In praise of doughnuts: restoring the environment as a key dimension of inclusive growth

As the great and the good gather in Davos for the World Economic Forum Annual Meeting, you can be sure that there’ll be plenty of name checks for ‘inclusive growth’.

Commonly defined as enabling as many people as possible to contribute to and share in the benefits of economic growth (or words to that effect), it captures the need for governments and business to recast our model of growth to one that works better for everyone – spreading prosperity, opportunity and reward more fairly; treating tackling social inequality and driving up productivity as interconnected; and rethinking our account of economic progress so that we measure not only the rate of growth, but also the quality of that growth and people’s ‘lived experience’ of it.

Not much for me to argue with there, right? Well, no, except for the fact that I can’t help feeling an important part of the equation has been left out.

That nagging feeling was brought into sharp relief recently when a colleague shared a copy of a report by Morgan Stanley, entitled “Inclusive Growth Drivers: The Anatomy of a Corporation”. In laying out the ‘business case’ for inclusive growth, it states:

In the broadest sense, inclusive practices can promote business aims in two key ways:

  1. Improved Operating Environment: Inclusive growth creates more prosperous, secure, healthy and safe societies, which ultimately provide better operating environments for business and investment. Countries with higher levels of inclusive growth are more politically stable and typically have lower levels of social resentment and social unrest.
  2. Enhanced Consumer Purchasing Power: By folding historically neglected swaths of the population into a growing economy, inclusive growth expands the customer base available to businesses. That benefit is extended by the better health outcomes and longer life expectancies correlated with reduced inequality.

It’s the second point above that sticks most in the craw, given the rest of the document goes on to say the square root of bugger all in recognition of the obvious environmental consequences of lots of people living longer and buying more stuff.

On the evidence of most viewpoints I’ve read on inclusive growth, this is by no means atypical. Quite the contrary, it appears a very common trap to wax lyrical about reducing social inequality while (consciously or unconsciously) neglecting environmental considerations.

It’s an omission I find totally baffling, given the obvious correlation between poverty and environmental degradation. Wherever they occur around the world, climate shocks hit the poorest in society hardest and, unchecked, the World Bank has estimated that global temperature rises could result in an additional 100 million people living in poverty by 2030. Surely, then, it’s as plain as the nose on my face that action to protect and restore the environment has to feature more prominently in the prevailing narrative around inclusive growth?

The great challenge facing us as a society – so that broader narrative goes –  isn’t only ensuring that everyone has the opportunity to contribute to and benefit from economic growth; it’s also making sure, at the same time, that we don’t irreparably damage our planet’s life-supporting systems. In other words, it’s to generate growth that is both economically inclusive and environmentally sustainable.

This is precisely where Kate Raworth’s doughnut economics model – with its combined emphasis on raising social foundations, while not smashing through the ecological ceiling – runs rings (pun absolutely intended) round just about everything else I’ve seen and read on the topic of inclusive growth.

doughnut

If this model is new to you, it’s worth taking a moment to absorb the elegance of the metaphor. In the hole in the middle, we are living in a state of deprivation, with an insufficiency of the goods and services we need to lead a good life; beyond the outer ring, we are living beyond what the planet can support; it’s in between the two rings – in the doughnut itself – that we find the “safe and just space for humanity.”

It’s time to restore the environment to its rightful place amid all the talk around inclusive growth and the doughnut shows us how. (I always knew they were good for you!)

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2 thoughts on “In praise of doughnuts: restoring the environment as a key dimension of inclusive growth

  1. Allison Walker

    Great piece of analysis Dan – you are absolutely right. I’ve seen so many articles that focus solely on the social benefits of inclusive growth, side-lining the environmental consequences. Authors somehow forget that non-sustainable growth will feed social inequality through further environmental degradation in the most susceptible parts of our world – a situation of ever decreasing circles! Well done for highlighting this (plus I love the fact that someone is finally standing up for the doughnuts).

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  2. Dan Gray Post author

    Cheers Alli, Not for the first time (and certainly not the last) what we’re bemoaning is a lack of systems thinking. A friend shared another interesting perspective on this with me the other day: basically that the collapse in the global economy presented an existential threat to society and governments that has led to inclusive growth (in the narrower sense of reducing social inequality) being made the priority – even if that comes at a cost to the environment. Increasing inequality, rising uncertainty and fear of what the digital future will mean for people’s livelihoods represent the more clear and present danger in most people’s minds, and are easier for them to wrap their heads around than more challenging/abstract notions of rising seas, more severe environmental disasters etc. Much as I wish that weren’t so, I suspect he may be right in that assessment.

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