Doughnut Economics

youtube-Logo-2gc2reddit-logoOff the keyboard of Ugo Bardi

Follow us on Twitter @doomstead666
Friend us on Facebook

Published on Cassandra's Legacy on June 17, 2017

cassandra_retouched

Discuss this article at the Economics Table inside the Diner

Doughnut Economics:a step forward, but not far enough


Doughnut Economics, by Kate Raworth (Chelsea Green, 2017) is an interesting book that goes in the right direction in the sense that it promotes a circular economy, But it leaves you with the impression that it missed that extra step that would have lead it to define the goal in the right way. Bridging the gap between standard economics and biophysical economics is still far away.

So, what is this "Doughnut" that gives the title to the book? Initially, I had imagined that it was supposed to be a sort of mandala representing the concept of circular economy. But that doesn't seem to be the case: circular mandalas often represent the cyclical movement of a wheel, but the doughnut doesn't (as, indeed, most doughnuts are not supposed to be used as wheels). Here is how it is represented in the book:
 


It is described as "a radically new compass for guiding humanity this century." Ambitious, to say the least, but how is that supposed to work, exactly? Maybe I am missing something, but I not sure I can understand why the numerous concepts appearing in the figure should be arranged in a "doughnut."

The problem with the doughnut is not so much understanding why it is shaped like a doughnut, but what it lacks. Look at the outer ring; you will see 10 sectors, all related to pollution: climate change, ocean acidification, chemical pollution, etc. Something is conspicuously missing and it is not a minor element of the overall picture. It is natural resources and, in particular, non-renewable resources (*)

Natural resources, their depletion, and the related concept of "overshoot" are not just missing from the doughnut, they go mostly unmentioned and unnoticed in the whole book. To give you an example, Raworth mentions only once the 1972 study "The Limits to Growth" that was the first to pinpoint the resource problem. In a discussion of less than than two pages, I think her position can be summarized by the following statements:

Mainstream economists were quick to deride the model's design on the basis that it underplayed the balancing feedback of the price mechanism in markets. If non renewable resources became scarce, they argued, prices would rise, triggering greater efficiency in their use, the wider use of substitutes, and exploration for new sources. But in dismissing World 3 and its implied limits to growth , they too quickly dismissed the role and the effect of what the 1970s model simply called pollution … World 3's modeling of pollution turned out to be prescient…. recent data … find that the global economy seems to be closely tracking its business-as-usual scenario.

As it is often the case in this book, Raworth's statements need some work to be interpreted because they are always nuanced; if not vague, as when she says one should be "agnostic" about economic growth (**). Here, the interpretation seems to be that The Limits to Growth may have been right, but only because it took into account pollution. Instead, its treatment of non-renewable natural resources was wrong because depletion can be completely neutralized by market factors. Raworth doesn't seem to realize that she is contradicting herself, here: if the "business as usual" scenario produced good results in terms of comparison with the real world's economy, it is because it contained depletion as a major constraint. World 3 could also be run in the hypothesis of infinite natural resources, with pollution the only constraint, but the results would not be the same.

That's the thread of the whole book: natural resources are not a problem; we should be worried only about pollution. Raworth doesn't link the concept of the circular economy to recovering non-renewable resources; she proposes only in relation to abating pollution, with the corollary that it also brings about also better social equality. This is not wrong; it is true that a cyclical "regenerative" economy would be able, in principle, to reduce or eliminate pollution. Still, it is curious how the question of mineral resources is so conspicuously missing in the book.

Kate Raworth is described in the book flap as a "renegade economist", but she still reasons like an economist. The idea that the price mechanism will make depletion always irrelevant is old and it goes back to the 1930s, when the so-called "functional model" was presented, stating exactly what Raworth describes. The idea is that market factors will always re-adjust the system and magically make depletion disappear. By now, the functional model is deeply entrenched in the standard economic thought and there seems to be no way to dislodge it from its preheminent position.

The interesting point is that not only economists tend to dismiss depletion as irrelevant. In recent times, the whole "environmental movement" or the "Greens" have taken exactly the same position. All the debate about climate change is normally based on the supposition that minerals, and in particular fossil fuels, will remain cheap and abundant for the current century. If this is the case, it makes sense to propose to spend untold amounts of money for carbon capture and sequestration (CCS) rather than for renewable energy. It goes without saying that, if this assumption turned out to be wrong, the whole exercise of CCS, if it were undertaken at the necessary scale, would turn out to be the greatest resource misplacement of resources in human history, possibly even worse than nuclear energy.

Why is that? As a puzzle, it is difficult to solve. In principle, resource depletion and its negative effects would seem to be easy to understand. Easier than the complex chain of physical factors that leads from the emission of greenhouse gases to disastrous events such as sea level rise, heat waves, hurricanes, and the like. Maybe it is just a question of the lifetime of memes. The meme of depletion started before that of climate change and it is now in its downward trend. Whatever the case, we seem to be locked in a view of the world that misses some fundamental elements of the situation. Where this special form of blindness will lead us is all to be seen. 

