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Kate Rawoth's doughnut economic model

Updated: Dec 25, 2021



We can only applaud when common sense prevails. And we consider Oxford and Cambridge economist Kate Rawoth's doughnut economic model as being full of common sense. ​ Over the last ten years, this model has been developed in book form and has become popular. But we will use for its description an early version of it, an Oxfam paper from 2012. In it, the model is referred to as "a safe and just space for humanity to thrive in". The model is simple and appeals to common sense. On the one hand, human beings need a minimum of resources such as food and drinking water. On the other hand, we need the framework of a society in which certain values, such as social and gender equity, prevail. Where there are also educational opportunities and widespread access to health services.


The economist has recently stated that this minimum is implicit in the development goals of the UN's so-called 2030 Agenda.


But there is also a maximum or "environmental ceiling", marked by limits designed to protect the sustainability of natural resources. Drinking water consumption, for example, must be measured, and nitrogen and phosphorus cycles must be considered.


Sustainable economic development must therefore move in a certain space, above a social foundation, marked by the minimum needs of every human being, and below the ceiling marked by environmentally damaging activities. Such as, for example, the use of fossil fuels, which uncontrollably accelerates climate change through the greenhouse effect.


What is the solution to many of the current problems, according to the economist? The proposed framework, accompanied by appropriate government policies. Some examples provided in Oxfam's 2012 paper are illustrative:

Food: Providing the additional calories needed by the 13 per cent of the world’s population facing hunger would require just 1 per cent of the current global food supply.

Energy: Bringing electricity to the 19 per cent of the world’s population who currently lack it could be achieved with less than a 1 per cent increase in global CO2 emissions.


Income: Ending income poverty for the 21 per cent of the global population who live on less than $1.25 a day would require just 0.2 per cent of global income.


In fact, the biggest source of planetary-boundary stress today is excessive resource consumption by roughly the wealthiest 10 per cent of the world’s population, and the production patterns of the companies producing the goods and services that they buy:


Carbon: Around 50 per cent of global carbon emissions are generated by just 11 per cent of people;


Income: 57 per cent of global income is in the hands of just 10 per cent of people;


Nitrogen: 33 per cent of the world’s sustainable nitrogen budget is used to produce meat for people in the EU – just 7 per cent of the world’s population.

​ Another aspect of Rawoth's ideas that can be highlighted is her critique of the current economic model, based on unlimited growth. According to the prevailing model, price is the mechanism that balances supply and demand in a free market, in which rational individual decisions are made in order to maximise utility. These ideas date back to the 18th century and ignore, for example, the findings of neuroeconomics that cast doubt on the rationality of many economic decisions. And that any student who has taken an introductory marketing course could endorse.


We invite the reader to explore this interesting economic model, which is a clear example of a paradigm at the core of which lies the common good.


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