By Celine Lai

Amsterdam is an example of a city with an economy that promotes a liveable climate.  

Amsterdam’s ‘doughnut economy’ and circular city concept puts climate ahead of GDP. 

PBS Newshour reports in their video (below) that Amsterdam is the first city in the world to adopt a radical economic theory that suggests economic growth shouldn’t be the ultimate measure of success. Instead, “doughnut economics” focuses on protecting the environment while meeting citizens’ basic needs.

The video explains the concept of Doughnut economics, a theory which asserts that Gross Domestic Product (GDP) is not the true measure of prosperity or of well-being of a nation. PBS interviews a range of people, and explores the application of “doughnut economics”. 

The Doughnut concept was first published by Kate Raworth in 2012, who proposed a social foundation and ecological ceiling for the whole world. Ever since then people have asked: can we downscale the Doughnut so that we can apply it here – in our town, our country, our region?  

Kate explains the Amsterdam example in her website below:

CNBC has reported thatAmsterdam bet its post-Covid recovery on ‘doughnut’ economics — more cities are now following suit.

CNBC says that the Dutch capital of Amsterdam became the first city worldwide to formally implement Doughnut economics in early April last year.

Using a simple diagram of a doughnut, Raworth suggests that the outer ring represents Earth’s environmental ceiling — a place where the collective use of resources has an adverse impact on the planet. 

The inner ring represents a series of internationally agreed minimum social standards. The space in between, described as “humanity’s sweet spot,” is the doughnut.

doughnut economics

The Doughnut Economics model

A doughnut economy is a regenerative and redistributive economy by design. The goal of such a system would be to cap planetary resource use while allowing developing countries to meet basic standards of human needs.

Amsterdam now has a fully local, circular economy, with a focus on recovering and using waste resources to make and re-make products, instead of mining new material.  From the ABC :

“Doughnut economics may have the answer to the dilemma between environment and economic growth”

The ABC reports that:

The ideas outlined in Raworth’s book, subtitled Seven Ways to Think Like a 21st-Century Economist, are increasingly being used around the world, including by a new collaboration Regen Melbourne, that’s looking at ways to make Melbourne a better, more socially just and environmentally responsible city.

As it is not realistic for nations to think that they can grow their economy endlessly, with greenhouse gas emissions impacting our climate and unsustainable consumption affecting biodiversity, attention needs to be focused on rearranging our global economy. Doughnut Economics could be the gate-way for this.

Nobody is saying that a transformation will either be quick or without challenges, but we have no choice but to change our ways. We need a new economy with sustainable practices to get to net-zero greenhouse gas emissions fast, so let’s all have the will and compassion to do so.