Why GDP Could Stand for Going to Destroy the Planet—We Need New Economic Measures for a Sustainable Economy

European banking and economy crisis as a cracked earth map piggy bank with bandages to repair a broken bank globe of Europe as financial austerity measures of Greece Italy Spain Portugal France.
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The following excerpt is from the new book Doughnut Economics: 7 Ways to Think Like a 21st Century Economist, by Kate Raworth (Chelsea Green Publishing, 2017)

Once a year, the leaders of the world’s most powerful countries meet to discuss the global economy. In 2014, for instance, they met in Brisbane, Australia, where they discussed global trade, infrastructure, jobs and financial reform, stroked koalas for the cameras, and then rallied behind one overriding ambition. ‘G20 leaders pledge to grow their economies by 2.1%’, trumpeted the global news headlines—adding that this was more ambitious than the 2.0 percent that they had initially intended to target.

How did it come to this? The G20’s pledge was announced just days after the Intergovernmental Panel on Climate Change warned that the world faces ‘severe, pervasive and irreversible’ damage from rising greenhouse gas emissions. But the summit’s Australian host, then–Prime Minister Tony Abbott, had been determined to stop the meeting’s agenda from being ‘cluttered’ by climate change and other issues that could distract from his top priority of economic growth, otherwise known as GDP growth. Measured as the market value of goods and services produced within a nation’s borders in a year, GDP (Gross Domestic Product) has long been used as the leading indicator of economic health. But in the context of today’s social and ecological crises, how can this single, narrow metric still command such international attention?

GDP growth: forwards and upwards. (Diagram by Marcia Mihotich)

To any ornithologist, the answer would be obvious: GDP is a cuckoo in the economic nest. And to understand why, you need to know a thing or two about cuckoos because they are wily birds. Rather than raise their own offspring, they surreptitiously lay their eggs in the unguarded nests of other birds. The unsuspecting foster parents dutifully incubate the interloper’s egg along with their own. But the cuckoo chick hatches early, kicks other eggs and young out of the nest, then emits rapid calls to mimic a nest full of hungry offspring. This takeover tactic works: the foster parents busily feed their oversized tenant as it grows absurdly large, bulging out of the tiny nest it has occupied. It’s a powerful warning to other birds: leave your nest unattended and it may well get hijacked.

It’s a warning to economics too: lose sight of your goals and something else may well slip into their place. And that’s exactly what has happened. In the twentieth century, economics lost the desire to articulate its goals: in their absence, the economic nest got hijacked by the cuckoo goal of GDP growth. It is high time for that cuckoo to fly the nest so that economics can reconnect with the purpose that it should be serving. So let’s evict that cuckoo and replace it with a clear goal for twenty-first-century economics, one that ensures prosperity for all within the means of our planet. In other words, get into the Doughnut, the sweet spot for humanity.

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First, to get our bearings, let’s put GDP growth aside and start afresh with a fundamental question: what enables human beings to thrive? A world in which every person can lead their life with dignity, opportunity and community—and we can all do so within the means of our life-giving planet. In other words, we need to get into the Doughnut. It’s the visual concept that I first drew in 2011 while working with Oxfam, and it is inspired by cutting-edge Earth-system science. Over the past five years, through conversations with scientists, activists, academics and policymakers, I have renewed and updated it to reflect the latest in both global development goals and scientific understanding. So let me introduce you to the one doughnut that might actually turn out to be good for us.

The Doughnut: a twenty-first-century compass. Between its social foundation of human well-being and ecological ceiling of planetary pressure lies the safe and just space for humanity. (Diagram by Christian Guthier)

What exactly is the Doughnut? Put simply, it’s a radically new compass for guiding humanity this century. And it points towards a future that can provide for every person’s needs while safeguarding the living world on which we all depend. Below the Doughnut’s social foundation lie shortfalls in human well-being, faced by those who lack life’s essentials such as food, education and housing. Beyond the ecological ceiling lies an overshoot of pressure on Earth’s life-giving systems, such as through climate change, ocean acidification and chemical pollution. But between these two sets of boundaries lies a sweet spot—shaped unmistakably like a doughnut—that is both an ecologically safe and socially just space for humanity. The twenty-­first-century task is an unprecedented one: to bring all of humanity into that safe and just space.

