Amsterdam: The Economy is a Doughnut

coffee and chocolate

Amsterdam is embracing an ecological approach to their economy by looking at it as if it’s a doughnut. Of course, it’s not a literal snack they are using, it’s a metaphor to visualize how different aspects of life interact with each other in an economic model. Classical economic models assume there’s always an external source of input and an external output where waste can be dumped (like the sea, air, landfills, etc.); but ecological models take into consideration the whole economic system. As a result these doughnut models capture reality much better since it’s no longer possible to socialize the costs of waste from running a modern economy.

“Within these two boundaries, between the social foundation that is on the inside and the ecological ceiling, there is this doughnut-shaped space where it is possible to meet the needs of all within the means of the living planet,” says Ilektra Kouloumpi, a senior strategist at Circle Economy, a nonprofit that has been working with Raworth, along with the nonprofits Biomimicry 3.8 and C40 Cities, to help the Amsterdam government adopt the doughnut model to make policy decisions. “The overarching question is: How can our city be home to thriving people, in a thriving place, while respecting the well-being of all people and the health of the whole planet?”

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