Getting back to Raworth's book, despite the criticism above I can also say that it is worth reading for its broad approach and the wealth of concepts it contains. Its discussion on how the science of economics came to be what it is nowadays is, alone, worth the price of the book. Although it misses part of the problem, it may open up new views for you.

(*) You may also have noticed that the concept of "overpopulation" is missing in the doughnut. On this point, Raworth maintains in the text that if people are given the possibility of having a life free of deprivation, they won't reproduce like rabbits – a concept on which I tend to be in agreement; even though its practical implementation in the current world's situation is problematic, to say the least.

(**) The idea of a "zero growth" or "steady state" society would seem to be a fundamental feature of a circular economy, but it is barely mentioned in the book

3 Responses to Doughnut Economics

  • Etyere Petyere says:

    Here another clueless MORON……;

     " If this is the case, it makes sense to propose to spend untold amounts of money for carbon capture and sequestration (CCS) rather than for renewable energy. It goes without saying that, if this assumption turned out to be wrong, the whole exercise of CCS, if it were undertaken at the necessary scale, would turn out to be the greatest resource misplacement of resources in human history, possibly even worse than nuclear energy."

    …..no CCs but GREEN energy will save us . except anyone having a faint idea of these things knows that green energy doesn’t exist w.o. fossil fuels 

  • Anti Troll says:

    EmptyPempty: here is another CLUELESS MORONIC idea: human climate extinction by 2026. Promoted by the clueless moron McSerpent and believed by his CLUELESS MORON ventriloquist dummies

  • Skip says:

    The ultimate and least expensive solution to environmental collapse: vibrator-condoms  Billions could be made on its patent.

Leave a Reply

Your email address will not be published. Required fields are marked *

Knarf plays the Doomer Blues

https://image.freepik.com/free-icon/musical-notes-symbols_318-29778.jpg

Support the Diner
Search the Diner
Surveys & Podcasts

NEW SURVEY

Renewable Energy

VISIT AND FOLLOW US ON DINER SOUNDCLOUD

" As a daily reader of all of the doomsday blogs, e.g. the Diner, Nature Bats Last, Zerohedge, Scribbler, etc… I must say that I most look forward to your “off the microphone” rants. Your analysis, insights, and conclusions are always logical, well supported, and clearly articulated – a trifecta not frequently achieved."- Joe D
Archives
Global Diners

View Full Diner Stats

Global Population Stats

Enter a Country Name for full Population & Demographic Statistics

Lake Mead Watch

http://si.wsj.net/public/resources/images/NA-BX686_LakeMe_G_20130816175615.jpg

loading

Inside the Diner

Will GM Korea return its four S. Korean factories to the US?https://wolfstreet.com/2018/02/20/gm-shakes-down-south-korean-taxpayers/How GM Is Shaking Down South Korean TaxpayersWolf RichterFeb 20, 2018It follows the playbo...

http://palloy.earth/blog/contents/201802211206+Why+American+wants+a+war+with+Russia.htmWhy America wants a war with Russiaby P...

Here are five reasons from an evangelical Christian climate scientist.

Survey says yes...and he considers himself a he, not a she. But he DID get a boob job anyway, from what I understand. He apparently has owned and run the local movie house in Silverton for 43 years. Don't sit in the balcony, whatever you do.

Quote from: Eddie on Today at 02:26:08 PMHow about this, er, uh, guy....Stu Rasmussen, the mayor of Silverton Oregon. The TransWorld Candidate. [url...

Diner Twitter feed

Diner Newz Feeds
  • Surly
  • Agelbert
  • Knarf
  • Golden Oxen
  • Frostbite Falls

Quote from: Eddie on Today at 05:42:39 AMShe wants [...]

Quote from: luciddreams on February 19, 2018, 07:1 [...]

Quote from: Eddie on February 19, 2018, 11:56:42 A [...]

She wants a bullet-proof vest. The cops here (and [...]

Quote from: Palloy2 on February 19, 2018, 02:40:22 [...]

Quote from: Golden Oxen on February 08, 2018, 12:3 [...]

I just call 'em like I see 'em. I never [...]

Quote from: Eddie on February 08, 2018, 12:30:03 P [...]

Quote from: agelbert on February 08, 2018, 10:51:2 [...]

Internet down most of the time for past 2 days. Th [...]

Quote from: Surly1 on February 18, 2018, 12:30:46 [...]

Quote from: Eddie on February 18, 2018, 11:30:20 A [...]

Quote from: Golden Oxen on February 18, 2018, 09:3 [...]

http://www.bbc.com/news/business-43124259KFC shuts [...]

We are getting another snowfall here today, looks [...]

The Alaska Soap Opera continues...REhttps://www.us [...]

It was a walk in, spirit change.8th inning relieve [...]

It was that spoonful of sugar she took to make the [...]

Alternate Perspectives
  • Two Ice Floes
  • Jumping Jack Flash
  • From Filmers to Farmers

The Pendulum - Part One Retreat to High Ground By High Desert     Missing in the mix of hundreds of [...]

The (Mind) Games People Play By Cognitive Dissonance     Fair warning! This is a long and dense read [...]

Wisdom, Experience and Just-In-Time Thinking By Cognitive Dissonance   I try to remind myself each g [...]

