Amsterdam is now using the ‘doughnut’ model of economics: What does that mean?

Fast Company discusses why Amsterdam is now using the ‘doughnut’ model of economics: What does that mean?. It’s a simple way to illustrate an economic system where the city doesn’t let anyone fall into poverty, while also living within a sustainable environmental footprint.

As Amsterdam plans for its post-coronavirus recovery, it’s also rethinking what economic success looks like. In doing so, it’s not looking at traditional financial metrics of how to determine when the city has recovered. Instead, the city will be the first in the world to officially adopt the “doughnut” model of economics.

The model, developed by U.K. economist Kate Raworth, is a simple way to illustrate a complex goal. The inner ring of the doughnut represents minimum standards of living, based on the UN’s Sustainable Development Goals. This entails the basic essentials everyone needs to thrive, from food and clean water to gender equality and adequate housing. According to the model, no one should fall into the hole in the center of the doughnut, which would mean they don’t have enough to afford basic needs. The outer ring of the doughnut represents the ecological limits of the planet, from biodiversity loss and air pollution to climate breakdown. Amsterdam wants to stay between the inner and outer rings.

 

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