Monetizing social impacts for use in LCABengt SteenChalmers University of Technology, Environmental System Analysis and CPM, Centre for Environmental Assessment of Products and Material Systems

Basic question Is it possible to monetize social impacts of

products with the same credibility as for environmental issues? Is it meaningful?

Is it true? Is it useful?

Content A framework Choice of indicators A long list of indicators Screening process to get a short list Three examples Conclusion

A framework

Choice of indicators What to include How to make trade-offs How to handle uncertainty

Choice of indicators

Degree of precaution

Strong

sustainability

Size of moral circle

Number of unique values & rights in trade-offs

Family, village

All living human beings

Very careful

Self All generations animals, plants

Weak

sustainability

A list of impact categories* Health and social well-being Quality of the living environment (liveability) Economic impacts and material well-being Cultural impacts Family and community impacts Institutional, legal, political and equity impacts Gender relations

* From van Schooten et al 2003

Indicators for Health and social well-being Death of self or a family member Death in the community Nutrition Actual physical health and fertility Perceived health Mental health Aspirations Autonomy Stigmatisation or deviance labelling Feelings in relation to the project

Quality of the living environment (liveability) Quality of the living environment (actual and perceived)

(Similar issues that is treated in environmental impact assessments)

Leisure and recreation opportunities and facilities Environmental amenity value/aesthetic quality Availability of housing facilities Physical quality of housing (actual and perceived) Social quality of housing (homeliness) Adequacy of physical infrastructure Adequacy and access to social infrastructure Personal safety and hazard exposure (actual and perceived) Crime and violence (actual and perceived)

Economic impacts and material well-being Workload Standard of living Economic prosperity and resilience Income Property values Employment Replacement costs of environmental functions (that was

formely provided by the environment, but now has to be paid for)

Economic dependency Burden of national debt (including intergenerational debts)

Cultural impacts Change in cultural values (moral rules, beliefs etc) Cultural affrontage (violation of sacred sites etc.) Cultural integrity Experience of being culturally marginalized Profanization of culture Loss of language or dialect Natural and cultural heritage (violation, damage or

destruction of)

Family and community impacts Alteration of family structure Obligations to living family members and ancestors Family violence Social networks Community identification and connection Community cohesion (actual and perceived) Social differentiation and inequity Social tension and violence

Institutional, legal, political and equity impacts Functioning of government agencies Integrity of government and government agencies Tenure or legal rights Subsidiarity (the principle that decisions should be

taken as close to the people as possible Human rights Participation in decision making Access to legal procedures and legal advice Impact equity

Gender relations Women’s physical integrity Personal autonomy of women Gender division of production-oriented labour Gender division of household labour Gender division of reproductive labour Gender-based control over, and access to resources Political emancipation of women

What to include in a short list Impact significance Relevance to products Known pathways Relevant for sustainable development, i.e.

Need oriented Development oriented Resource oriented

External costs and benefits

Impact significance-important issues of today Health and social well-

being Quality of the living

environment (liveability) Economic impacts and

material well-being Cultural impacts Family and community

impacts Institutional, legal, political

and equity impacts Gender relations

Poverty Employment Crime Equity (gender etc) War

Relevance to products Health and social well-being Quality of the living environment (liveability) Economic impacts and material well-being Cultural impacts Family and community impacts Institutional, legal, political and equity impacts Gender relations

Known pathways Health and social well-being Quality of the living environment (liveability) Economic impacts and material well-being Cultural impacts Family and community impacts Institutional, legal, political and equity impacts Gender relations

Social Environ-ment

Economy

Sustainable development

Relevant for sustainable development

SD = Increasing resilience

For example by:

•increasing capacity to peacefully resolve or transform conflicts

•Increasing the capacity to satisfy needs

•Wisdom (know what needs to be done)

•Skills (be able to do it)

•Empathy (be motivated to do it)

Key social sustainability values

Relevant for sustainable development Health and social well-being Quality of the living environment (liveability) Economic impacts and material well-being Cultural impacts Family and community impacts Institutional, legal, political and equity impacts Gender relations Wisdom Skills Empathy

Some problems in making a short list To include impacts that are many and small -

Rings on water Allocation problems Uncertainty Trade-offs

Short list for use of a Car Death in the community Actual physical health and fertility Availability of housing facilities Income Property values Employment

Short list for the use phase of a fridge (exl. Electricity production) Actual physical health and fertility Income Employment

Short list for a video (movie) Mental health Aspirations Crime and violence Income Employment Change in cultural

values Cultural integrity Profanization of culture

Natural and cultural heritage Social networks Community identifi-cation and connection Community cohesion Social tension and violence Wisdom Skills

Monetarisation options for use of a car

Death in the community OK accident statistics Actual physical health and fertility, Health OK, Availability of housing facilities, OK, via hedonic

price methods Income – from use costs x (1-dymanic factor) Property values - OK, via hedonic price methods Employment – workhours x employment value x

dynamic factor

Monetarisation options for the use phase of a fridge Actual physical health and fertility. Data from

health authorities + values from WTP Income – From use costs x(1- dynamic factor) Employment – From workhours in supply

chain + employment value x dynamic factor

Monetarisation options for a video (movie) Mental health - qualitatively Aspirations - qualitatively Crime and violence - qualitatively Income from costs x (1-dynamic factor) Employment – from workhours + employment value Change in cultural values - qualitatively Cultural integrity - qualitatively Profanization of culture - qualitatively Natural and cultural heritage - qualitatively Social networks - qualitatively Community identification and connection - qualitatively Community cohesion - qualitatively Social tension and violence - qualitatively Wisdom - qualitatively Skills - qualitatively

Global accounting estimates Income from economic activity: 100% Loan from future generations environment:

10-15% Basic physical consumption : 20-100% Social consumption:0 – 80%

Conclusions Social impacts have a significant monetary value For many social impacts it does not seem possible to

estimate their monetary value with an accuracy that fulfil normal demands and leads to general acceptance

Monetaristion of social impacts may be meaningful in engineering, but we need to develop the language to explain what is done

There is a need to develop the sustainability feature further in social impact assessment