the Informal Sector, and the Spatial Structure of Cities Table 1.3 A Design Assessment Matrix

gram, has struggled with the challenge of assessing environmental eff ects during a multiyear eff ort to analyze and describe sustainable infrastructure projects in cities throughout Europe. After reviewing all the options for assessing impacts, the program experts chose a simple matrix to summarize key eff ects (table 1.3). The fi nal publication, Towards Sustainable Urban infrastructure: Assessment, Tools and Good Practice, describes 44 sustainable infrastructure projects and a matrix for each project (see Lahti 2006). The publication concludes that a holistic assessment of sustainability with many dimensions and numerous impacts requires a technique and tool capable of reviewing all relevant aspects in a compact space, that is, hopefully even in one page through a visually eff ective presentation.

Eco2 cities need a framework for evaluating the costs of projects that is suffi ciently fl exible to accommodate a wide range of measurements and, yet, is suffi ciently balanced to ensure that the trade-off s and impacts on critical thresholds and targets are well understood. The emphasis on integration at many levels means that a broad and balanced assessment is much more important than might otherwise be the case. Eco2 requires a framework that is designed to reveal not only who benefi ts and who pays specifi c costs, but also how well a project has maximized benefi ts of all types. The framework must be transparent, allowing a mix of professionals and residents to easily follow what is actually being measured, why it is being measured, and how the numbers relate. The framework needs to combine categories of benefi ts and costs so that they may be tracked as a whole and so that indicators on ecological health, for example, may be given equal consideration with indicators on economic wealth. Fortunately, many economists and communities have been experimenting with frameworks over the last 10 years, and it is now possible to learn from best practice and adopt a framework for accounting that is suitable for Eco2 cities.

Protection and enhancement of capital assets An appropriate method for use with Eco2 cities is the four-capitals approach outlined by Ekins, Dresner, and Dahlström (2008). The method

Table 1.3 A Design Assessment Matrix

ECOLOGY ECONOMY SOCIAL ASPECTS

Are emissions to air, water, and Are the cost-effectiveness and Have the planning and decision soil within the restrictions set cost-benefi ts of the system making for the infrasystem been locally and internationally? reasonable compared with other carried out in a democratic and Are emissions decreasing? systems? Are they reasonable participatory manner? compared with other needs in the city and to political goals? Is the use of natural resources Are citizens willing to pay for Are the function and reasonable relative to other, the services offered? Are the consequences of the system comparable systems? Is the services affordable for all transparent for and accepted use decreasing (for example, citizens? by citizens? Is the system fossil fuels, water, phosphorus, promoting responsible or potassium)? behavior by citizens? Is the system allowing a Are the organizations that Is the system safe for citizens reasonable level of fi nance, maintain, and operate to use (hazards, health, and biodiversity for the area the system effective? well-being)? studied? Is the biodiversity increasing? Is the system more or less Is the system more or less Is the system more or less ecologically sustainable than economically sustainable than a socially sustainable than a a conventional system? conventional system? conventional system?

Source: Based on Lahti (2006). Note: The matrix presented in the fi gure has been used in many case studies of sustainable infrastructure in Europe. It is intended to provide decision makers with instant and reliable insight into the sustainability of any design option. The arrows indicate performance in a sample project.

has evolved by combining a new approach to environmental economics, developed by David Pearce (2006), with a number of assessment tools that have been used in urban development. It is suffi ciently fl exible to include any type of measurement, and yet, it is well balanced. It has been successfully applied in a number of sustainable planning projects in Europe.

Most economic analysis incorporates an inventory and valuation of capital assets; however, the focus is primarily on manufactured goods and systems that produce or facilitate the delivery of goods and services. This kind of capital is referred to as manufactured capital and includes the hard infrastructure of cities.

The four capitals method begins by recognizing that benefi ts may fl ow from many sources other than manufactured capital. We need to account for the quality of labor (human capital), the networks through which labor is organized and that create the context for economic activity (social capital), and the natural resources and ecological systems that provide inputs into the economic process and maintain life on Earth (natural capital). A more detailed defi nition of these four capitals is provided by Ekins and Medhurst (2003):

1. Manufactured (or human-made) capital is traditional capital, that is, produced assets that are used to produce other goods and services. Examples are machines, tools, buildings, and infrastructure.

2. Natural capital includes, in addition to traditional natural resources (such as timber, water, energy, and mineral reserves), natural assets that are not easily valued monetarily, such as biodiversity, endangered species, and the ecological services provided by healthy ecosystems (for example, air and water fi ltration). Natural capital may be considered as components of nature that may be linked directly or indirectly to human welfare.

3. Social capital, like human capital, is related to human well-being, but on a societal, rather than individual, level. It consists of the social networks that support an effi cient, cohesive society and that facilitate social and intellectual interactions among society’s members. Social capital refers to those stocks of social trust, norms, and networks that people may draw upon to solve common problems and create social cohesion. Examples of social capital include neighborhood associations, civic organizations, and cooperatives. The political and legal structures that promote political stability, democracy, government effi ciency, and social justice (all of which are good for productivity, as well as desirable in themselves) are also part of social capital.

4. Human (cultural) capital generally refers to the health, well-being, and productive potential of individual people. Types of human capital include mental and physical health, education, motivation, and work skills. These elements not only contribute to a happy, healthy society, but also improve the opportunities for economic development through a productive workforce.

All four types of capital are defi ned and identifi ed through the fl ow of the benefi ts they provide. Sustainable development mostly revolves around the maintenance or increase of the four capitals so that the fl ow of benefi ts is sustained indefi nitely. Some trade-off s may be considered acceptable; for example, a reduction in the net area of ecological systems may be off set by increases in the net productivity of ecologies resulting from good design and management practices. However, many systems (such as ecologies) and assets require that critical thresholds be respected or the system will begin to break down. For example, smaller green spaces may be more productive, but they may fail to provide suffi cient habitat for some species, and as a result, biodiversity declines.

The four capitals method is a good choice for Eco2 cities for the following reasons:

1. It incorporates critical intangible assets into the decision-making framework.