If the planetary boundaries set a ceiling and human needs set a floor, the obvious question is what kind of economy fits between them. Two models answer it: the doughnut, which draws the space, and the circular economy, which redesigns the flows inside it.
📘 What you need to know
The doughnut economics model builds an economy that meets everyone’s needs within the planet’s ecological limits.
Its inner ring is the social foundation, based on the social SDGs — minimum standards for human wellbeing.
Its outer ring is the ecological ceiling, based on planetary boundaries science.
The space between is the safe and just space for humanity.
A regenerative economy restores and renews resources. A distributive economy shares value and opportunity equitably.
The circular economy has three principles: eliminate waste and pollution, circulate products and materials, regenerate nature.
The butterfly diagram (Ellen MacArthur Foundation) shows the biological and technical cycles, contrasting with the linear take–make–waste model.
Doughnut economics
The doughnut economics model provides a framework for building an economy that meets the needs of all people while staying within the ecological limits of the planet. It emphasises creating an economy that is regenerative and distributive.
The model’s instruction is simply “move into the doughnut”: lift everyone above the social foundation without pushing past the ecological ceiling.
Regenerative and distributive design
What it means
Example
Regenerative economy
Works within the natural cycles and limits of the planet, aiming to restore and renew resources rather than deplete them
Transitioning from fossil fuels to renewable sources such as solar and wind
Distributive economy
Shares value and opportunities more equitably among all stakeholders, reducing inequality
Policies such as universal basic income providing economic security for all citizens
The two boundaries
The social foundation is the inner ring. It is based on the social SDGs and represents the minimum standards for human wellbeing — access to education, healthcare and social protection, and things like clean water and sanitation for everyone.
The ecological ceiling is the outer ring. It is based on planetary boundaries science and represents the limits of Earth’s ecosystems and resources — for instance conserving water to prevent depletion of freshwater supplies.
Together they represent the minimum conditions for an economy that is ecologically safe and socially just, which is why the middle of the doughnut is called the safe and just space for humanity.
Moving into the doughnut
Today, billions of people still fall short of the social foundation, while humanity has collectively overshot most of the planetary boundaries — we have broken through the ecological ceiling. The objective is therefore to “move into the doughnut” and establish an economy that lets all societies prosper in harmony with the living world. Making economies regenerative and distributive by design is the only way to achieve it, which requires drastic change beginning with policies and practices that promote sustainability and equity.
Uses of the doughnut model
Limitations of the doughnut model
Supports environmental justice by including both ecological and social elements
Lacks specificity: broad principles but little detailed guidance on policy, and critics call it too theoretical
Raises awareness, having reached popular attention and highlighting how social and environmental issues connect
Challenges in application: translating it into effective local or national strategies is complex
Applied at various scales, from countries to cities to individual businesses
Changing nature: the boundaries may need adjusting as understanding evolves and new data emerges
Promotes interdisciplinary collaboration between economists, environmentalists, policymakers and communities
You need to be able to clearly outline the social foundation and the ecological ceiling, and to define regenerative and distributive in an economic context. The easiest way to remember which ring is which: the social foundation is a floor you must not fall below, so it is on the inside; the ecological ceiling is a limit you must not rise above, so it is on the outside.
The circular economy
The circular economy model is a sustainable economic system designed to minimise waste and maximise resource efficiency. It aims to decouple economic growth from the consumption of finite resources.
The Ellen MacArthur Foundation’s butterfly diagram shows these two cycles as the wings either side of the production chain.
The three principles
Eliminating waste and pollution. Reducing waste generation and minimising pollution, redesigning products and processes to eliminate waste at source. Example: designing products from biodegradable materials to cut landfill waste.
Circulating products and materials. Keeping products, components and materials at their highest utility and value for as long as possible through reuse, repair, remanufacturing and recycling. Example: furniture companies offering repair services to extend product lifespan.
Regenerating nature. Restoring and enhancing natural capital while promoting economic growth, through reforestation, sustainable agriculture and ecosystem restoration. Example: regenerative agriculture techniques that improve soil health and biodiversity.
The butterfly diagram
The Ellen MacArthur Foundation introduced the butterfly diagram to represent the circular economy visually. It contrasts with the linear model (take–make–waste) by showing a continuous flow of resources. Within the circular economy there are two cycles:
The biological cycle, where biodegradable products are returned to the natural environment.
