New growth model- Doughnut Economics

Since 1940, GDP growth has been the measure of development

New growth model- Doughnut EconomicsHowever, the present pandemic shows that we need to change the business as usual approach. Doughnut economics is one such approach.

  • One promising conceptual approach has been the “doughnut” theory of economic welfare proposed by Oxford economist Kate Raworth. 

Doughnut economics 

  • It is an economic theory developed by Kate Raworth from Oxfam which places humanity’s 21st century challenge as ensuring that every person has the resources they need to meet their human rights, while collectively we live within the ecological means of this one planet.
  • The ‘doughnut’ of planetary and social boundaries is an approach to framing that challenge as seen below:
  • It used the concept of planetary boundaries. Planetary boundaries is a concept involving Earth system processes that contain environmental boundaries. It was proposed in 2009 by a group of Earth system and environmental scientists, led by Johan Rockström from the Stockholm Resilience Centre and Will Steffen from the Australian National University. 
  • The group wanted to define a “safe operating space for humanity” for the international community, including governments at all levels, international organizations, civil society, the scientific community and the private sector, as a precondition for sustainable development. The framework is based on scientific evidence that human actions since the Industrial Revolution have become the main driver of global environmental change.
  •  In Raworth’s framework, the destination of economic welfare is reached when the goals of seven economic foundations are met without overshooting nine environmental ceilings. 
  • The inner ring of the doughnut represents the minimum social foundations to be met, and the outer ring of the doughnut represents a boundary or ceiling on environmental impact.
  •  The idea is to leave no one behind in the “hole” of the doughnut. The social foundations that Raworth postulates are Maslowian ideals like food, clothing and shelter, combined with democratic ones like social equity, political voice, peace and justice. 
  • Environmental ceilings, in turn, refer to things like ocean acidification, climate change and biodiversity loss. Metaphorically, you might think of it as driving with a speed limit, both to reduce risk and optimize fuel usage.
  • Governments have been attempting to incorporate these elements in their policy goals. The idea of “inclusive growth” is an attempt to focus on social foundations at the same time as increasing the growth of GDP. 

A sectoral policy of emphasis or subsidy for solar power, for example, is an attempt to balance a country’s energy sources with more environmentally favourable alternatives. However, the lesson from accelerating climate change and the pandemic is that this is not “far enough, fast enough”.

Trust, security and a sense of community are vital to social wellbeing”. As we know from the pandemic, people suffer physically and mentally when these things are absent. Society itself is threatened when they decline.

Q) The pandemic has shown that the world needs a new idea of development that is inclusive and sustainable without compromising on growth. What should be the kind of policy that encourages this;kind of development?

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