IISD in the news

Decentralized Solar Power Plants Can Be Win-Win Strategy For Farmers, Local Communities, State Governments And DISCOMs

The implementation of decentralized solar plants under the government’s Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan (PM-KUSUM) program can boost farmer incomes, help India reach 50% of non-fossil power capacity by 2030, and improve the financial viability of distribution companies (DISCOMs), according to a new report launched today.

June 2, 2023

IISD in the news details

IISD in the news

States Must Define Standards to Overcome Challenges in Agrivoltaics: IISD

A recent report published by the International Institute for Sustainable Development (IISD) has listed specific business models that would help India cope with the challenges of implementing agrivoltaics.

June 2, 2023

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IISD in the news

Challenges, opportunities for agrivoltaics in India

A new study has evaluated the development of agrivoltaics in India, analyzing the challenges and opportunities involved in scaling up such projects, and exploring their potential for commercialization.

May 30, 2023

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Topic
Climate Change Mitigation
Energy
Region
India
Focus area
Climate
IISD in the news

IISD paper 'Agrivoltaics in India challenges and opportunities for scale-up' pushing for clean energy in agriculture

Even as the country is making consistent progress in generating clean renewable energy sources mainly solar energy to decrease dependence on fossil fuel laced energy, the use of solar energy in agriculture is much lower than the desired levels. Under the two of the three components of solarising the farm energy, the achievement is 2.17% and 1% only even after nearly four years of launching of the Pradhan Mantri Kisan Urja Suraksha Uthan Mahabhiyan (PM-KUSUM) scheme. The PM-KUKSM is meant to provide sources for irrigation and de-dieselising the agricultural sector by setting up solar pumps in agriculture sector.

May 30, 2023

IISD in the news details

Topic
Climate Change Mitigation
Energy
Region
India
Focus area
Climate
Report

Implementing Solar Irrigation Sustainably

A guidebook for state policy-makers on implementing decentralized solar power plants through PM-KUSUM Components A and C (feeder-level solarization) with maximum social, economic, and environmental benefits

The Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) scheme, launched in 2019 by the Ministry of New and Renewable Energy, aims to transform India's agriculture sector by improving crop productivity and increasing farm incomes through the solarization of the agriculture sector. This document forms the second part of a guidebook series, providing recommendations to state policy-makers on how they can implement solar irrigation models effectively and sustainably. This guidebook covers Component A and the subcomponent "Feeder-Level Solarization" under the Component C of PM-KUSUM. The previous guidebook addressed Component B and the subcomponent "Individual Pump Solarization" under Component C.

May 29, 2023
  • Solarizing agricultural feeders can benefit both farmers and power distribution companies.

  • Reducing risks associated with implementing and financing decentralized solar plants will be essential for its scale up.

  • States can use early deployments to study innovative approaches like agrivoltaics and direct benefit transfer incentives for farmers.

Solarizing irrigation has huge potential. Cost-effective and reliable irrigation can significantly improve farmer incomes and well-being. Shifting away from highly subsidized grid electricity can relieve financial pressure on electricity distribution companies—a review of tariff orders in 17 states and Union Territories found that 75% of all such subsidies go to agriculture. Furthermore, solar irrigation can help India shift to clean energy, reducing air pollution and greenhouse gas emissions. At the same time, care must be taken to implement it sustainably. There are complicated interconnections between water, energy, and food—often called the “water–energy–food nexus”—where interventions in one area can cause unexpected impacts in another.

This guidebook has been developed in cooperation with the Ministry of New and Renewable Energy. It is dedicated to supporting state policy-makers and agencies in sustainably implementing grid-connected solar power at a substation level, thereby “solarizing” the supply used by farmers connected to the substation. We refer to this as “decentralized solar power plants for irrigation,” which includes components A and C(FLS) of PM-KUSUM. Given the relative lack of experience with these models in India, we aim to bring together essential guidance on implementing them effectively. We also examine sustainability, identifying best practices for maximizing social outcomes and groundwater resources. Based on an initial needs assessment, this guidebook covers the following:

  1. Context: What are these models, and what are their potential impacts?
  2. Financing: What can states do to reduce the costs of financing?
  3. Implementation design and coordination: How can specific inter- and intra-departmental coordination mechanisms improve outcomes?
  4. Learning by doing: While states prioritize immediate deployment, how can they integrate pilots of innovative approaches for maximizing sustainability to inform ongoing improvements?

