This document discusses frameworks for evaluating infrastructure projects, including financial analysis, life-cycle cost analysis, cost-effectiveness analysis, multi-criteria analysis, and cost-benefit analysis. It then focuses on the triple bottom line analysis and sustainable return on investment analysis frameworks. These frameworks monetize environmental and social impacts along with financial impacts. The document provides an overview of the sustainable return on investment process and framework. It then presents two case studies where this framework was applied: a public transit project in Austin, Texas and a bus depot project in New York City. Automated software called AutoCASE was demonstrated that standardizes the complex cost-benefit and risk analysis for sustainable infrastructure projects.

1. Stephane Larocque –
Consulting Practice Leader,
Impact Infrastructure
A DECI SI ON MAKI NG
F RAMEWORK FOR
SUSTAI NAB L E
I NFRASTRUC TURE
DEV ELOPMENT
1 ST I NTERNATI ONAL
CONF ERENCE ON
T RANSPORT & HEALT H
July 7th, 2015

2. ECONOMIC EVALUATION OF
INFRASTRUCTURE PROJECTS
2

3. Financial Analysis (FA): An assessment of the impact of an option on the decision-making organization's own
financial costs and revenues.
Life-Cycle Cost Analysis(LCCA): A process for evaluating the total economic cost of an asset by analyzing initial costs
and discounted future expenditures, such as operations, maintenance, and repair over the service life of the asset.
Does not account for benefits.
Cost Effectiveness Analysis (CEA): An assessment of the costs of alternative options, which all achieve the same
objective. The costs need not be restricted to purely financial. The costs are framed as a ratio to a parameter.
Multi-Criteria Analysis (MCA): Establishes preferences between options by reference to an explicit set of objectives
that the decision-making body has identified, and for which it has established measurable criteria to assess the
extent to which the objectives have been achieved. Quantitative, not monetary.
Cost-Benefit Analysis (CBA): An assessment of alternative options, which quantifies in monetary terms as many of
the costs and benefits of a proposal as feasible, including items for which the market does not provide a satisfactory
measure of economic value.
COMMON TYPES OF FORMAL DECISION
FRAMEWORKS
3

4. TRIPLE BOTTOM LINE ANALYSIS
Triple Bottom Line Analysis promotes decision-making armed with
relevant information from a variety of PERSPECTIVES:
• Includes Financial, Social and Environmental Impacts;
• Considers costs and benefits based on multiple criteria;
• Addresses multiple, conflicting objectives;
• Provides clear, defensible, well-documented results;
• Identifies key risks; and
• Incorporates uncertainty in costs and benefits.
Sustainable development is typically defined as the pattern of development that
“meets the needs of the present without compromising the ability of future
generations to meet their own needs”
4

5. SUSTAINABLE RETURN ON INVESTMENT ANALYSIS
SROI combines best-practices in CBA, financial analysis, and LCCA
methodologies, augmented by:
• Accounting for uncertainty using state-of-the-art risk analysis
techniques
Economic Social Environmental
“Triple Bottom Line Business Case”
5

6. SROI FRAMEWORK OVERVIEW
6

7. SUSTAINABLE RETURN ON INVESTMENT (SROI):
TRIPLE BOTTOM LINE VALUATION FRAMEWORK
• Monetary valuation of Triple
Bottom Line
• Best economics methods
• Proven method in multiple
contexts
• Applicable for program,
project level decisions
• Accounts for Risk and
Uncertainty
Systematic process for calculating and comparing benefits and costs of a project to justify
an investment or compare projects. The SROI process accounts for a project’s triple
bottom line – its full range of financial, environmental, and social impacts.7

8. THE TRIPLE BOTTOM LINE FRAMEWORK
SROI adds to traditional financial analysis the monetized value of non-cash benefits and externalities
8

9. MONETIZING SOCIAL AND ENVIRONMENTAL IMPACTS
DATA SOURCES FOR SOCIAL COST OF CARBON (CO 2)
• Includes (but not limited to):
• Changes in net agricultural productivity;
• Human health impacts;
• Property damage from increased flood
risk; and
• The value of ecosystem services due to
climate change
• 163 peer-reviewed values of the Social
Cost of Carbon collected by HDR (1991-
2013)
• Range of values addresses the large
degree of uncertainty found within and
among CO2 estimation studies
9

10. MONETIZING SOCIAL AND ENVIRONMENTAL IMPACTS
SOCIAL COST OF GREEN HOUSE GASES
Greenhouse Gases
Expected
Mean Value
Probability
Distribution
$/Metric Ton
(2014 $)
Source
Carbon Dioxide Median $40.46 IWGSCC (2013)
CO2 Low $14.79 Nordhaus (2008)
High $118.94 Stern Review (2006)
Methane Median $849.60
CH4 Low $310.67
High $2,497.67
Nitrous Oxide Median $12,541.78
N20 Low $4,586.03
High $36,870.42
$49.26
$1,034.46
$15,270.60
10

11. Need to Automate & Standardize
11

12. THE SROI PROCESS IS COMPLEX
• Probabilistic Assessment: Establishing Ranges for Inputs and Produce Risk-Adjusted Outcomes
Monte Carlo Analysis: repeated random sampling to compute or iterate the project cost or
schedule many times using input values selected at random from the probability distributions of
possible costs or durations, to calculate a distribution of possible total project cost or outcomes.
12

13. CASE STUDY 1:
Capital Metro
Austin, Texas - USA
13

14. AUSTIN CAP METRO
ALTERNATIVES ANALYZED
14

15. AUSTIN CAPITAL METRO
IMPACTS MONETIZED
15

16. AUSTIN CAP METRO
RESULTS
16

17. FREE BUSINESS CASE EVALUATOR
EXCEL BASED AND FULLY DOCUMENTED
17

18. Introducing AutoCASE
18

19. CASE STUDY 2:
New York City Transit
New York, New York - USA
19

20. DEMO OF AUTOCASE MONETIZED TBL SOFTWARE
NEW YORK CITY TRANSIT CASE STUDY
20
NYCT Mother Clara Hale Bus Depot – Harlem, New York
•Comprehensive business case on the green roof and related features associated
with a $262 million bus depot
•Cloud based AutoCASE software used to evaluate the green roof
•Prove automated cost benefit and risk analysis as a substitute for expensive
custom studies
•Calculates present day financial + social + environmental returns in dollar
units allocated across five different stakeholders groups.
•This sustainable project was more expensive from a financial perspective,
however, the social and environmental benefits made up for that extra cost.