Amsterdam’s Financial Plan to Relaunch the Economy and Avoid Recession during the Coronavirus Crisis

THE Dutch city has announced that it will be adopting a ‘doughnut model’ to boost their economy and avoid recession during the coronavirus crisis. Originally created by economist Kate Raworth, this economic model proposes a drastic reduction in the use of resources and materials.

The doughnut model was first coined at Oxford University by economist Kate Raworth and will serve as Amsterdam’s guide to new policies which aim to avoid a recession and ensure the consumption of new materials be reduced by 50 per cent in the new decade.

The deputy mayor of Amsterdam, Marieke van Doorninck, presented this city plan on April 8 and outlined some of the measures that the city would be launching, such as, promoting products that last longer and allow for repairs, imposing measures on restaurants and hotels to donate the food they discard, creating ‘material passports’ that account for reusable materials in demolitions, or promoting sustainable materials in the construction sector.

“We have a system in which we incinerate the products we throw away, even though they contain valuable raw materials, labelling them as simple garbage,” van Doorninck explained. “Considering that in the world materials are limited and scarce, this is unforgivable,” she added.

However, the economic model behind these decisions is much more ambitious and includes an innovative way of calculating the wealth of societies by taking into account the interconnectedness of a globalised world and the physical limits of the planet.

“The idea that Amsterdam has committed to creating a fully circular economy by 2050 is fantastic,” explained economist Raworth in a debate on the Dutch network VPRO, “it is something totally new, so nobody knows yet what it means.”

The doughnut model which Raworth proposes is not a guide of concrete policies, but rather a way to analyse the economic system and utilise this to guide decisions.

The model is based on a very simple image: humanity must live inside a doughnut. In the hole are the basic needs for well-being: food, drinking water, housing, energy, health, gender equality, subsistence wages and political freedom. The outside hole represents the ecological ceiling and tipping points that scientists have identified as a threat to life on the planet, from the ozone layer to ocean acidification. The middle is what we would call well-being.

The doughnut analysis connects all the possible variables and looks further, relating this local problem to an international system. The doughnut theory, she explains, does not offer a concrete solution, but rather it offers a way of looking.

Written by

Laura Kemp

Originally from UK, Laura is based in Axarquia and is a writer for the Euro Weekly News covering news and features. Got a news story you want to share? Then get in touch at editorial@euroweeklynews.com.

Comments