SDGs
(Credit: United Nations)
Ecological ceiling
Figure 5 shows the model's outer ring, the ecological ceiling representing Earth’s nine life-supporting systems and their ecological limits, drawn from the planetary boundaries model (Section 1.2.7).
In the Doughnut model, some of these boundaries are described in simpler terms. For instance, "biosphere integrity" becomes “biodiversity loss” and "novel entities" become "chemical pollution”. These boundaries represent the maximum safe level of disturbance to Earth’s systems from human activities.
Figure 5. The ecological ceiling of the Doughnut Economics model
Meeting human needs within planetary boundaries
We need to design our economies so that we do not leave anyone in the hole of the Doughnut without their needs being met, nor exceed the capacity 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 Raworth describes in the short video below.
Global data show that humanity is currently far from reaching the Doughnut’s goals. Billions of people cannot yet meet their basic needs, and humanity has collectively already overshot many of Earth’s planetary boundaries. Figure 6 shows this shortfall on the social foundation and overshoot on planetary boundaries in red.
Our global economy is failing to meet the goals of human and ecological wellbeing, but also no individual country has fully achieved these goals, but there are significant differences between countries.
Figure 6. Not meeting the needs of all within the means of the planet
(Credit: Kate Raworth and Christian Guthier CC-BY-SA 4.0)
Note: the planetary boundaries of this diagram have not yet been updated to the latest 2023 data
Figure 7 compares Australia and Yemen. Australia has made good progress in meeting social needs, but greatly exceeds environmental limits. Yemen, in contrast, stays within environmental limits, but falls short in fulfilling its people's essential needs. You can compare over 150 countries’ Doughnuts on the University of Leeds A Good Life For All Within Planetary Boundaries website (see activity at the end of this section).
Figure 7. Neither Australia (left) nor Yemen (right) is in the “safe and just space for humanity”
(Credit: Leeds Good Life)
It’s no surprise to see an overall positive relationship between the average incomes in a country and human needs being met. Higher incomes in Australia enable more people to buy what they need than in Yemen, and higher tax revenues for the Australian government enable it to provide better public services and social support than in Yemen. The ability to use higher national income to purchase more goods and services to meet human needs is one reason why so many governments continue to prioritise economic growth.
However, it is also not surprising to see that high income countries are greatly exceeding planetary boundaries. Economies use energy and matter to meet human needs and wants, so the economies of high-income countries tend to place excessive pressure on nature.
But there is more to the story. Some countries achieve very high levels of human wellbeing, with a much lower ecological impact. They use natural resources much more efficiently to meet human needs. Costa Rica is an example (Figure 8). The middle-income country has a higher life expectancy and life satisfaction than many high-income countries. Costa Rica has focused on public health, with universal health care, water, sanitation and energy infrastructure. There is free education and a guaranteed state pension, and strong social connection. Since 1987 Costa Rica has been protecting and restoring the health of its rainforest. Can you find Costa Rica in Figure 8?
Costa Rica still has room for improvement, but it shows that the high income countries to the right in Figure 8 can achieve high standards of living with much lower ecological impact. They can do this by redesigning their economies to focus on human wellbeing and meeting real human needs, rather than simply expanding economic output aimlessly. Ensuring that everyone has access to essential goods and services, along with distributing incomes and wealth more evenly, can significantly improve a nation's ability to meet the needs of all its inhabitants with far lower ecological impact.
Countries at the lower left side of Figure 8 will need to use more energy and material resources as they seek to meet the needs of all their people. It is important for higher income countries to reduce their excessive use of energy and materials in order to make room for other countries that need to increase their energy and resource use. With better economic design of provisioning systems (Section 1.3.5) every country can achieve the ‘good life’ within planetary boundaries.
Activity 1.3.4
Option 1 - Connecting the social foundation and ecological ceiling
20 minutes (or more if you make a Doughnut spinner)
You can explore possible tensions between the social foundation and the ecological ceiling by choosing one element from the social foundation and one from the ecological ceiling and considering how they might be connected. Some connections might be relatively easy to link, like air pollution and health. Others are more challenging.
