SRDTOOLS: Methods and tools for evaluating the impact of cohesion policies on sustainable regional development

Sustainable Development Defined Using the 'Four Capitals' Model: The research uses the Four Captials Model as a starting point. The Four Capitals Model is an extention of the three (economic, social and environmental) pillars of sustainable development. In the Four Capitals Model, the issues relating to individuals (such as their education and health, skills, innovation, and entrepreneurship) are separated from the economic and social pillars. This allows the economic pillar to be defined in relation to human made assets (such as buildings, infrastructure, and businesses) and the social pillar to be defined in relation to inter-relationships between individuals (in the context of local or informal networks; formal institutions of government; and governance networks). The environment pillar is unchanged. The four types of capital that sustain well-being are: manufactured capital; natural capital; social capital; human capital. 

Trade-offs: The Substitution Between Capitals Distinguishing the different types of capital raises the question of whether it is the total stock of capital that must be maintained, with substitution allowed between the various forms (weak sustainability) or whether, below certain stock levels (critical thresholds), particular components of capital are non-substitutable, i.e. they contribute to welfare in a unique way that cannot be replicated by another capital component, thus preventing unlimited substitution (strong sustainability). That this is important stems from the obvious fact that at any given time stocks of particular types of capital are in decline at the same time as other stocks are increasing. The substitution of one form of capital for another has the potential to lead to an overall decline in total capital, and hence unsustainable development.

The potential for unsustainable development lies in the trade-offs (increases in one form of capital at the expense of decreases in another form) occurring between different forms of capital, and the degree to which:

• any decline represents a breach of some critical threshold (in which case development would be considered unsustainable), and if not whether
• any decline in one form is compensated by increases in other forms.

The challenge for public policy is therefore to establish the existence and nature of trade-offs, and to engage in an explicit determination of whether declines in particular forms of capital are unsustainable by reference to the possible existence of critical thresholds and the acceptability of compensation implicit in the trade-off. In the event of trade-offs that give cause for concern for the sustainability of development, then policy responses will be required.

Intended Outcome of the Research: The research is intended as a non-academic, policy oriented, activity. The research seeks to work with stakeholders concerned with the challenge of improving regional sustainability. It seeks to recognise the practical difficulties of defining and making policy choices where these involve multiple impacts and multiple stakeholders. In so doing, the research itself will contribute to evaluating real world regional policy choices, and providing advice on choices that improve sustainability.

The research is intended to test evaluation tools, and to provide advice on how they might be best developed and applied. The research therefore aims to deliver an improved understanding of not just the issues, but of the ways of debating and reconciling competing interests and addressing uncertainty associated with long-term planning. Lessons from the experiences across the six regions should enhance the specific case study results.

Project Aims:

• To build on the 'four capitals' model - to elaborate the principal linkages and feedback mechanisms, with a view to extending beyond a heuristic framework
• To clarify the idea of social welfare used by the model - to elaborate the nature of sustainable regional development (SRD) objectives, including the influence of multi-level governance and the use of indicators to measure SRD
• To examine the measurement of trade-offs and critical thresholds - especially that between manufactured capital and natural capital, and between manufactured captial and social capital
• To examine and test the application of spatial planning tools - as a means of integrating policy choices
• To explicitly address the requirement for aggregation and weighting of policy impacts - by testing the deliberation matrix approach in selected regional policy and political contexts
• To confirm the utility and methods of application of the various evaluation tools - with recommendations to support SRD