The Doughnut’s inner ring—its social foundation—sets out the basics of life on which no one should be left falling short. These twelve basics include sufficient food; clean water and decent sanitation; access to energy and clean cooking facilities; access to education and to healthcare; decent housing; a minimum income and decent work; and access to networks of information and to networks of social support. Furthermore, it calls for achieving these with gender equality, social equity, political voice, and peace and justice. Since 1948, international human rights norms and laws have sought to establish every person’s claim to the vast majority of these basics, no matter how much or how little money or power they have. Setting a target date to achieve all of them for every person alive may seem an extraordinary ambition, but it is now an official one. They are all included in the United Nation’s Sustainable Development Goals—agreed by 193 member countries in 2015—and the vast majority of these goals are to be achieved by 2030.

Since the mid-twentieth century, global economic development has already helped many millions of people worldwide escape deprivation. They have become the first generations in their families to lead long, healthy and educated lives, with enough food to eat, clean water to drink, electricity in their homes and money in their pockets—and, for many, this transformation has been accompanied by greater equality between women and men, and greater political voice. But global economic development has also fuelled a dramatic increase in humanity’s use of Earth’s resources, at first driven by the resource-intensive lifestyles of today’s high-income countries, and more recently redoubled by the rapid growth of the global middle class. It is an economic era that has come to be known as the Great Acceleration, thanks to its extraordinary surge in human activity. Between 1950 and 2010, the global population almost trebled in size, and World GDP increased sevenfold. Worldwide, freshwater use more than trebled, energy use increased fourfold, and fertiliser use rose over tenfold.

The effects of this dramatic intensification of human activity are clearly visible in an array of indicators that monitor Earth’s living systems. Since 1950, there has been an accompanying surge in ecological impacts, from the build-up of greenhouse gases in the atmosphere to ocean acidification and biodiversity loss.24 ‘It is difficult to overestimate the scale and speed of change,’ says Will Steffen, the scientist who led the study documenting these trends. ‘In a single lifetime humanity has become a planetary-scale geological force … This is a new phenomenon and indicates that humanity has a new responsibility at a global level for the planet.’

This Great Acceleration in human activity has clearly put our planet under pressure. But just how much pressure can it take before the very life-giving systems that sustain us start to break down? In other words, what determines the Doughnut’s ecological ceiling? To answer that question, we have to look back over the past 100,000 years of life on Earth. For almost all of that time—as early humans trekked out of Africa and blazed a trail across continents—Earth’s average temperature spiked up and down. But during just the last 12,000 years or so, it has been warmer, and far more stable too. This recent period of Earth’s history is known as the Holocene. And it is a word well worth knowing because it has given us the best home we’ve ever had.

Home sweet home in the Holocene. The graph shows Earth’s changing temperature over the past 100,000 years, based on data from the Greenland ice core. The last 12,000 years have been unusually stable. (Diagram by Marcia Mihotich)

Agriculture was invented on many continents simultaneously during the Holocene and scientists believe that this was no coincidence. The newfound stability of Earth’s climate made it possible for the descendants of hunter gatherers to settle down and live by the seasons: anticipating the rains, selecting and planting seeds, and reaping the harvest. It is likewise no coincidence that all great human civilisations—from the Indus Valley, Ancient Egypt and Shang Dynasty China to the Mayans, Greeks and Romans—emerged and flourished in this geological epoch. It is the only known phase of our planet’s history in which billions of human beings can thrive.

More extraordinarily, scientists suggest that, if undisturbed, the Holocene’s benevolent conditions would be likely to continue for another 50,000 years due to the unusually circular orbit that Earth is currently making of the sun—a phenomenon so rare that it last happened 400,000 years ago. This is certainly something to sit back and ponder. Here we are on the only known living planet, born into its most hospitable era which, thanks to the odd way we happen to be circling the sun right now, is set to run and run. We would have to be crazy to kick ourselves out of the Holocene’s sweet spot, but that is, of course, exactly what we have been doing. Our growing pressure on the planet has turned us, humanity, into the single biggest driver of planetary change. Thanks to the scale of our impact, we have now left behind the Holocene and entered uncharted territory, known as the Anthropocene: the first geological epoch that is shaped by human activity. What will it take, now that we are in the Anthropocene, to sustain the benevolent conditions that we knew in our Holocene home: its stable climate, ample fresh water, thriving biodiversity, and healthy oceans?

