Circles and Doughnuts: The local economy we need

Published as ‘Circular economy doesn’t go far enough’

Dr. Trevor Hancock

3 March 2021

700 words

Something good is happening: We are finally starting to question the economy and the way it works – or fails to work – for us and for nature, which sustains us.  A month ago I wrote a couple of columns about Doughnut economics, then took a bit of a diversion to explore the Dasgupta report on including in the economy the costs we impose on nature and – last week – the UN Secretary General’s observation that in waging war on nature we are suffering “towering economic losses”.

So what does this economic re-thinking mean at a local level, in the place where we live, learn, work, shop and play? How should we re-think and re-make our economy? Happily, various people and organisations are starting to think about this. Last week there was a front-page article in this newspaper by Lindsay Kines about the work of Project Zero to create a circular economy, with supportive resolutions adopted by both Victoria and Nanaimo councils.

A circular economy stands in contrast to our current linear ‘take-make-waste’ economy, in which we obtain resources, process and use them, then send the waste away, out there somewhere. Think of disposable plastic bags or coffee cups, or any number of other disposable products, up to and including your car and house. There are two big problems with this model, and both relate to nature, and the way nature works.

First, there is no ‘away’ in nature, our wastes end up somewhere and do harm to plants, animals and entire ecosystems. Moreover, only too often our wastes come back to haunt and harm us. Second, nature never discards anything, it all gets decomposed, recycled and re-used in some way, whereas we waste a lot of energy and resources by failing to close the loop.

A circular economy seeks to avoid these problems – greatly reducing both our wasteful use of scarce resources and our excessive production of wastes – by closing the loop. The UK-based Ellen MacArthur Foundation, a leading advocate for the circular economy, proposes three key principles: Design out waste and pollution, keep products and materials in use, and regenerate natural systems. This is underpinned by “designing products that can be ‘made to be made again’ and powering the system with renewable energy.”

It is a concept that has a lot of powerful support, including the World Economic Forum, which notes that businesses using this model gain a competitive edge because they “create more value from each unit of resource”, as Paul Shorthouse from Canada’s Circular Economy Leadership Coalition noted in a recent presentation to the Climate Caucus (a Canadian network of municipal leaders). The Coalition includes a number of large corporations, including Canadian Tire, Ikea, Loblaws, Unilever and Walmart.

But while the concept of the circular economy is undoubtedly useful and important, for me it does not go far enough. I find the Doughnut economy a more comprehensive and valuable model, for two reasons that are core to that model: First, it recognizes the ‘ecological ceiling’, the limits to growth imposed by the finite nature of the Earth.

Thus in an April 2019 essay in the Steady State Herald Herman Daly, the elder statesman of ecological economics, noted the circular economy is really a “recycling economy” and that it can only work if the economy “does not grow in scale beyond the regenerative and absorptive capacities of the containing biosphere” – the Earth.

A second reason is quite neatly summed up in a couple of pithy summaries of the two models. The Ellen MacArthur Foundation describes the circular economy as one “that is restorative and regenerative by design”, while Kate Raworth describes her Doughnut economics model as “distributive and regenerative”.

In other words, the Doughnut model recognizes that the implication of the ecological ceiling is that if the economy can’t grow beyond a certain size in terms of its impact on the Earth, then we can only meet everyone’s needs through redistribution. Thus it links the economy centrally to the social purpose of ensuring an equitable distribution of the goods and services that provide a social foundation for all.

Next week – finally, I hear you say – I will look at what a Doughnut Economy might mean at the local level.

© Trevor Hancock, 2021

thancock@uvic.ca

Dr. Trevor Hancock is a retired professor and senior scholar at the University of Victoria’s School of Public Health and Social Policy.

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