As a guidebook, this publication is based on the best available evidence, but it is not a research paper. We focus on practical suggestions for state policy-makers and implementing agencies with illustrative examples, drawing on a combination of secondary and primary research, including:

  • Reviews of existing policy research literature
  • 32 in-depth interviews with state and central officials, financiers, and policy experts
  • Case studies on state schemes in Maharashtra and Punjab (see Appendix)
  • A background paper on agrivoltaics based on literature review and stakeholder consultations (provided as a supplementary to this guidebook)
  • Various multistakeholder round tables with policy-makers and experts on solar irrigation

This guidance is focused only on components related to decentralized solar power plants for irrigation. It is intended to directly assist state policy-makers with implementing PM-KUSUM and be relevant for any solar irrigation scheme, including future policies once PM-KUSUM is completed. For guidance on other forms of solar irrigation—stand-alone and grid-connected pumps—see our separate guidebook Implementing Solar Irrigation Sustainably: A Guidebook for State Policy-Makers on Maximizing the Social and Environmental Benefits From Solar Pump Schemes, published in 2021.

Supported by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and funded by the German Federal Ministry for Economic Cooperation and Development (BMZ).

Supported by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and funded by the German Federal Ministry for Economic Cooperation and Development (BMZ)

Report details

Topic
Climate Change Mitigation
Energy
Food and Agriculture
Subsidies
Water
Region
India
Focus area
Climate
Resources
Economies
Publisher
IISD
Copyright
IISD, 2023
IISD in the news

Agrivoltaics In India : Simultaneous Use Of Land For Both Agriculture And RE Power Generation Offers A Potential Solution

Agrivoltaics — the simultaneous use of land for both agriculture and photovoltaic (PV) power generation — offers a potential solution to the competition for land resources between agriculture and renewable energy that may arise in the future in India.

May 26, 2023

IISD in the news details

IISD in the news

Agrivoltaics in India: Challenges and opportunities for scale-up

A new paper by Canada-based International Institute for Sustainable Development (IISD) and the Consumer Unity and Trust Society International (CUTS) finds promising results in pilot agrivoltaics projects across India. It also identifies key areas of opportunity for agrivoltaics, justifying future research and investment.

May 26, 2023

IISD in the news details

Topic
Climate Change Mitigation
Energy
Region
India
Focus area
Climate
IISD in the news

Trials Show No Negative Impact of Agrivoltaics on Crop Yield: Report

A latest report from think-tanks working in the renewable energy sector claimed that better-designed pilot projects had shown that there was no negative impact on the growth of crops grown under agrivoltaics. The new paper was jointly produced by Canada-based International Institute for Sustainable Development (IISD), Consumer Unity and Trust Society International (CUTS) and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. It was funded by the German Federal Ministry for Economic Cooperation and Development (BMZ).

May 25, 2023

IISD in the news details

Topic
Climate Change Mitigation
Energy
Region
India
Focus area
Climate
Deep Dive

The Road to Sustainable Transport Infrastructure: Why cost-benefit analyses need to integrate gender

Cost-benefit analyses (CBAs) are often the guiding principle for making decisions and investments in transport infrastructure. However, this approach rarely considers the fact that people of different genders use and experience transportation in a variety of ways. Illustrated using a case study in Coimbatore, India, this article explores why gender considerations should be included in transport infrastructure decisions and how they could be integrated into the CBA process.

May 22, 2023

Why Considering Gender Matters

Improved transport systems are key for advancing gender equality. Transport allows people to juggle busy lives, allowing them to move safely and efficiently from their homes to places of education, care, work, retail, health care, and community. Consequently, transport use is gendered: all genders use and experience transportation differently, owing to gender roles, biases, and discrimination, as well as cultural contexts.

