Amsterdam bet its post-Covid recovery on 'doughnut' economics — more cities are now following suit

LONDON — More and more cities are embracing a doughnut-shaped economic model to help recover from the coronavirus crisis and reduce exposure to future shocks.

British economist and author of “Doughnut Economics” Kate Raworth believes it is simply a matter of time before the concept is adopted at a national level.

The Dutch capital of Amsterdam became the first city worldwide to formally implement doughnut economics in early April last year, choosing to launch the initiative at a time when the country had one of the world’s highest mortality rates from the coronavirus pandemic.

Amsterdam’s city government said at the time that it hoped to recover from the crisis and avoid future crises by embracing a city portrait of the doughnut theory.

As outlined in Raworth’s 2017 book, doughnut economics aims to “act as a compass for human progress,” turning last century’s degenerative economy into this century’s regenerative one.

“The compass is a doughnut, the kind with a hole in the middle. Ridiculous though that sounds, it is the only doughnut that actually turns out to be good for us,” Raworth told CNBC via telephone.

Its goal is to ensure nobody falls short of life’s essentials, from food and water to social equity and political voice, while ensuring humanity does not break down Earth’s life support systems, such as a stable climate and fertile soils.

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.

“We want to make sure everybody has the fundamental resources they need to lead a life with dignity, community and opportunity. Leave nobody in the hole in the middle,” Raworth said.

The model, which has previously been commended by Pope Francis, has received renewed attention amid the global health crisis.

Scholars advocating for a new approach argue that the current economic system sacrifices both people and environments at a time when everything from shifting weather patterns to rising sea levels is global in scope and unprecedented in nature.

The Doughnut Economics Action Lab, or DEAL, started working with Amsterdam policymakers to downscale the global concept of the doughnut into a city model in December 2019, Raworth said. The municipality then formally adopted the model on April 8, 2020.

“We had some doubts at first regarding the timing,” Marieke van Doorninck, deputy mayor of the City of Amsterdam, told CNBC.

“But it turned out that people were also longing for ideas to rebuild our economy after the crisis. Our circular strategy is a tool to ensure we don’t go back to ‘business as usual’ but look forward to a way to shape our economy differently.”

Within six weeks of Amsterdam’s announcement, Raworth told CNBC that policymakers in Copenhagen, Denmark had started exploring the concept. Belgium’s capital city of Brussels went on to adopt the doughnut in late September, while the Canadian city of Nanaimo voted to follow suit in December.

Raworth said many more towns and cities worldwide are in contact with DEAL every week, and work continues with partners in Costa Rica, India, Bangladesh, Zambia and Barbados, among others.

“The city of Amsterdam has always been a pioneering city. It loves to be a pioneer which is a brilliant attribute because there are many cities that will not lead. They will only follow when they see someone else go,” Raworth said.

“It is not going to work to have three, four, five separate strategies all trying to connect. When they encountered the concept of the doughnut, I know that they said: ‘Aha, this is a concept that sits above and embraces everything that it is that we want to do.'”

Van Doorninck, who’s responsible for spatial development and sustainability in the Dutch capital, said the city’s circular strategy was focused on areas where local government “can really make a difference.”

These areas include food and organic waste streams, consumer goods and the built environment. As a result, the city has targeted a 50% reduction in food waste by 2030, implemented measures to make it easier for residents to consume less (by establishing easily accessible and well-functioning second-hand shops and repair services over the next three years) and pushed for construction companies to build with sustainable materials.

“We are very proud to be an example for other cities and we (are) happy to spread the message,” van Doorninck said.

“Nothing succeeds like success. It would be very good news for so many people if a successful doughnut in Amsterdam means that other cities, countries and institutions will start using the theory.”

Around five months after Amsterdam bet its post-Covid recovery on the doughnut, the Brussels region formally embraced the model, using it as a portrait for the city’s transition to a sustainable and thriving economy.

Barbara Trachte, secretary of state for the Brussels region, told CNBC that an important feature of the Brussels doughnut was its “deeply participatory dynamic.”

Trachte, who is responsible for economic transition and scientific research for the Brussels region, said the model embodied a “paradigm shift” and helped to shape the region’s efforts to look at economics differently.

“I think people understand the power of the doughnut theory, to rethink the old economic mantras,” she said. “It gives them a positive boost, a sort of ‘let’s do it’ attitude, that can move mountains. And if the Brussels Region can help show the way, all the better.”

Raworth said there was something about the dynamism, scale and energy of a city that might help to explain why these areas are more open to experimenting with new ideas. There’s also, certainly in the U.K. at least, a sense of local civic pride that means people tend to be prouder to say the city they are part of, rather than the nation in which they reside, she said.

“There’s also something about the visibility of a city. You can see what happens when the city policymakers paint yellow lines on the street and move car lanes to bike lanes. You can see how that changes,” she added.

When asked whether she believed the doughnut model would soon be adopted at a national level, Raworth replied: “Yes, I do.”

“Everything that’s happening is because people in a place have seen it and said: ‘We think that could be useful for us.’ So, it’s all drawn by local changemakers,” she continued.

“We go where the energy is and it is getting picked up. We know the power of peer inspiration so when Amsterdam launches, it triggers this interest in many places.”