The wood for the trees?
How do we know whether a proposed project will be "sustainable" or not? Currently, most large projects undergo Environmental Impact Assessment (EIA) - usually something of an afterthought to mitigate the worst environmental impacts after the project concept has been agreed. "Concept Capture", explains Brian Adams, in separating tangibles from intangibles, clears a path.
The United Nations Environmental Programme (UNEP) defines sustainable development as “development that improves the quality of life of people living today without undermining or destroying the capacity of the earth to support future generations.”
How do we know whether a proposed project will be “sustainable” or not? Currently, most large projects undergo an Environmental Impact Assessment (EIA), but this is usually something of an afterthought to mitigate the worst environmental impacts after the project concept has been agreed. The project may still be unsustainable in that, although it may achieve its financial aims, it does more harm than good in its social and environmental effects.
Before attempting to answer the above question a few possibly controversial ideas are proposed:
- The first idea is that money is a very useful tool to achieve ends but not an end in itself.
- The second idea, derived from the first, is that standard of living and quality of life are separate concepts. The first is a tangible measure of consumption in monetary units (means) and the second is an intangible concept which cannot be measured in monetary units and, in practice, could be considered priceless (ends). It would not be controversial to say that standard of living and its increase world-wide is a threat to a sustainable future but quality of life is not.
- A third idea is that standard of living and quality of life are uncorrelated, i.e. it is possible to have a high standard of living and a low quality of life and vice-versa. This is another way of saying that consumption of goods beyond basic needs only brings temporary satisfaction. Lasting satisfaction comes from living and working in a pleasant social and physical environment.
Using the above ideas, it is assumed that the intangible benefits and disbenefits are the driving force of the project go/no go decision. The intangibles (equating to quality of life considerations) are scored using weighted human judgement.
Any disbenefits that can be mitigated by action of known monetary cost are eliminated from the intangible score and their cost is transferred to the costing phase to follow. The intangible scores are revised after costed mitigation measures (if any) have been considered. (Costed mitigation measures occupy the grey area between tangibles and intangibles. For instance, if a band of planted trees can eliminate the otherwise intangible loss of tranquility to many people caused by road traffic noise, then the cost of the trees becomes a costed mitigation measure.)
If the intangible score is positive the project is considered sustainable and goes ahead on the basis that the mitigation measures will be completed; if negative the project fails. If the project continues it now does so using conventional project procedures.
The technique might look like a return to decision by “the great and the good” that has dogged projects in the past. This is not the case; Concept Capture is different for several reasons:
- The “great and the good” always considered money and finance at the first stage. Hidden agendas were often involved. Concept Capture looks at intangibles first and reports openly on these.
- Initially, Concept Capture uses a “concept team” chosen for its knowledge of the intangible factors. These might be factors (depending on the project) such as landscape, heritage, tranquility, wildlife, employment, pollution, crime, congestion, etc. The team would be chosen by the project authorities involved and would be required to make their decision and scoring transparent to the authorities and the public.
Once the decision had been made and endorsed, a new team (if the project was cleared to “go”) would take over to follow the normal commercial project procedures.
Prepared to pay
Scoring systems for use in human judgement already exist. These tend to divide the intangible factors for each of the project solution concepts into manageable pieces and score them in terms of being “very significant”, “significant”, “slight”, “negligible” in a positive or negative sense against each agreed factor of the solution concept. The descriptives are given a numerical score and added towards a final score.
Economists, who are unhappy at the suggestion that money and standard of living do not necessarily create true satisfaction, have devised an alternative means of solving the valuation of intangibles. That is, not surprisingly, to attempt to value these concepts in monetary terms. This is called Contingent Valuation (CV) and involves asking people what they would be prepared to pay to maintain an intangible “good” or what they would be prepared to be compensated for losing it. This method has problems, not least of which is that any monetary answer can be obtained depending on the question asked and the constituency asked it. Another problem is that people questioned feel that they are being asked to pay for a benefit they take for granted, or, alternately, bribed to accept its removal.
Another objection to CV is that intangibles associated with quality of life can be shown historically to be equated with human freedoms and, therefore, to be priceless. Many people feel insulted by the notion of valuing them in monetary terms. Concept Capture overcomes the acknowledged problems of CV.
A small market town, at the junction of two main holiday routes, badly needs a bypass. The town is congested and polluted by traffic. Unfortunately, planning is complicated by rare water meadows to the north of the town and an AONB to the south.
After much debate two routes are contenders. One, Route A, puts a bypass through the water meadows at £X per mile. The other, Route B, puts a tunnel under the water meadows at £10X per mile. Because the tunnel is shorter than the bypass the cost of Route B is estimated at four times that of Route A.
Money is a tool
Using Concept Capture procedure, although Route A solves the towns congestion and pollution problems, this benefit is more than nullified by the desecration of the water meadows: its intangible score is negative. So the solution does more harm than good and is considered unsustainable.
Route B solves the congestion and pollution problem and saves the water meadows. It scores positively and is deemed sustainable. It is Route B that is approved, even though its cost is higher.
This simplified example is deliberately used to illustrate a project in which the optimum answer, using Concept Capture, costs more than the standard project calculated answer. It illustrates the point that money is a tool to achieve the right answer. An obvious question is: “Where is the money to come from?”
Firstly, the optimum answer is not necessarily the most expensive, as in this example. Secondly, the use of Concept Capture would cause many projects now accepted to be rejected, thus releasing money within the organisation using it.
Concept Capture achieves the difficult task of separating tangibles and intangibles in a project.
The finance for the project is considered to be a tool to achieve the real aims of the project, which are its intangible aims.
The benefit of this procedure is that it avoids nugatory work trying to put monetary value on intangible quality of life considerations.
Using Concept Capture it can be demonstrated that the project is sustainable according to the UNEP definition of sustainable development.
The aims of the project, both human and financial, are met.
If used on many projects, the goal of sustainable growth can be approached.