Researchers have long documented how women use transportation differently. For example, women tend to have more complex mobility patterns than men, as women often undertake care work and household chores due to the gendered division of labour. Women are also more likely to walk and use public transport and have less access to resources for travel, such as time, private vehicles, or money. Additionally, women face concerns about personal safety and gender-based violence that influence their travel choices, often avoiding public transport or journeys after nightfall.

Despite the fact that women make up about half of the world’s population, their perspectives as transport users and workers, as well as transport infrastructure’s gendered impacts, are often overlooked in transport planning. While some cities have begun implementing gender-responsive transportation plans, this is not the mainstream approach, partly because women lack sufficient opportunities to weigh in on transport-related decisions.

The same applies when considering transport infrastructure investments. Investment choices for large infrastructure projects are usually made based on CBAs—a methodology that rarely accounts for the outcomes for people of different genders. Transport decisions often remain gender-blind, missing the opportunity for advancing gender equality or potential threats to groups already facing structural discrimination and marginalization.

Access to safe and efficient transport is crucial for sustainable development and advancing gender equality. As former United Nations Secretary-General Ban Ki-moon states in the Mobilizing Sustainable Transport for Development report:

Sustainable transport is fundamental to progress […] in achieving the 17 Sustainable Development Goals. Sustainable transport supports inclusive growth, job creation, poverty reduction, access to markets, the empowerment of women, and the well-being of persons with disabilities and other vulnerable groups.

- Analysis and Policy Recommendations from the United Nations Secretary-General's High-Level Advisory Group on Sustainable Transport

Currently, only half of the world’s population living in cities has good access to public transport options, and over 1 billion people are unable to reach an all-weather road from where they live. Providing people around the world with the transport they need to thrive will require massive investments over the coming years. The Global Infrastructure Hub estimates that USD 45 trillion will be needed by 2040 for roads and railways alone. For transport investment to fulfil its promise, gender must be better considered in the decision-making process.

Cost-Benefit Analyses and Gender: The early evidence

CBAs are commonly used to inform decisions about transport investments. They can help decision-makers identify the most cost-effective and beneficial transport options and are often legally mandated for large infrastructure projects. To conduct a CBA, transport planners start by defining the project’s scope, costs such as construction and maintenance, and benefits such as reduced travel time and increased safety. Planners then assign each cost and benefit a monetary value, compare the totals to determine whether a project is viable, and then recommend to decision-makers the most effective and efficient investment option.

Integrating gender considerations can help assess gender-specific benefits and adverse effects, providing a more accurate picture of how transport investments affect the diverse needs of all genders.

CBAs are one of many entry points for gender-responsive transport planning. Integrating gender considerations into CBAs can help assess gender-specific benefits and adverse effects while providing a more accurate picture of how transport investments affect the diverse needs of all genders.

Currently, CBAs for transport projects are mostly gender-blind and do not include gender considerations. Specific guidance is scarce, as most resources either discuss transportation’s gender considerations without explaining how project assessments can incorporate them, or these resources may propose improvements to the CBA methodology without paying specific attention to gender.

Work has begun in developing tools and guidance for better integrating gender in these assessments. The Global Infrastructure Hub has developed a free tool to conduct an integrated CBA of bus transport projects that specifically assesses gender impacts. It estimates the environmental, social, and economic outcomes of bus projects, helping stakeholders make more informed decisions in the early planning stages. Crucially, the tool can provide gender- and income-disaggregated results for transit time savings, auto travel time savings, and active transportation benefits from walking and cycling.

The main barrier to mainstreaming genders in CBAs is a prevailing lack of knowledge and evidence on how to do so, making it difficult for planners to make informed assumptions on gender impacts and their monetary values. A 2017 report from the United States Agency for International Development calls on organizations to provide learning resources for modellers, improve the data collection on the topic, and grant flexibility in how analyses capture gendered impacts.

However, it may not always be possible, at first, to integrate gender aspects into quantitative models and CBAs. Experts convened by the International Transport Forum underlined that CBAs are most useful for transport decision making when they deliver the information sought by decision-makers, draw on the best available local evidence, and transparently explain uncertainties and gaps in the analysis. When high-quality data on gendered impacts is lacking and cannot be accurately integrated into a CBA, presenting decision-makers with additional qualitative information on gender considerations is a better approach.

