Amsterdam, Brussels wager on doughnut economics amid Covid disaster

The streets of Amsterdam are empty because the lockdown continues because of the coronavirus (COVID-19) outbreak on April 12, 2020 in Amsterdam, Netherlands.

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LONDON — An increasing number of cities are embracing a doughnut-shaped financial mannequin to assist get well from the coronavirus disaster and scale back publicity to future shocks.

British economist and writer of “Doughnut Economics” Kate Raworth believes it’s merely a matter of time earlier than the idea is adopted at a nationwide degree.

The Dutch capital of Amsterdam turned the primary metropolis worldwide to formally implement doughnut economics in early April final yr, selecting to launch the initiative at a time when the nation had one of many world’s highest mortality charges from the coronavirus pandemic.

Amsterdam’s metropolis authorities stated on the time that it hoped to get well from the disaster and keep away from future crises by embracing a metropolis portrait of the doughnut idea.

As outlined in Raworth’s 2017 e-book, doughnut economics goals to “act as a compass for human progress,” turning final century’s degenerative financial system into this century’s regenerative one.

“The compass is a doughnut, the type with a gap within the center. Ridiculous although that sounds, it’s the solely doughnut that really seems to be good for us,” Raworth informed CNBC through phone.

Its purpose is to make sure no person falls in need of life’s necessities, from meals and water to social fairness and political voice, whereas guaranteeing humanity doesn’t break down Earth’s life assist methods, resembling a secure local weather and fertile soils.

It might be superb information for thus many individuals if a profitable doughnut in Amsterdam signifies that different cities, international locations and establishments will begin utilizing the idea.

Marieke van Doorninck

Deputy mayor of the Metropolis of Amsterdam

Utilizing a easy diagram of a doughnut, Raworth means that the outer ring represents Earth’s environmental ceiling — a spot the place the collective use of sources has an antagonistic affect on the planet. The inside ring represents a sequence of internationally agreed minimal social requirements. The house in between, described as “humanity’s candy spot,” is the doughnut.

“We need to be certain that all people has the elemental sources they should lead a life with dignity, neighborhood and alternative. Go away no person within the gap within the center,” Raworth stated.

The mannequin, which has beforehand been recommended by Pope Francis, has acquired renewed consideration amid the worldwide well being disaster.

Students advocating for a brand new method argue that the present financial system sacrifices each individuals and environments at a time when all the pieces from shifting climate patterns to rising sea ranges is world in scope and unprecedented in nature.

The ‘aha’ second

The Doughnut Economics Motion Lab, or DEAL, began working with Amsterdam policymakers to downscale the worldwide idea of the doughnut right into a metropolis mannequin in December 2019, Raworth stated. The municipality then formally adopted the mannequin on April 8, 2020.

“We had some doubts at first relating to the timing,” Marieke van Doorninck, deputy mayor of the Metropolis of Amsterdam, informed CNBC.

“But it surely turned out that folks have been additionally eager for concepts to rebuild our financial system after the disaster. Our round technique is a device to make sure we do not return to ‘enterprise as traditional’ however look ahead to a option to form our financial system in a different way.”

A basic view reveals the continuing building of the Dhaka Metro Rail undertaking in Dhaka on March 16, 2021.

MUNIR UZ ZAMAN | AFP | Getty Photographs

Inside six weeks of Amsterdam’s announcement, Raworth informed CNBC that policymakers in Copenhagen, Denmark had began exploring the idea. Belgium’s capital metropolis 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.

Historic center of Amsterdam, the capital city of the Netherlands.

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“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.”

Rethinking ‘old economic mantras’

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.”

Despite the coronavirus crisis, people enjoy a warm Saturday afternoon on February 20, 2021 in Brussels, Belgium.

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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.”

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