This and That Vol 4 Mid Winter Musings By Cognitive Dissonance     Probably the one topic Mrs. Cog a [...]

Taking a Pass on Gas – Wood Preferred - Part Three By High Desert Homesteading This is the final ins [...]

Event Update For 2018-02-18http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.html Th [...]

Event Update For 2018-02-17http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.html Th [...]

Event Update For 2018-02-16http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.html Th [...]

Event Update For 2018-02-15http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.html Th [...]

Event Update For 2018-02-14http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.html Th [...]

NYC plans to undertake the swindle of the civilisation by suing the companies that have enabled it t [...]

MbS, the personification of the age-old pre-revolutionary scenario in which an expiring regime attem [...]

You know things have taken a turn for the desperate when women have started to drive. Or rather, whe [...]

From Filmers to Farmers is re-launched on the astounding open source blogging platform Ghost! [...]

The blogging scene is admittedly atrocious. Is there really no option for a collapse blogger to turn [...]

Daily Doom Photo

man-watching-tv

Sustainability
  • Peak Surfer
  • SUN
  • Transition Voice

Breathing Highways and Sponge Cities"We could do worse than to go back to the way nature manages rainfall."During the 20th Cen [...]

Junk Food for Salmon"For the geoengineering set, all this news provides an opening for more advanced biotech . [...]

Follow the Money, Mr. Mueller"“Ivanka got her father to bomb Syria by adroitly pushing his buttons. ‘Ivanka had long ago fig [...]

Yarrow's Spiderweb"We are, like spiders, carbon creations that have learned to use carbon as tools. "At the [...]

A Hawaiian Missile Lullaby"Q: What should one do to prepare for an incoming ICBM just minutes away?A: Hug. Smile. Your sh [...]

The folks at Windward have been doing great work at living sustainably for many years now.  Part of [...]

 The Daily SUN☼ Building a Better Tomorrow by Sustaining Universal Needs April 3, 2017 Powering Down [...]

Off the keyboard of Bob Montgomery Follow us on Twitter @doomstead666 Friend us on Facebook Publishe [...]

Visit SUN on Facebook Here [...]

To fight climate change, you need to get the world off of fossil fuels. And to do that, you need to [...]

Americans are good on the "thoughts and prayers" thing. Also not so bad about digging in f [...]

In the echo-sphere of political punditry consensus forms rapidly, gels, and then, in short order…cal [...]

Discussions with figures from Noam Chomsky and Peter Senge to Thich Nhat Hanh and the Dalai Lama off [...]

Lefty Greenies have some laudable ideas. Why is it then that they don't bother to really build [...]

Top Commentariats
  • Our Finite World
  • Economic Undertow

Nicely written. Entitlements are the largest issue and I am one of the entitlees; SS and Medicare re [...]

US Treasury Posts Gigantic $1.16 Trillion Shortfall in Fiscal 2017, Hilariously Points out “Where We [...]

All Hail! King Kaku https://youtu.be/cjQs447hHbo [...]

Nope. Guns cannot be carried around in public without a legitimate reason and must be stored in a lo [...]

Its just the human condition; everybody wants a freebie. Speaking of which I heard the EU has decide [...]

Is anyone having trouble logging in over here? If yes, let me know at Twitter: @econundertow Thanks. [...]

Central banks are system regulators. When they allow commercial bankers commit crimes they are compl [...]

In a way Steve, it seems that you are always arguing that the system is legit, even though many of u [...]

Coming at this from the perspective of a "woo", it's clear to me that a lot of negati [...]

We can look back and find clues: In 1907 there was a money panic that grew out of the failure of the [...]

RE Economics

Going Cashless

Off the keyboard of RE Follow us on Twitter @doomstead666...

Simplifying the Final Countdown

Off the keyboard of RE Follow us on Twitter @doomstead666...

Bond Market Collapse and the Banning of Cash

Off the microphone of RE Follow us on Twitter @doomstead666...

Do Central Bankers Recognize there is NO GROWTH?

Discuss this article @ the ECONOMICS TABLE inside the...

Singularity of the Dollar

Off the Keyboard of RE Follow us on Twitter @doomstead666...

Kurrency Kollapse: To Print or Not To Print?

Off the microphone of RE Follow us on Twitter @doomstead666...

SWISSIE CAPITULATION!

Off the microphone of RE Follow us on Twitter @doomstead666...

Of Heat Sinks & Debt Sinks: A Thermodynamic View of Money

Off the keyboard of RE Follow us on Twitter @doomstead666...

Merry Doomy Christmas

Off the keyboard of RE Follow us on Twitter @doomstead666...

Peak Customers: The Final Liquidation Sale

Off the keyboard of RE Follow us on Twitter @doomstead666...

Collapse Fiction
Useful Links
Technical Journals

West Africa is a very vulnerable part of the world to the impacts of climate change due to a combina [...]

Green areas induce smaller increases in the air temperature than built-up areas. They can offer a so [...]

The study of frequency analysis is important to find the most suitable model that could anticipate e [...]

Follow on our http://www.doomsteaddiner.net/forum/