In Practice: Non-motorized transport in Coimbatore, India

Coimbatore has a population of 1.6 million people, making it the second-largest city in Tamil Nadu, India. It faces pressing transport challenges such as traffic congestion, long commutes, safety concerns, and air pollution. Walking and cycling comprise a small proportion of the transport mode shares, while most people use public transport and private vehicles. To address the challenges, the Coimbatore City Municipal Corporation has developed a 15-year Non-Motorized Transport (NMT) plan, which includes 300 km of walking and cycling routes across the city and aims to benefit one million people, especially women, the elderly, and low-income communities, and reduce CO2 emissions. The total investment costs of the NMT network amount to INR 9,895 million (about USD 121 million).

Using our Sustainable Asset Valuation (SAVi) methodology, we analyzed the NMT plan’s potential economic, social, and environmental outcomes. This integrated CBA shows that the NMT network in Coimbatore will provide efficient, safe, affordable, and convenient transport, and improve the last-mile connectivity to public transport. The greatest impact for the city will be the increased road safety, saving USD 395 million in costs from road accidents over the 23-year project period.

Figure 1 shows the net benefits, avoided costs, and added benefits of the NMT network.

Breakdown of NMT added benefits

Considering all added benefits and avoided costs, every dollar invested in this NMT network generates between USD 4.75 and USD 4.93 for society. This analysis, however, like most others, did not disaggregate the added benefits and avoided costs by gender.

Gender as Qualitative Dynamics in Systems Mapping

For the analysis, we first developed a causal loop diagram (CLD), which helps visualize the connections between the proposed NMT network and its effects on economic activity, as well as the social and environmental impacts. It is made up of many interconnected factors in the form of loops, and each loop visualizes cause-and-effect relationships that have either a positive (amplifying) effect or a negative (balancing) effect on the other, creating a feedback loop. A CLD enables us to identify the significance of each indicator and provides the basis for quantifying these with mathematical models, assigning them monetary values for an integrated cost-benefit analysis.

Figure 2 shows the CLD that was developed for the Coimbatore NMT network.

The CLD produced for the NMT network in Coimbatore

The CLD developed for the Coimbatore NMT case study, similar to many such systems maps, did not explicitly consider gender-specific indicators, though the project does have gender-specific dynamics. Incorporating these dynamics into systems mapping, such as a CLD, for transport infrastructure projects can serve as an initial and effective step to ensure that CBAs account for gender impacts.

Decreased Congestion Can Reduce Women’s Time Poverty

In Indian cities, women comprise only 18.5% of the formal labour force and spend about 10 times more time on unpaid domestic work than men. They often juggle multiple roles and responsibilities, leaving little time to pursue education, paid work, or personal development. In many cases, women forego job opportunities and favour home-based work due to inefficient transport options preventing them from combining work with caregiving responsibilities World Bank, 2022).

We can adjust the CLD to better reflect the link between congestion, women’s time poverty, and income. Investing in walking and cycling infrastructure increases the use of non-motorized transport modes, reducing the number of motorized vehicles and congestion. Less congestion lowers the time spent on transportation, helping address time poverty, and in turn enabling women to take up paid work and increase their income. This contributes to gender equality and women’s economic empowerment, while boosting GDP and unlocking additional funds for NMT investments.

Increased walking and cycling also helps revitalize local economies. In our CBA of the NMT network, we estimate that retail revenues could be boosted by USD 36 million and property values by USD 12 million. This could help foster mixed-use neighbourhoods that contain a variety of residential, commercial, cultural, institutional, or entertainment areas, allowing women to address all their needs locally, reducing time spent on transportation and thus opening up greater opportunities for pursuing paid work or education.

Figure 3 shows the causal loop for reducing women's time poverty.

