Tool to Assess the Improvement of the Sustainability (TAIS)

By Angélique Lequai and Michel Buron
June 2013

The authors are a CDM Project Manager and the CEO of Kyoto Energy Pte Ltd, an Emission Reductions Project Developer and Aggregator based in Singapore. → See also:

This document aims at giving an overview of TAIS (Tool to Assess the Improvement of the Sustainability) which has been developed by KYOTOenergy in order to evaluate the impact on the sustainable development of the projects developed under the CDM scheme. This tool, based on the Multi-Attributive Utility Theory (MAUT), results in providing a Utility Value (between -1 for a negative impact to +1 for a positive impact) for the 3 criteria which are the pillars of the Sustainable development: Environment, Society, Economy. From this first assessment, the overall Utility of the project on the sustainable development is calculated.

The sustainability concept has first been set up in the Brundtland report, also called Our Common Future, which has been released in 1987 (United Nations, 1987). It defines the sustainable development as a development which “meets the needs and aspirations of the present without compromising the ability to meet those of the future” (Chap1, 49).

Sustainable development deals with environmental, social and economic stakes. The only international treaty aiming at coping with climate change, the Kyoto Protocol, states that one of the major goals of the Clean Development Mechanism (CDM) is to “assist parties not included in Annex 1 to achieve a sustainable development”, where parties not included in Annex 1 simply means developing countries which can be the host for a Project Activity. As a result, it is prominent to determine to what extent the sustainability has been improved in the host country.

That is why KYOTOenergy has developed a new Tool to Analyse the Impact of the Sustainability (hereafter referred to as TAIS). The paragraphs below aim at detailing how this tool has been constructed and how it can be used.

Parameters of the Environmental Criterion

Parameters of the Economic Criterion

Parameters of the Social Criterion

1 Hierarchic Structure of the Sustainability

Because the three criteria of the sustainable development (environmental, economic and social) cover a broad field, it has fist been decided to divide them into sub-criteria selected according to their relevance to the climate change. Hence, it makes the assessment process inherently multi-objective (Linkov, 2004). The sustainability-tree below corresponds to this division hierarchic organization used in TAIS.

Generally, assessment of sustainability found in literature goes until the sub-criteria stage. However, because KYOTOenergy ordered a more accurate quantification of the sustainability, a further step has been designed in order to take into account a wider range of elements. As a result, each sub-criterion has been divided into parameters. They have been specifically defined to assess quantitatively the improvement of the sustainability of the Project Activity carried out within the framework of the Clean Development Mechanism. The detail of the selected parameters of each of criterion is given on the side.

2 Multiple Attribute Utility Theory, Basis of TAIS

2.1 MAUT Theory

The MAUT stands for Multi-Attributive Utility Theory. It is generally used to analyze situations and to support decision making. This theory has been used in TAIS to give a value of the impact of the criteria/sub-criteria/parameters of the project activity regarding to the sustainability. This value obtained is called the Utility of these criteria/sub-criteria/parameters. The equation to calculate the utility (U) has been defined (Sutter, 2003) in the following way:

Where:

U is the overall Utility of the project,
P the project assessed,
w _c,i the weight of the criterion i,
u _c,i: the single utility of the criterion i (note: u_i[c_i(P)] can be noted u_c,i );
c_i the sustainability criterion.

In the purpose of the development of the tool to assess the sustainability of project within the CDM framework, the MAUT is always used to compare two projects: the baseline (business as usual) and the project activity.

2.2 Application of the MAUT in TAIS

TAIS uses a hierarchic structure allowing a subdivision of the criteria to be evaluated. It leads to an assessment as accurate as possible: the more parameters assessed, the most accurate is the utility value of the sub-criterion. Likewise, the more sub-criteria assessed, the most accurate is the utility value of the criterion. The above formula (1) is used to determine first the Utility value of the sub criteria, then the Utility value of the criteria which are both required to determine the overall Utility of the project.

To design such a tool, once the criteria/sub-criteria/parameters have been structured into the hierarchic model, the following steps have been followed.

