How to build back better through doughnut economics at the existence of people within the the planetary boundary.
COVID-19 is definitely putting a huge economic stress on the private and public sectors. This means we need to ensure that we build resilience into our financial system so as not to continuously fight through disaster, but actually prepare and design our system against future shocks. I'm convinced that going back to business as usual and bailing out high-carbon producing industries and "hard-to-abate" sectors (like the aviation sector, car manufacturers and the fossil fuel industry), is not the right way forward.
The only path to follow is to stop investing in stranded assets – such as infrastructure that uses fossil fuel reserves, particularly coal – and instead move on to building the decarbonised infrastructure that we need to meet our climate neutrality goals in Europe and the Paris Agreement goals globally.
During the post-coronavirus era, as nations look to rebuild, we fundamentally need to transform, not reform, our economies. In 2017, economist Kate Raworth proposed a revolutionary new model called Doughnut Economics that is built on a social foundation with an ecological ceiling in order to break the cycle of a growth-at-all-costs-and-profit mentality.
What is Doughnut Economics? Kate Raworth of Oxford University’s Environmental Change Institute in her book – “Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist”, reminds us that we are wrong to treat the so-called “economic growth” to signify wellbeing of a country. The welfare of a country can scarcely be derived from a measure of national income. Economic growth, she points out, measures only annual flow, rather than stocks of wealth and their distribution.
The final aim of economic activity, Raworth argues, should be “meeting the needs of all within the means of the planet”. If we put it across to an individual country, what she means is instead of the country’s economy that needs to grow, whether or not they make us thrive, what we need is an economy that “make us thrive, whether or not we grow”. This means changing our thinking of the present economic model.
Yuge Lei
Frankfurt am Main, Hessen, Germany
I firmly believe that we need a shift away from the understanding of economics that shapes the way we think and act today.