Causal loop for decreasing women's time poverty

Improved NMT Can Increase Women’s Access to Education

Many low-income women in India struggle to afford fares for public transport and do not have access to private vehicles. Cultural norms also discourage women from cycling and walking in environments that are perceived as unsafe. Together, these factors considerably limit women’s mobility and access to education and economic opportunities. For example, female students in Delhi chose lower-ranked colleges than men to avoid unsafe travel routes, and 52% of women turned down education and work opportunities because of safety concerns.

For Coimbatore, a CLD feedback loop can be refined to consider how the NMT improves access to education, gender equality, and productivity. Investment in the project will increase the use of NMT modes (walking and cycling), boosting access to and participation in education, and resulting in increased productivity and GDP. This GDP growth, in turn, allows for further investment in NMT.  

Figure 4 shows the causal loop for improving women's access to education.

Causal loop for increasing women's access to education

Mobility Is Also Affected by Cultural and Societal Contexts for Women

Women use and experience transport differently based on their socio-economic status, ethnicity, caste, education, and age, as well as cultural and societal contexts. Therefore, transport projects should account for these varied contexts to address these diverse needs.

For example, one widespread threat to women in India is the high risk of gender-based violence and harassment in public spaces, with 56% of women reporting that they have been sexually harassed while using public transport. This violence and the fear of violence can lead women to avoid walking, cycling, and public transportation, especially after dark and in crowded situations.

The City of Coimbatore hopes that by investing in the new NMT network, walking and cycling will increase, transportation’s environmental impact will decrease, and women will have greater access to opportunities. However, the risks of gender-based violence and other societal and cultural factors could undermine the NMT network’s potential for improving women’s access to opportunities. To reap the full benefits of the new NMT infrastructure, it needs to be safe and culturally acceptable for women to use the new walking and cycling routes.

To a limited extent, gender-sensitive design and safety policies could increase women’s safety in public spaces and facilitate their access to the new NMT infrastructure. Some measures which have been taken in Indian cities and beyond to increase safety include improved lighting of paths and public transport, emergency response systems, and training for transport employees. However, systemic action is needed from policy-makers and society to tackle gender-based violence, change restrictive cultural norms, and ensure women’s fundamental human right of accessing public spaces.

To capture this gender-specific dynamic in the Coimbatore CLD, we can add a specific indicator about gender-based violence. The below figure shows that safety policies and gender-sensitive infrastructure design could reduce the risks of gender-based violence and improve women’s safety in public spaces, thus supporting women’s access to NMT.

Figure 5 shows how safety policies and gender-sensitive design can increase NMT use.

Causal loop for NMT use

Using Gender-Disaggregated Data in Quantitative Models

To assess the NMT network’s societal outcomes, we developed a mathematical systems model, building from the qualitative CLD. The Excel-based model quantifies and monetizes key indicators for the CBA—such as income creation, health impacts, and emissions—and, as with the CLD, can be refined further to reflect gender-disaggregated impacts.

This is important because the causal relationships for men and women may be the same, but the size of the impacts can differ by gender. For example, income influences the affordability of and demand for motorized transport modes for both men and women, but women in India often have less income and more complex journeys. This makes motorized transport less affordable for women, meaning that they rely more heavily on NMT and can benefit disproportionally from the improved infrastructure for NMT and public transport—a lesson that can be learned from other cities, such as Delhi.

Figure 6 shows the transport mode shares for all trips by gender in Delhi, based on Goel et al., 2022.

Pie chart showing the transport modes for men in New Delhi

 

Pie chart showing the transport modes for women in New Delhi

Gender-disaggregated data is still scarce in the transport sector, limiting the level of detail that mathematical models can achieve. Nonetheless, there are ways to refine the existing mathematical model to better capture gendered impacts related to employment, traffic safety, and health in Coimbatore.

Employment in the Transport Sector

Constructing and operating the NMT network in Coimbatore will create additional jobs and income of USD 1.7 million over 23 years. This value is small relative to the NMT plan’s other benefits, yet the mathematical model could use disaggregated data to capture the transport sector’s large gender gap in employment.