Determination of an indicator for each parameter to directly compare the Project Activity and the Baseline. For example, it can be the ratio between the emissions of project activity compared to the ones of the baseline.
Determination of a Utility Function of each Parameter (U_p).
The utility function of a parameter depends on the selected indicator (for example: U_p (Indicator) = 1 -Indicator). It is designed to allocate a utility value which matches with reality through a continuous function. U_p is defined to be comprised between -1 (high decrease in sustainability) and 1 (high improvement in sustainability). The value 0 means that the project activity does not lead to any change regarding the sustainability.
Determination of the Weighting of each Parameter.
Each parameter is given a weight (W_p). It corresponds to the relative importance of this parameter compared to the other parameters defining the same sub-criterion. This weight should be between 0 and 1 (0% of importance to 100% of importance). The sum of all weights attributed to the parameters for one sub-criterion should be equal to 1. The weighting proposed in the MAUT has been set up with a survey carried out among CDM-professionals.
Determination of the utility value of the sub-criteria.
The utility value of a sub-criterion (U_sc) is defined as:
Where:
- np is the number of parameters of a sub-criterion;
- i corresponds to one parameter.
- w_p,i is the weight of the parameter i;
- u_p,i is the utility value of a parameter.
U_sc is also a value within the range [-1;1].
Weighting of each Sub-Criterion:
The weight of a sub-criterion (WSC) corresponds to the relative importance of this sub-criterion compared to the other sub-criteria defining the same criterion. This weight should be between 0 and 1 (0% of importance to 100% of importance). The sum of all the weights attributed to the sub-criteria for one criterion should be equal to 1.
Determination of the utility value of the criteria:
The utility value of a criterion (U_c) is defined as:
Where:
- n_sc is the number of sub-criteria within the criterion;
- i corresponds to one sub-criterion.
- w_sc,i is the weight of the sub-criterion i;
- U_sc,i is the utility value of a sub-criterion.
U_c is also a value within the range [-1;1].
Weighting value of each criterion:
The weight of a criterion (w_c) is the relative importance of this criterion compared to the other criteria defining the sustainability. This weight should be between 0 and 1 (0% of importance to 100% of importance). The sum of all the weights attributed to the sub-criteria should be equal to 1.
Determination of the utility value of the sustainability:
The overall utility value of the project on the sustainability (U_p) is based on the utility value of each criterion and their related weights ranging from 0 to 1. So the final utility value would be included in the interval [-1; 1], as determined in the formula (1).

The interpretation of the Utility value in TAIS is the following:
- If U_p = 0, the Project Activity has no negative impact on the sustainable development and is not improving the situation.
- If U_p < 0, the Project Activity has a negative impact on the sustainable development and therefore should be modified or eliminated.
- If U_p > 0, the Project Activity can be considered as contributing to the sustainable development. The highest, the best.
When a project activity is defined within the CDM framework, none of the first two options are expected to occur.

3 The Tool

A typical tab of the developed tool stands below. This example corresponds to the Employment sub-criterion, which belongs to the social criterion. It is defined according to two parameters, namely the quantification (number of short term and long term jobs created) and the qualification of the employment.

4 TAIS Outputs

One of the strength of TAIS is that this tool can be used for all types of projects (for example: biomass, cogeneration, hydropower plant, biogas…) whatever their location. As output, the contribution of one project to the sustainable development can then be compared from one project to another. Below are presented samples of TAIS assessments:

4.1 Hydro Power Plant

A Hydro Power Plant (HPP) implemented within the CDM framework is generally characterized by the following impacts:

Environmental impact

No release of any components in air and in water;
No emission of Green House Gases;
Small impact on the biodiversity which can be fixed by a good management of the plant;
Small impact on the soil and the land qualities: erosion of the soil, improvement of land of use.

Economic Impact

Can involve technologic innovations. There is a high degree of transfer of both equipment and knowledge;
Increase the Gross Domestic Product: positive impact on the local and national economies ;
A CDM-project always leads to an impressive increase in the IRR.

Social Impact

Jobs creation ;
Improvement of electricity supply ;
Improvement of local people’s standard of living;
Increase of the equality of gender and between rich and poor people;
Involvement of the stakeholders of the project through their participation.

The graph below provides an example of the result which has been found out for a HPP project in Vietnam:

From TAIS assessment, it can be derived that, assuming equal weighting among the 3 criteria, this HPP project positively contribute to the sustainable development (UP ~ + 48%). It can be found out that this assessment of the sustainability corresponds to the above characterization of HPP projects.

4.2 Co-Composting Project

Below is TAIS chart extracted from the PDD of “Solids separation of POME and co-composting project, Sabah” (UNFCCC, 2012) for which TAIS has been used in the description of the impact of the project on the Sustainable development. This above-mentioned project has been registered (and hence accepted) by UNFCCC.

4.3 Biomass Project

Below is TAIS chart applied to a biomass project (fuel displacement, methane avoidance) in a project located in Malaysia.

4.4 Cogeneration Project

The chart below is the result of TAIS assessment for a cogeneration project in Singapore.

5 Conclusion

Sustainable development is a concept difficult to quantitatively assess considering the wide range of aspects it is covering. TAIS gives a Utility value showing the contribution of a selected project to the sustainable development. This is a step forwards to a better assessment of projects for future development.

Going further, TAIS also allows the comparison between different projects even if their purpose (for example: electricity generation or waste water treatment), their type (example: hydropower plant or cogeneration) and their location is not the same.

