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Presented at the 4th Global Infrastructure Basel Summit 21 & 22 May 2014. Read more about the world leading platform for Sustainable Infrastructure Finance at www.gib-foundation.org. Next Summit: 27 & 28 May 2015 in Switzerland
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Defining and Measuring Performance for Sustainability in Infrastructure Development
Global Infrastructure Basel, 21 May 2014
Agenda
Main question
Performance based contracts take us some of the way but do we need to go further – challenging but necessary
Comments
• Performance based contracts
• Definitions – what should we mean by performance in sustainable infrastructure?
• Measurement for sustainability – what can, and/or should we measure?
• Challenges and opportunities
Notes: High level, abstract, stating the obvious
2
Performance based contracts - flexibility
Waste infrastructure solutions-Moving from recycling outcomes to carbon performance
-Can be met through variety of infrastructure solutions-High waste reuse + incineration + landfill-High recycling + landfill-Recycling + AD + gasification and fuel preparation
Waste infrastructure solutions-Moving from recycling outcomes to carbon performance
-Can be met through variety of infrastructure solutions-High waste reuse + incineration + landfill-High recycling + landfill-Recycling + AD + gasification and fuel preparation
Energy efficiency in buildings-Energy performance leading to payback and carbon outcomes
-Can be met through different technologies-Challenges in asset ownership/ leasing, financing and asset transfer
Energy efficiency in buildings-Energy performance leading to payback and carbon outcomes
-Can be met through different technologies-Challenges in asset ownership/ leasing, financing and asset transfer
Energy generation-Energy generation and carbon performance
-Can be met through different ways e.g. Combination of low carbon, renewable and fossil fuels
Energy generation-Energy generation and carbon performance
-Can be met through different ways e.g. Combination of low carbon, renewable and fossil fuels
Infrastructure that facilitates triple bottom line
Investor economic returns
GDP
Asset creation
Facilitation of wider economy
Investor economic returns
GDP
Asset creation
Facilitation of wider economy
Climate change mitigation/ adaptation
Natural resource consumption/ depletion
Pollution
Climate change mitigation/ adaptation
Natural resource consumption/ depletion
Pollution
Livelihoods protection/ creation
Skills creation
Empowerment/ choice/ opportunity
Health impacts
Livelihoods protection/ creation
Skills creation
Empowerment/ choice/ opportunity
Health impacts
EconomicEconomic EnvironmentalEnvironmental SocialSocial
Project level considerations
DevelopmentDevelopment ConstructionConstruction OperationOperation De-commission
De-commission
ConsiderationsConsiderations
EnergyWasteWater
BiodiversityMaterials
LivelihoodsTransparencyGovernance
etc.
EnergyWasteWater
BiodiversityMaterials
LivelihoodsTransparencyGovernance
etc.
Outcome based measurement – difficult.
National policy level e.g. National Green Accounts India proposal“Basis for economic evaluation should be comprehensive notion of wealth”:•Reproductive capital•Human capital•Natural capital
National policy level e.g. National Green Accounts India proposal“Basis for economic evaluation should be comprehensive notion of wealth”:•Reproductive capital•Human capital•Natural capital
Policy/ Project Levele.g. UK Green Book MethodologyAttempts to quantify and monetise different project benefits to generate a societal IRRExamples: Carbon reduction, job creation, etc.Example of considerations: displacement, leakage, additionality
Policy/ Project Levele.g. UK Green Book MethodologyAttempts to quantify and monetise different project benefits to generate a societal IRRExamples: Carbon reduction, job creation, etc.Example of considerations: displacement, leakage, additionality
Outcome Levele.g. Energy, Carbon and Cost reduction-Persistence factors-Technology replacement timings
Outcome Levele.g. Energy, Carbon and Cost reduction-Persistence factors-Technology replacement timings
Challenges and opportunities• Challenges
– Difficulty in measuring e.g. Natural capital. (value of one village pond will be different from another as depends on the context)
– Metrics not fully developed/ not widely known
– High resource capacity required to perform comprehensive measurements and monitoring
• Opportunities– Tools do exist to help – carbon and ecological footprinting;
ecosystem services valuation; social impact assessment tools
– Considerable opportunity to improve natural and human capital rather than ‘avoid or mitigate negative outcomes’ - public sector risk-sharing role can facilitate this
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