Even within the European Union, with relatively strong norms and guidance on gender equality, women make up just 22% of the transport workforce. The rate of female employment in construction in Asia is only 8%. The vast gender pay gap in India also means that women working in the informal construction sector earn 30% to 40% less than their male colleagues. Integrating such data into the mathematical models and CBA can demonstrate how, unless measures are taken to address these gender gaps, the employment benefits of investing in the NMT will disproportionately benefit men and fail to contribute to gender equality.

Traffic Safety

Avoided traffic accidents are the largest benefit from investing in Coimbatore’s NMT network, saving costs of USD 368 million over the project timeline according to our CBA. Men and women are affected differently by these accidents, which is why the mathematical model should use gender-disaggregated data. Men in India are about six times more likely to be killed or injured in road accidents, while women disproportionately bear the burden after accidents that affect family members, often taking up extra work and care for the injured. The model should aim to consider these gender-specific impacts on productivity and disposable income.

Health Benefits From Additional Physical Activity and Reduced Air Pollution

In India, 44% of women do not engage in sufficient physical activity to maintain their health, as compared to 25% of men. Potential reasons could be that women have fewer work-related trips, cycle less, and do less sports for leisure due to social norms, caste, gender, and socio-economic status.  

Improved conditions for NMT can enable greater mobility for women in Coimbatore, promoting increased walking and cycling, particularly for women who previously had limited exercise opportunities. To consider this impact, the mathematical model could use gender-disaggregated data for NMT users, additional physical activity, and impacts on health quality. This would allow for estimating the increased physical activity for men and women and the value of the related health benefits by gender.

Conclusion

Upcoming investments in transport infrastructure present an opportunity for decision-makers and stakeholders to advance gender equality. By focusing on enhancing safety, saving time, and improving women’s access to services and professional opportunities, these investments can have a transformative impact. Leveraging this opportunity requires careful consideration of gender contexts when making decisions about infrastructure investments. One effective approach is to develop more holistic CBAs that capture a systemic understanding of local gender dynamics.

In sum, transport planners and decision-makers can take three actions to better integrate gender in their CBAs. These recommendations are inspired by related research by the United States Agency for International Development that looked at CBAs more broadly.

  • Identify additional gender-specific aspects of transport projects. These dynamics can be mapped in a qualitative way in a CLD. For example, better conditions for walking and cycling can improve women's access to education, which benefits the entire economy.

  • Improve the collection of gender-disaggregated transport data and use it to refine the CBAs. For example, valuations should consider gender differences in transportation modes and travel patterns, disposable income, and employment by sector. Beyond CBAs, collecting gender-disaggregated data also enables evidence-based decisions on improving women's access to safe and secure transport.

  • Quantify and monetize the outcomes of transport investments on people of different genders. For example, job creation in male-dominated sectors such as transport can benefit men more than women and fail to advance gender equality unless additional policies encourage women’s employment. Conversely, reducing congestion can lead to increased income-generation potential for women by reducing time lost in traffic and improving access to job opportunities. Improving traffic safety can generate avoided costs, such as preventing damage to vehicles and infrastructure, and avoided health costs, resulting in greater income generation for women. Furthermore, promoting physical activity can generate specific health benefits for women, resulting in avoided health costs and potentially higher labour productivity and income.

Transportation is a complex topic, and CBAs are just one way to capture women's transportation experiences and needs. Transport planners and decision-makers should actively consider the gendered impacts of transport infrastructure, placing women’s needs as transport users at the core of planning decisions. Empowering women's active participation in the transport decision-making process is crucial. By adopting a gender-sensitive approach to transport planning, it is possible to advance gender equality, creating knock-on effects that benefit the economy, society, and the environment as a whole.

 

The author would like to thank Liesbeth Casier, Michail Kapetanakis, Benjamin Simmons, Marion Provencher Langlois, Ege TekinbasBecca Challis and Sofia Baliño for their work and advice on this article. 

Read the full SAVi Assessment of the NMT network in Coimbatore, India here.

Further reading: 

 

Insight

Uncovering the Value of Sustainable Transport Investments

A Case Study in Coimbatore, India

Using a case study in Coimbatore, India, IISD demonstrates the importance of recognizing, valuing, and reflecting the full economic, social and environmental benefits and costs of a transport project in infrastructure decision-making.

