Financing Resilient Infrastructure

Thursday, January 7, 2016

Most public finance professionals are carefully studying environmental and sustainability questions, but “getting it right” isn’t easy. Real-world, cost-first thinking means that prioritizing sustainability and resiliency in infrastructure will always be a challenge. Finance officers are generally accustomed to determining financial costs and benefits for capital projects rather than accounting for a project’s social and environmental impact. As a result, finance officers face hurdles when trying to measure factors such related to these issues, using common standards and metrics that are well understood by the public.

The traditional approach to addressing infrastructure cost is simple: Focus on immediate costs and build for the lowest price possible. This approach accounts for the financial constraints many communities face, but most organizations realize that it is short-sighted. As natural and economic shocks force governments to become more resilient, many are looking for ways to move their infrastructure projects beyond cost-only or cost-first thinking. This includes increased public involvement, which has become increasingly important over the past few decades – although quantifying its value to a large project remains challenging. How does a government determine the appropriate level of public involvement, or how citizen participation should be viewed when compared to other factors? Environmental impact mitigation often presents similar challenges, as well as emerging concerns about the social and economic effects of infrastructure projects of all sizes.

One government that has begun to address these issues is Lambton Shores, Ontario. The city has adopted the Envision Sustainable Infrastructure Rating System, pioneered by the Institute for Sustainable Infrastructure in conjunction with the Zofnass Program for Sustainable Infrastructure at Harvard University. The system is a free self-assessment tool that can help governments determine the social, environmental, economic, and public involvement effects of their infrastructure projects. It is simple in concept and can be used for projects of all types, sizes, and complexity. Professional training is also available. The system seeks to account for factors that have traditionally been classified as unquantifiable – for example, social impact (how a project might affect the social fabric of a community) is often either excluded from infrastructure project calculations or considered separately because it is so difficult to quantify. And when social impact has been included, the lack of universal standard makes its importance hard to gauge.

Large international infrastructure firms are learning about and implementing the Envision Sustainable Infrastructure Rating System, however, adding clarity and legitimacy to previously murky considerations. State and local governments are also starting to use this tool, including the Los Angeles County Department of Public Works, the New York City Water Agency, and jurisdictions in Florida, Illinois, Maine, Massachusetts, and Texas.

For more information on the Envision Sustainable Infrastructure Rating System, click here.

Related Training:

Related Publications:

Related Best Practices: