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  • Writer's pictureEmily Lombardo

Could this economic theory save the planet (and ourselves?)

Growth at the cost of everything else. It’s been how we have defined a “strong” economy- at the cost of many other potential benefits- for the last four hundred years of following capitalistic economic structures. But Oxford Economist Kate Raworth has another idea… Let’s find out more about ‘doughnut economics’!

Meet “Doughnut theory,” Raworth’s new economic theory that is designed to bring us back into nature and create regenerative economic opportunities without hurting the environment or violating human rights. “The concepts of the 20th century emerged from an era in which humanity saw itself as separated from the web of life,” says Raworth in a recent interview with Time magazine. “It’s just an ultimate absurdity that in the 21st century when we know we are witnessing the death of the living world unless we utterly transform the way we live, that death of the living world is called ‘an environmental externality.’”

First published as a paper in 2012 and then as a book in 2017, Raworth sees hope for humanity, living in a just and peaceful way with a generative economy, as the sweet spot within two rings (this creates the doughnut shape.) The outer ring consists of nine “planetary boundaries” that threaten to wipe out humanity if crossed such as ozone layer depletion, freshwater withdrawals, and chemical pollution. The inner ring is labeled the “shortfalls” which spread across 12 sections including ‘food’, ‘education’, ‘gender equality’, and ‘housing.’ These 12 sections are defined as the “social foundation,” that every human must have access to and are derived from the Sustainable Development Goals of the United Nations.

While Rawoth’s book doesn’t focus on specific policies or goals for stakeholders to establish, she believes that it's up to the stakeholders (be it local or global) to decide on their own policies, Amsterdam is taking on the challenge of bringing Doughnut Theory economics into actual practice.

Amsterdam, ironically one of the birthplaces of capitalism with the creation of the Dutch East India Company and trading shares back in 1602, is bringing Doughnut theory to life. Using the principles of a circular economy, Amsterdam is focused on reusing and recycling materials across sectors including consumer goods and building materials, the development of the man-made (and sustainably made!) Beach Island. The island is being constructed from reclaimed sand brought by boats that run on low-emission fuel. The construction process was also designed to minimally hurt local wildlife and the building materials used on Beach Island must also meet new government standards that call for materials to sustainably made and reusable.

Another change has been the new “True Price Initiative.” Launched last year, the True Price Initiative allows customers to see the total price of the goods they purchase. For example, courgettes cost an extra 15 cents per kilo: 6 cents for their carbon footprint, 5 for farming, and 4 goes to fair wages for the farmers. The True Price Store is considered to be the first of its kind in the world to offer goods at prices that forgo exploitation, pollution, and climate change.

The U.S. cities Philadelphia and Portland are also figuring out how to fit Doughnut Theory into their plans for creating a green city through the new Thriving Cities Initiative. While these programs are new and will undoubtedly have stages of trial and error, these changes could revolutionize the city model and show, worldwide, how creating sustainable measures not only helps its citizens but can revolutionize the entire infrastructure of the city.

Is your city taking measures to start a generative economy? What do you think of Doughnut theory as a viable way of life? We’d love to know! Join the conversation via our Instagram channel, or say hi to the team at


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