May 22, 2023

Coimbatore, like many other rapidly expanding cities in India, faces numerous transport challenges. With a growing population of 1.6 million residents, the city’s infrastructure has struggled to keep up and is almost completely reliant on motorized transport. This had led to high traffic volumes, congestion, long commuting times, road safety issues, and air pollution.

To address this, the Coimbatore City Municipal Corporation has developed an ambitious Non-Motorized Transport (NMT) plan: a 300 km network of bicycle and pedestrian lanes, constructed over a 15-year period. The citywide network is expected to sustain existing and future NMT demand while meeting sustainable, low-carbon mobility targets, encouraging the shift from private motorized transport to active modes such as walking and cycling.

As part of a new series of sustainable transport case studies, the International Institute for Sustainable Development (IISD) has prepared a comprehensive economic analysis of the NMT plan in Coimbatore over the next 23 years. We found that the project was not economically viable if valued using only conventional metrics, such as cash flows and revenue streams. Yet, when a wider range of economic, social, and environmental benefits and costs are factored in, the NMT project becomes clearly investment worthy, both from an economic and a societal perspective.

When a wider range of economic, social, and environmental benefits and costs are factored in, the NMT project becomes clearly investment worthy, both from an economic and a societal perspective

To undertake these broader integrated assessments, IISD has developed a Sustainable Asset Valuation (SAVi) methodology based on system dynamics modelling. This methodology allows us to evaluate projects more holistically, forecasting how different transportation infrastructure options can affect or be affected by economic, social, and environmental factors and assigning monetary and financial values to these impacts. Through these analyses, we aim to raise awareness about the impacts of a project over its life cycle, with the hope of transforming decision-making to support long-term, sustainable solutions. This is not an off-the-shelf assessment tool. Rather, the SAVi methodology invests in a transparent, co-developed and customized approach that actively engages key stakeholders, including policy makers, investors and planners, providing a fuller picture of transport projects and their knock-on effects for the community and landscape.

In our assessment of the Coimbatore NMT plan, we found that it would result in the community experiencing significant health benefits from increased physical activity and lower levels of air pollution. Moreover, it would lead to higher retail and property prices, and significantly reduced costs from road accidents. Other benefits from the NMT plan include decreased CO2 emissions, diminishing road maintenance costs, and reduced noise pollution. Notably, the largest benefits from the NMT were found to be socio-economic rather than environmental. In terms of size, the greatest positive impact from the shift to non-motorized transport is the avoided costs of traffic accidents, amounting to USD 395 million cumulatively over the twenty-three-year period. This is followed by the health benefits (USD 89.9 million) and the avoided costs of fuel use (USD 54.8 million).

Iceberg graphic of added benefits and avoided costs for NMT in Coimbatore

It is not only NMT projects where we see this play out. Assessments of other sustainable transportation projects around the world yield similar results. For instance, IISD is currently undertaking SAVi assessments of a Bus Rapid Transit (BRT) project in Bandung, Indonesia, and a Mass Rapid Transit (MRT) project in Bogotá, Colombia. Both projects produce a wide range of economic, social, and environmental benefits typically overlooked in a traditional cost-benefit analysis. In these cases, like in the Coimbatore NMT plan, the inclusion of the full range of benefits and costs yields a much higher return on investment, roughly 20 times higher for the BRT and four times higher for the MRT, and provides therefore a stronger rationale for greenlighting the projects.

These examples underscore the importance of recognizing, valuing, and reflecting the economic, social and environmental benefits and costs in economic and financial decision-making. Moreover, by considering the full range of benefits and costs in sustainable transportation projects, infrastructure decision makers can transcend the important but inherently narrow questions around economic viability and instead rightfully place the focus on the overall value to society and sustainable development.

Infrastructure decision makers can transcend the important but inherently narrow questions around economic viability and instead rightfully place the focus on the overall value to society

 

The SAVi report on the NMT network in Coimbatore, India, is available to read here. This article was originally created for the SLOCAT's blog series Towards a Gold Standard for Transport Investment.

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