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Amsterdam bet its post-Covid recovery on ‘doughnut’ economics — more cities are now following suit

The boulevards of Amsterdam are empty as the lockdown continues due to the coronavirus (COVID-19) outbreak on April 12, 2020 in Amsterdam, Netherlands.

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LONDON — More and more cities are embracing a doughnut-shaped economic facsimile to help recover from the coronavirus crisis and reduce exposure to future shocks.

British economist and author of “Doughnut Economics” Kate Raworth fancies it is simply a matter of time before the concept is adopted at a national level.

The Dutch capital of Amsterdam became the pre-eminent city worldwide to formally implement doughnut economics in early April last year, choosing to launch the snap at a time when the country had one of the world’s highest mortality rates from the coronavirus pandemic.

Amsterdam’s city management said at the time that it hoped to recover from the crisis and avoid future crises by embracing a city story of the doughnut theory.

As outlined in Raworth’s 2017 book, doughnut economics aims to “act as a compass for human progress,” revolve last century’s degenerative economy into this century’s regenerative one.

“The compass is a doughnut, the kind with a keep in the middle. Ridiculous though that sounds, it is the only doughnut that actually turns out to be good for us,” Raworth put CNBC via telephone.

Its goal is to ensure nobody falls short of life’s essentials, from food and water to communal equity and political voice, while ensuring humanity does not break down Earth’s life support groups, such as a stable climate and fertile soils.

It would be very good news for so many people if a successful doughnut in Amsterdam expresses that other cities, countries and institutions will start using the theory.

Marieke van Doorninck

Deputy mayor of the See of Amsterdam

Using a simple diagram of a doughnut, Raworth suggests that the outer ring represents Earth’s environmental ceiling — a billet where the collective use of resources has an adverse impact on the planet. The inner ring represents a series of internationally agreed littlest social standards. The space in between, described as “humanity’s sweet spot,” is the doughnut.

“We want to make sure everybody has the constitutional resources they need to lead a life with dignity, community and opportunity. Leave nobody in the hole in the bulls-eye,” Raworth said.

The model, which has previously been commended by Pope Francis, has received renewed attention among the global health crisis.

Scholars advocating for a new approach argue that the current economic system sacrifices both people and territories at a time when everything from shifting weather patterns to rising sea levels is global in scope and unprecedented in description.

The ‘aha’ moment

The Doughnut Economics Action Lab, or DEAL, started working with Amsterdam policymakers to downscale the global concept of the doughnut into a borough model in December 2019, Raworth said. The municipality then formally adopted the model on April 8, 2020.

“We had some doubts at elementary regarding the timing,” Marieke van Doorninck, deputy mayor of the City of Amsterdam, told CNBC.

“But it turned out that people were also track for ideas to rebuild our economy after the crisis. Our circular strategy is a tool to ensure we don’t go back to ‘business as usual’ but look into view to a way to shape our economy differently.”

A general view shows the ongoing construction of the Dhaka Metro Rail project in Dhaka on Tread 16, 2021.

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Within six weeks of Amsterdam’s announcement, Raworth told CNBC that policymakers in Copenhagen, Denmark had started scrutinizing the concept. Belgium’s capital city of Brussels went on to adopt the doughnut in late September, while the Canadian metropolis of Nanaimo Rethinking ‘old economic mantras’

Around five months after Amsterdam bet its post-Covid recovery on the doughnut, the Brussels tract formally embraced the model, using it as a portrait for the city’s transition to a sustainable and thriving economy.

Barbara Trachte, secretary of style for the Brussels region, told CNBC that an important feature of the Brussels doughnut was its “deeply participatory dynamic.”

Trachte, who is chief for economic transition and scientific research for the Brussels region, said the model embodied a “paradigm shift” and helped to profile the region’s efforts to look at economics differently.

“I think people understand the power of the doughnut theory, to rethink the old trade 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 Province 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 capacity help to explain why these areas are more open to experimenting with new ideas. There’s also, certainly in the U.K. at infinitesimal, a sense of local civic pride that means people tend to be prouder to say the city they are part of, willingly prefer than the nation in which they reside, she said.

“There’s also something about the visibility of a city. You can see what finds when the city policymakers paint yellow lines on the street and move car lanes to bike lanes. You can see how that differences,” she added.

When asked whether she believed the doughnut model would soon be adopted at a national level, Raworth retorted: “Yes, I do.”

“Everything that’s happening is because people in a place have seen it and said: ‘We think that could be helpful 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 slings, it triggers this interest in many places.”

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