United Nations have accepted the TAIS approach when a project which uses this tool for the assessment of the sustainability¹ has been registered. This emphasizes that this tool has been approved by a reliable organization representing 193 countries all over the world. TAIS is thus deemed to provide a reliable and relevant output for the sustainability assessment.

¹ Please refer to the PDD of the registered project: Solids separation of POME and co-composting project, Sabah, available on cdm.unfccc.int (last access: 13/11/2012)

References

Buron, M.; Abd Hashib, S.; Frappe, M.; Ghennam, E. (2007)
Sustainable Development and CDM projects in the Palm Oil Industry in Malaysia, KYOTOenergy
Available at: www.kyotoenergy.net
Accessed on the 12th of November 2012
DOE (1998)
Guidelines for Risk-Based Prioritization of DoE Activities
U.S. Department of Energy
DTI (2006)
Stakeholder consultation in CDM Projects
A Climate Change Project Office Guide, DTI
CDM Gold Standard (2006)
The Gold Standard – Manual for CDM developers
Global Environment Centre Foundation (2006)
CDM/JI Manual for project developers and Policy makers
Global Environment Centre Foundation (2007)
CDM/JI Manual for project developers and Policy makers
Kyoto Energy Pte. Ltd. (2009)
Project design document of BUPL gas based cogeneration (Singapore)
Available at: cdm.unfccc.int
Last access on the 12th of November 2012
Heuberger (2003)
CDM Projects under the Kyoto Protocol of the UNFCCC: A Methodology for Sustainable Development Assessment and an Application in South Africa – Swiss Federal Institute of Technology (ETH)
Available at: www.up.ethz.ch
Accessed on the 12th of November 2012
Heuberger, E.; Brent, A.; Santos, L.; Sutter, C. and Imboden, D. (2006)
CDM Projects under the Kyoto Protocol: A Methodology for Sustainability Assessment- Experiences from South Africa and Uruguay – Environment, Development and Sustainability (2007) 9: 33-48, ETH, Springer
Lincov, I.; Varshese, A.; Jamil, S.; Seager, T.P.; Kiker, G. and Bridges, T. (2004)
Multi-criteria decision analysis: a framework for structuring remedial decisions at contaminated sites – Comparative Risk Assessment and Decision Making – Kluwer Academic Publisher - p.15-54
Available at: books.google.co.uk
Accessed on the 12th of November 2012
Logan (2004)
Stakeholder Consultations, AXI
Available at: www.axi.ca
Accessed on the 12th of November 2012
Muong Sang Hydropower J.S.C (2008)
Report on Stakeholder Consultation for Muong Sang hydropower project Raymond Z. Renfro (2004) The Value of Participation in Development – Relevance to Soil and Water Conservation –, Capacity Building and Training, Asian Development Bank Institute
Available at: www.adbi.org
Accessed on the 12th of November 2012
Sutter (2003)
Sustainability check-up for CDM Projects: Multi-Criteria Assessment of Energy Related Projects under the Clean Development Mechanism of the Kyoto Protocol. Berlin, Wissenschaftlicher Verlag Berlin (ISBN: 3-936846-59-6), SDC
Available at: www.up.ethz.ch
Accessed on the 12th of November 2012
Thomas, F.; Ulrich, S. and Schlenzig, C. (2001)
Ranking Methodologies for Sustainable Development and CDM Project Checklists, Germany, Start-up Clean Development Mechanism in ACP Countries
Turcotte (1999)
Information Brief on the State Courts System’s Development of a Delphi-Based Weighted Caseload System – Report No. 98-46 - Office of Program Policy Analysis and Government Accountability - Florida
Available at: www.oppaga.state.fl.us
Accessed on the 12th of November 2012
UNFCCC (2008)
Kyoto Protocol
Available at: www.unfccc.int
Accessed on the 12th of November 2012
United Nations (1987)
Report of the World Commission on Environment and Development – Development and International economic Co-operation: Environment, United Nations
Available at: www.un-documents.net
Last access on the 12th of November 2012
Gold Standard (2006)
The Gold Standard – Manual for CDM project developers
Available at: www.cdmgoldstandard.org
Accessed on the 12th of November 2012
Yuji Mizuno (2012)
CDM in Charts, ver.20.0 – Institute for Global Environmental Strategies (IGES), Japanese Ministry of the Environment
Available at enviroscope.iges.or.jp
Last access on the 12th of November 2012
UNFCCC (2012)
Project 3693 : Solids separation of POME and cocomposting project, Sabah
Available at: cdm.unfccc.int
Last access on the 12th of November 2012
UNFCCC (2012)
Project 1186 : Biomass thermal energy plant – Hartalega Sdn.Bhd, Malaysia
Available at: cdm.unfccc.int
Last access on the 12th of November 2012

***