The technical cycle, where products are recycled, reused, repaired or remanufactured.
Uses of the circular economy
Limitations of the circular economy
Regeneration of natural systems, supporting ecosystem restoration and biodiversity conservation
Lack of environmental awareness among consumers and companies about why circular practices matter
Reduction of greenhouse gas emissions through energy efficiency and renewable resources
Lack of regulation enforcing or incentivising recycling
Improved local food networks and support for local communities through sustainable agriculture
Some waste is not recyclable for technical reasons, such as mixed-material packaging that cannot be separated
Reduced waste by extending product life cycles through durability, repairability and recyclability
Lack of finance, with high upfront costs for transitioning, especially for small businesses
Changed consumer habits, encouraging mindful consumption and responsible choices
Worked examples
WE 1
The doughnut’s two rings
Outline the social foundation and ecological ceiling of the doughnut economics model. (4 marks)
The social foundation
The inner ring, based on the social SDGs. It represents the minimum standards for human wellbeing, including access to education, healthcare, social protection, clean water and sanitation.
The ecological ceiling
The outer ring, based on planetary boundaries science. It represents the limits of Earth’s ecosystems and resources, such as sustainable freshwater use.
The space between
Together they set the minimum conditions for an economy that is ecologically safe and socially just — the “safe and just space for humanity”.
Where we are now
Billions still fall short of the social foundation while humanity has overshot most of the planetary boundaries.
A floor for people, a ceiling for the planet, and a safe space in betweennaming the SDGs and planetary boundaries as the two sources earns credit
WE 2
Linear against circular
Compare the linear and circular economic models. (4 marks)
The linear model
Follows take–make–waste: resources are extracted, made into products, used, then discarded, so material leaves the system permanently.
The circular model
Designed to minimise waste and maximise resource efficiency, keeping products, components and materials at their highest utility and value for as long as possible.
How it does this
Through two cycles: the biological cycle returning biodegradable products to the environment, and the technical cycle recycling, reusing, repairing and remanufacturing.
The underlying aim
The circular model seeks to decouple economic growth from the consumption of finite resources, which the linear model cannot do.
One consumes resources once; the other keeps them in circulation“decouple growth from finite resource consumption” is the key phrase
WE 3
Evaluating the doughnut
Evaluate the doughnut economics model. (4 marks)
Strength 1: it covers both dimensions
By including ecological and social elements it supports environmental justice, addressing the main gap in the planetary boundaries model.
Strength 2: reach and flexibility
It has reached popular awareness and can be applied at various scales, from countries to cities to individual businesses, encouraging interdisciplinary collaboration.
Limitation 1: lack of specificity
It offers broad principles but little detailed guidance on the policies needed to implement it, and critics call it too theoretical.
Limitation 2: application and change
Translating it into effective local or national strategies is complex, and its boundaries may need adjusting as understanding evolves.
The best framing of the problem currently available, but not yet a set of instructionscontrasting it with planetary boundaries shows you understand why it exists
💡 Exam tips
Be able to draw and label the doughnut with both rings named correctly.
Know where each ring comes from: social SDGs inside, planetary boundaries outside.
Define regenerative and distributive precisely, with an example each.
Learn the circular economy’s three principles in order.
Name the two cycles in the butterfly diagram and credit the Ellen MacArthur Foundation.
Use take–make–waste as your shorthand for the linear economy.
⚠ Common mistakes
Swapping the two rings. Social foundation is inside; ecological ceiling is outside.
Confusing regenerative with distributive. One is about restoring resources, the other about sharing them.
Treating the circular economy as just recycling. Recycling is one option in one of the three principles.
Forgetting the biological cycle. The butterfly diagram has two wings, not one.
Claiming a circular economy is fully achievable. Some materials cannot be recycled for technical reasons.
Giving only strengths for the doughnut. It lacks specificity, and that is a valid criticism.
That completes 1.3 Sustainability. Seven notes tracing one argument: sustainability needs a definition, a development pathway, a fair distribution, measurable indicators, data to feed them, ecological limits to respect, and finally an economic model built to fit inside those limits. Up next is Topic 2: Ecology, where you start applying all of it to real ecosystems.
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