Doughnut Economics summary

Doughnut Economics is an interesting book that takes a different look at the economic paradigm we live in.

Today, free-market capitalism rules the roost. Multinational corporations are the big economic drivers with our economy which is primarily based around extraction.

The drivers of economic growth involve drilling and extracting fossil fuels from the ground. Coal, oil and gas were what powered the industrial revolution and the world we live in today.

The problem is that over two hundred years of burning fossil fuels has damaged our planet. Temperatures are rising, the ice caps are melting and we are in danger of runaway climate change becoming a reality.

If we are to get carbon emissions under control we need to change the way our economies are built. To continue down this path, will see our planet become The Uninhabitable Earth, where life is perilous.

That’s where this Doughnut Economics summary comes in. Kate Raworth’s book offers a solution to the problem we face.

Not only could her ideas boost prosperity and change our economics, they could protect our planet too. After all, we only have one home. If we trash it, we trash ourselves in the process.

Doughnut Economics summary

  • 1 sentence summary: Doughnut economics looks at how we can develop an economy which is fairer, more just and helps us to live within our means to protect the planet.
  • Author: Kate Raworth
  • Pages: 372
  • Year published: 2017
  • Rating: 9/10

Takeaway 1 – A circular economy is better than an extractive one

What’s driven the economy since the industrial revolution has been fossil fuels. Since the late 18th century, we have been indebted to these fuels for the massive economic expansion we’ve seen.

The problem is that we’ve been destroying the planet during this process. Fossil fuels release carbon dioxide when burned, which is a greenhouse gas. The more carbon dioxide in our atmosphere the more heat is trapped and the higher temperatures rise.

If we continue with this path, the potential consequences are huge. As Naomi Klein outlines in The Shock Doctrine, free-market capitalism is the dominant ideology and one that’s hard to budge.

Kate Raworth proposes a different economy. Instead of our economy being based on extractive methods, we should change it to a circular economy.

Right now, most of the goods we produce go to waste. Think of the mountains of plastic waste which have built up over the years. Despite our best efforts, only 9% of all the plastic ever made has been recycled.

Most of it ends up in the ocean or in landfill. This isn’t sustainable.

The solution is to ensure the goods we use can be repurposed in some form. A good example is a toothbrush.

If you use a plastic one, not only is it made from oils extracted from the ground, once you’re finished with it, you throw it away. Most likely it will end up in the ocean rather than being recycled.

A solution is to use a bamboo toothbrush. Bamboo is sustainable which means the toothbrush can be recycled rather than thrown away. When you’re done with your brush, you can bury it in the soil where it will decompose continuing the natural cycle.

Unlike a plastic toothbrush, it won’t stay in the environment for one thousand years, leaching carbon dioxide until it eventually decomposes.

This is one small example, and we need to scale this up massively to have a big effect on the planet. But it’s a start, and one that shows what’s possible with a circular economy.

Takeaway 2 – Growth can’t be infinite on a planet with finite resources

One of he primary problems with our current economic model is that it assumes growth will continue. There’s one problem with this.

We live on a planet with finite resources. Infinite growth is an impossibility given our circumstances. Given that most economic models assume growth will continue unabated, it doesn’t take a genius to spot the flaw.

It’s easier for politicians to bury their heads in the sand than recognise the elephant in the room. But with the climate changing before our eyes, inaction is no longer viable.

We have to change our ways before they are changed for us.

This is what Kate Raworth is proposing in Doughnut Economics. This quote from the book highlights the scale of the problems we face:

“Between 1950 and 2010, the global population almost trebled in size, and real-world GDP increased sevenfold. Worldwide, freshwater use more than trebled, energy use increased fourfold, and fertiliser use rose over tenfold.”

All of this is unsustainable. We cannot continue to treat the Earth as a resource with never-ending supply if we want to continue to live the way we do.

We need to wean ourselves the addiction to GDP which plagues societies across the globe and focus on different metrics instead.