In 2009, an international group of Earth-system scientists, led by Johan Rockström and Will Steffen, took on this question and identified nine critical processes—such as the climate system and the freshwater cycle—that, together, regulate Earth’s ability to maintain Holocene-like conditions (all nine are described more fully in the Appendix). For each of these nine processes, they asked how much pressure it can take before the stability that has allowed humanity to thrive for thousands of years is put in jeopardy, tipping Earth into an unknown state in which novel and unexpected changes are likely to happen. The catch, of course, is that it is not possible to pinpoint exactly where danger lies and, given that many of the shifts could be irreversible, we’d be wise not to find out the hard way. So the scientists proposed a set of nine boundaries, like guard-rails, where they believe each danger zone begins—equivalent to placing warning signs upstream of a river’s treacherous but hidden waterfalls.

What do those warning signs say? To avoid dangerous climate change, for example, keep the concentration of carbon dioxide in the atmosphere below 350 parts per million (ppm). In terms of limiting land conversion, ensure that at least 75 percent of once-forested land remains forested. And when it comes to using chemical fertilisers, add at most 62 million tonnes of nitrogen and 6 million tonnes of phosphorus to Earth’s soils each year. There are, of course, many uncertainties behind these top-level numbers—including questions about the regional implications of such global limits—and the science is continually evolving. But in essence, the nine planetary boundaries create the best picture we have yet seen of what it will take to hang on to the home-sweet-home of the Holocene, but to do so in the human-­dominated age of the Anthropocene. And it is these nine planetary boundaries that define the Doughnut’s ecological ceiling: the limits beyond which we should put no further pressure on the planet if we want to safeguard the stability of our home.

Together, the social foundation of human rights and the ecological ceiling of planetary boundaries create the inner and outer boundaries of the Doughnut. And they are, of course, deeply interconnected. If you are itching to pick up a pen and start drawing arrows on the Doughnut to explore how each of the boundaries might affect the others, you’ve got the idea—and the Doughnut will soon start to look more like a bowl of spaghetti.

Take, for example, what happens when hillsides are deforested. Land conversion of this kind is likely to accelerate biodiversity loss, weaken the freshwater cycle, and exacerbate climate change—and these impacts, in turn, put increased stress on remaining forests. Furthermore, the loss of forests and secure water supplies may leave local communities more vulnerable to outbreaks of disease and to lower food production, resulting in children dropping out of school. And when kids drop out of school, poverty in all its forms can have knock-on effects for generations.

Knock-on effects can, of course, be positively reinforcing too. Reforesting hillsides tends to enrich biodiversity, increase soil fertility and water retention, and help sequester carbon dioxide. And the benefits for local communities may be many: more diverse forest food and fibre to harvest; greater security of water supply; improved nutrition and health; and more resilient livelihoods. It may be tempting, for simplicity’s sake, to seek to devise policies addressing each one of the planetary and social boundaries in turn, but that simply won’t work: their interconnectedness demands that they each be understood as part of a complex socio-­ecological system and hence be addressed within a greater whole.

Focusing on these many interconnections across the Doughnut, it becomes clear that human thriving depends upon planetary thriving. Growing sufficient, nutritious food for all requires healthy, nutrient-rich soils, ample fresh water, biodiverse crops and a stable climate. Ensuring clean, safe water to drink depends upon the local-to-global hydrological cycle generating plentiful rainfall and continually recharging Earth’s rivers and aquifers. Having clean air to breathe means halting emissions of toxic particulates that create lung-choking smog. We like to feel the warmth of the sun on our backs but only if we are protected from its ultraviolet radiation by the ozone layer and only if greenhouse gases in the atmosphere are not turning the sun’s warmth into catastrophic global warming.