If you want to avoid very challenging connections, you may wish to focus on:
social foundation: food, water, energy, housing, health, and income
ecological ceiling: climate change, biodiversity loss, air pollution, land conversion and water withdrawals
Figure 9. Everything is connected
Try this out alone, or in pairs, sharing your ideas with the larger class or your teacher.
You can also create a physical Doughnut Spinner, a small version for individual use, or a large classroom version to continue exploring connections between the social foundation and ecological ceiling. The Doughnut Economics Action Lab has instructions.
Option 2 - Comparing countries on the Doughnut
30 minutes
The website A Good Life For All Within Planetary Boundaries has abundant data on the status of countries’ social foundation and ecological overshoot.
Take about 10-15 minutes to explore the data on the website.
Find something interesting or surprising to share with a partner or discuss the rest of the class.
Find a country that you have a strong personal connection to. How is it doing relative to other countries, and the goal of “getting in the Doughnut”. Where would your country be on the graph in Figure 8?
Ideas for longer activities, deeper engagement, and projects are listed in Subtopic 1.5 Taking action
Checking for understanding
Further exploration
Instructions to make a Doughnut spinner - create and use in class to generate combinations of social and ecological elements to discuss. Difficulty level: easy.
Doughnut Economics Action Lab - the website for a global movement to help cities, businesses, governments and other organisations put the Doughnut Economics model into action to meet human needs within planetary boundaries. Difficulty level: medium.
A Good Life For All Within Planetary Boundaries - website with data on the social foundation and planetary boundaries for more than 150 countries. It also has a country comparison tool. Difficulty level: medium.
Sources
Doughnut Economics Action Lab. (n.d.). https://doughnuteconomics.org/
Stockholm Resilience Centre, Planetary Boundaries. https://www.stockholmresilience.org/research/planetary-boundaries.html.
Fanning, A.L., O’Neill, D.W., Hickel, J. et al. (2022). The social shortfall and ecological overshoot of nations. Nature Sustainability, 5, 26–36. https://doi.org/10.1038/s41893-021-00799-z
Raworth, K. (2017). Doughnut economics: seven ways to think like a 21st century economist. London: Penguin Random House.
University of Leeds. (n.d.) A Good Life for All Within Planetary Boundaries. https://goodlife.leeds.ac.uk/.
United Nations. (n.d.). The 17 Goals. United Nations Department of Economic and Social Affairs. https://sdgs.un.org/goals.
Terminology (in order of appearance)
economy: all the human-made systems that transfer and transform energy and matter to meet human needs and wants
Doughnut Economics model: a model for sustainable development shaped like a doughnut, combining the concept of human needs with planetary boundaries
economic growth: an increase in the total value of goods and services produced in a period of time
Sustainable Development Goals (SDGs): 17 social and environmental goals established by the United Nations in 2015
planetary boundaries model: a model that illustrates these nine Earth systems and their limits
model: simplified representations of our world used to communicate ideas, understand complex processes and make projections or predictions
social foundation: human needs that need to be met for human survival and wellbeing
sanitation: conditions supporting public health, especially clean drinking water and sewage disposal
energy: the ability to do work or cause change
income: the ongoing money earned (flow) from work or investments
equity: the quality of being impartial or fair
justice: fair treatment
system: a set of interdependent parts that organise to create a functional whole
ecological ceiling: the limits of human impact on Earth's ecological systems
tax revenue: money collected by a government from individuals and organisations used for public spending and investment
matter: anything that takes up space and has mass
efficiency: the ratio of resource inputs compared to outputs
life expectancy: the average time a person can be expected to live
pension: money paid under given conditions to a person following retirement or to surviving dependents
wealth: the total value (stock) of someone’s assets such as money, house, or investments
provisioning system: systems that manage the levels of energy and matter used to meet specific human needs
the good life (buen vivir): a life that brings wellbeing, with all its possible meanings, to self and others