Influential Oxford economist Kate Raworth has warned that the recent surge in net-zero targets could create a disconnect between businesses and the living world, and the focus should instead be on setting net-positive strategies to build a restorative, regenerative economy.
Raworth spoke with edie at the inaugural Forum for Global Challenges event in Birmingham. Photo courtesy of Alistair Veryard
Speaking to edie at the Forum for Global Challenges event in Birmingham this week, Raworth – who coined the popular Doughnut Economics theory for sustainable development – said there is a real danger of net-zero becoming “just another piece of jargon” as many firms continue to operate based on linear, extractive business models.
“Nature doesn’t do ‘zero’,” Raworth said. “Nature is generous, it sequesters carbon, it creates cycles. The idea of aiming for ‘zero’ doesn’t connect us back with those living cycles of the world.
“The fact that a lot of the debates have become caught up in the concept of net-zero presents a real myopia in terms of understanding how we connect with the living world. I see net-zero as a passing point… We need to go past zero into an era of sequestration where we are drawing down far more carbon than the world is emitting.”
The Doughnut Economy
Raworth’s Doughnut Economics model is based on the premise that all economies must fall within the means of the planet. The inner ring of the doughnut represents the minimum standards required for a flourishing society, derived from the Sustainable Developments Goals (SDGs). The outer ring represents the ecological ceiling drawn up by earth-system scientists.
Between the two rings – the dough – is where governments and businesses should be operating, with the needs of people and the planet being met. But this is where economies that focus solely on net-zero principals will fall short, Raworth argues.
“If we come up with net-zero policies which actually degrade ecological diversity, then we’re not solving [the climate crisis] at all because we are not recognising the complexity and the holistic nature of our planetary boundaries,” she added.
“Businesses should aim to be net-positive, they should aim to be generous. I like to think in terms of generous design – we can build buildings that clean the air and put cleaner air back into our systems, we can create industrial systems that can put cleaner water back out, and we can build in ways that sequester carbon.”
At a government level, Raworth – who is a lead fellow at the Oxford University’s Environmental Change Institute – noted that the current invasion of Ukraine and the UK’s cost-of-living crisis “are signs that we need to transform the economic systems that we’ve created”.
“The fuel price crisis is a very strong signal that we should move even faster out of fossil fuels and towards renewable energy,” she said. “That shifts you towards low, stable, predicable prices from renewable energy, as opposed to being continually exposed to the variability of geopolitics of fossil fuel prices.”
And at a business level, Raworth stressed the need to ensure sustainability runs through every organisation’s hierarchy – from the owners and investors through to the board and staff.
“If you’re in a company that is owned and financed in ways that put quarterly reports and growth and extraction for the shareholders first, it’s extremely difficult to show that you’re going to be part of a regenerative and distributive future.
“Equally, if sustainability is buried in a department at mid-management level and it doesn’t have a voice on the board, that business is not fit for the future because the regenerative capacity of the living world has to have a voice at the governance table of every company.”
Economics is broken. It has failed to predict, let alone prevent, financial crises that have shaken the foundations of our societies. Its outdated theories have permitted a world in which extreme poverty persists while the wealth of the super-rich grows year on year. And its blind spots have led to policies that are degrading the living world on a scale that threatens all of our futures.
Can it be fixed?
In Doughnut Economics, Oxford academic Kate Raworth identifies seven critical ways in which mainstream economics has led us astray, and sets out a roadmap for bringing humanity into a sweet spot that meets the needs of all within the means of the planet. En route, she deconstructs the character of ‘rational economic man’ and explains what really makes us tick. She reveals how an obsession with equilibrium has left economists helpless when facing the boom and bust of the real-world economy. She highlights the dangers of ignoring the role of energy and nature’s resources – and the far-reaching implications for economic growth when we take them into account. And in the process, she creates a new, cutting-edge economic model that is fit for the 21st century – one in which a doughnut-shaped compass points the way to human progress.