A focus on living standards, environmental quality and health should be our focus rather than how much the economy has grown by.

Takeaway 3 – The doughnut allows us to live within our means without endangering the planet

If you’re wondering what the doughnut is, then I doubt you’re alone! Here’s a visual representation to help you understand the concept.

The Doughnut

The Doughnut is a way of looking at economics that can help humankind live in harmony with the planet rather than exerting strain on it.

Below the doughnut lies shortfalls in human well-being such as health, food, water etc.

Beyond the doughnut lies the ecological ceiling, which if overshot, will lead to the degradation of the planet. Air pollution, biodiversity loss and climate change are just a. few of the issues caused by overshooting the ecological ceiling.

Between those two boundaries is the sweet spot that is ecologically and socially just.

It’s hard to understand a lot of concepts, but the illustration of the doughnut helps to explain it in an elegant manner.

To ensure we don’t deplete the Earth of vital resources and ruin it for future generations, we must endeavour to keep within the doughnut.

Changing out economic model won’t be easy, it will meet a lot of resistance, but looking at the image above, it’s hard not to wonder that something needs to change.

If we don’t, the planet could become damaged beyond repair and that would be entirely down to us.

Favourite Quotes

  • “The 2008 financial crash sent shockwaves through the global economy, robbing many millions of people of their jobs, homes, savings and security. Meanwhile, the world has become extraordinarily unequal: as of 2015 the world’s richest now own more wealth than all the other 99% put together.”
  • “Human activity is putting unprecedented stress on Earth’s life-giving systems. Global average temperature has already risen by 0.8 c and we are on track for an increase of almost 4 C by 2100, threatening a scale and intensity of floods, droughts, storms and sea-level rise that humanity has never before witnessed.”
  • “Instead of prioritising metrics like GDP, the aim should be to enlarge people’s capabilities – such as to be healthy, empowered and creative – so that they can choose to be and do things in life that they value. And realising those capabilities depends upon people having access to the basics of life – adapted to the context of each society – ranging from nutritious food, healthcare and education to personal security and political voice.”
  • “In a few decades’ time we will look back, no doubt, and consider it bizarre that we once attempted to monitor and manage our complex planetary household with a metric so fickle, partial and superficial as GDP.”
  • “Adam Smith’s great insight was to show that the marketplace can mobilise diffuse information about people’s wants and the cost of meeting them, thereby coordinating billions of buyers and sellers through a global system of prices – all without the need for a centralised grand plan.”

Doughnut Economics review

This Doughnut Economics summary has looked at Kate Raworth’s fascinating book about how we can create a different global economy to mitigate climate change.

Capitalism is primarily focused on creating wealth. Most of us see it in this manner. The problem is the methods of creating wealth we’ve employed since the industrial revolution are damaging the planet.

Most of us can see this. A quick look at the rise in carbon dioxide in the atmosphere and the increase in temperatures around the globe will show this. But most of us don’t know what to do about it.

The beauty of Raworth’s book is that she provides a clear alternative. It’s well thought out, lucid and engaging. I found myself nodding in agreement at a lot of what she suggests.

Her ideas may come across as too idealistic for some people, but they do have merit. Like Utopia For Realists and The Good Ancestor, the ideas may seem far-fetched now, but so did most new ideas at one point.

This is a fantastic book to read if you want to understand what needs to change in order to preserve the planet and stop runaway climate change.

Will Raworth’s solutions work? It’s hard to say without them being implemented. But for that to happen, we can only hope politicians heed he advice.

Otherwise, we could end up with a planet on fire much more than it is now.

Who should read Doughnut Economics?

Anyone who is looking to read about what the economy of the future might look like. The world has to change and Kate Raworth offers a unique perspective and what that world may look like.

If you want to challenge yourself and your assumptions, Doughnut Economics is a brilliant book.

What Raworth outlines in the book is a fascinating model for a future economic system. Even if you don’t agree with her thoughts, the book will still cause you to think and challenge your assumptions.