The following dissertation describes a Methodology for developing projects for sustainable development. The methodology has been developed taking into account the seven socionomic principles for evaluation of sustainable development projects.
A system of indicators is proposed to measure the long-term well-being and the corresponding sustainable development of a social or management community based on Bossel.
To determine whether a social or management community is advancing on the path to sustainable development, this chapter proposes the use of the Pareto criterion. The social community is moving towards greater sustainability if the importance of at least one of the indicators improves without deteriorating the importance of each of the other indicators. In order to determine the direction of movement of the value of each indicator, it is necessary to determine the basic and target values of the indicators.
The basic values of the indicators at the time of their introduction – ie. once their current values have been accepted and collected. The baseline values of all indicators must be determined at the same time in order to be comparable. Desired future values or target values must also be set for each indicator. They must also be set at the same future point in time – for example after 10 years. The target values of the indicators reflect the goals that the social community will strive to achieve. Achieving the targets would mean that the community has developed in the desired direction and that the development process is balanced and sustainable.
“without the project” and “with the project”
For the purposes of the comparison “without the project” and “with the project”, the basic values must be adjusted. Inherent in the project are only the additional benefits and costs caused by it. The baseline value, adjusted for the likely changes that would have taken place if the project had not been implemented, is the “adjusted baseline value”. The adjustment must always be made at a certain point in time.
Setting targets is an issue that needs to be addressed by the social community itself. The following approaches are possible in determining them:
For target values to be used the current values of the indicators of other, more developed social communities in the country, which serve as a model;
Use current or estimated averages for the planning area or for the whole country. In this case, the aim is to equalize the degree of development. When current meanings are used, it should be borne in mind that they will change over the planning period of the social or management community;
Use current or projected averages for a member state of the European Union (or for a model country outside the EU) or averages for the European Union;
Use target values for other social communities;
Use of target values determined by expert assessment, reflecting the aspiration of the social community to a certain level of well-being.
Different approaches can be used for each individual indicator. The values of the indicators, taken from other communities, can be adjusted by a certain coefficient – to be lowered or increased, respectively.
When the baseline and target values of each indicator are set, in order to measure the progress made at a given point in time, the current value of the indicator must be determined. We determine the progress made as follows:
desired progress for the period = target value – adjusted baseline value
In = Itn – Ibn
where In is the desired progress for the planning period with respect to the nth indicator, Itn is the target value of the nth indicator, and Ibn is the adjusted baseline value of the nth indicator.
progress ratio = current progress achieved / desired progress total for the period.
Kn = (Icn – Ibn)/In
where Kn is the coefficient of progress with respect to the nth indicator, and Ic is the current value of the nth indicator.
It is possible that instead of progress there is a deterioration in the reading of the indicator or a negative progress – it will be measured with a negative number. When there is no change in the indicator, the progress is zero.
When determining the progress, the desired direction of progress should be taken into account – decrease or increase of the value of the indicator. When the desired change of the indicator is in the direction of reduction, such as in the case of unemployment, the formulas take the following form:
In = Ibn – Itn
Kn = (Ibn – Icn) / In
The question arises as to whether it is possible and appropriate to define an aggregate indicator that provides a synthesized assessment of the social community’s progress towards sustainable development. Such a criterion would be very useful for evaluating sustainable development projects, monitoring community development and planning development corrective actions.
The individual coefficients of progress can be combined into a common index, which we will call the Sustainable Development Index.
If there is more than one indicator for a single system benchmark, a total progress ratio must be found based on the individual progress ratios – as an arithmetic mean or as a weighted average. Determining the weight of the individual indicators is a matter that must be addressed by the social community – it is a matter of social preferences;
Determination of a general Sustainable Development Index
Determination of a general Sustainable Development Index as an arithmetic mean or as a weighted average of the individual progression coefficients. If the social community has reason to place higher weights on some of the indicators (and therefore lower on others), it can do so. The system must be balanced with respect to all system benchmarks and therefore all benchmarks are equally important, which implies the use of an arithmetic mean. The use of weights is necessitated by another circumstance.
When the difference between the adjusted baseline value and the target value of an indicator is small (low level of dissatisfaction with the relevant benchmark), small changes in the value of the indicator can lead to a large progress measured by the progress ratio.
Similarly, little progress can be observed on indicators with large differences between the adjusted baseline and target values, despite major changes in terms of meeting the relevant benchmark.
These distortions can be overcome by placing weights on the indicators to adjust the progression downwards in the first case and upwards in the second.
The formula for determining the Sustainable Development Index is as follows:
Isd = (∑Kn) / n
where Isd is the Sustainability Index, Kn is the individual progress ratio for the nth indicator, and n is the number of indicators.
The positive value of the Sustainable Development Index is an indicator of sustainable development. The closer this meaning is to unity, the closer the social community is to the goals it has set for the respective planning period. In this case, an important condition must be met – all individual coefficients of progress must have non-negative values (Pareto criterion). Pareto criterion. (n.d.) Segen’s Medical Dictionary. (2011). Retrieved August 4 2020 from https://medical-dictionary.thefreedictionary.com/Pareto+criterion
Otherwise, development is unbalanced and unsustainable – progress in some areas is at the expense of deterioration in other areas. Negative values of the Sustainable Development Index indicate regression, and zero – lack of development.
Therefore, a positive Sustainability Index, reflecting the changes that have occurred as a result of a project, is an indicator of a positive contribution of the project to the sustainable development of the community, provided that the Pareto criterion is met (ie the importance of IUD is acceptable). . A project that has a negative Sustainability Index or for which the Pareto criterion is not met is unprofitable and should not be undertaken.
The Sustainable Development Index is a synthetic criterion for increasing the well-being of a project. It is a function of the individual indicators for sustainable development:
Isd = F (I1, I2,…, In)
The fulfillment of the two conditions for acceptability of the Sustainable Development Index presupposes multi-criteria optimization of the target function of sustainable development.
Methodology for developing sustainable development projects is described in successive steps, grouped into four groups, according to the phases of programming, identification, preparation and evaluation, combined with the general term development. Each individual step is described by a process model, which includes the resources needed to perform the respective step (process), the tools and techniques applied, and the results obtained. Human and administrative resources are not explicitly mentioned, but they are included by default in each process. Below is a summary of the Methodology.
Existing approaches to analyzing the net benefits of the project create opportunities for approval of projects with uncompensated social costs and uncompensated negative impacts on the natural environment. These opportunities are increasing due to imperfect methods for measuring and valuing social and environmental effects. The shortcomings call into question the acceptability of traditional net benefit analysis as a basis for evaluating sustainable development projects.
There is no comprehensive methodology to be used to develop sustainable development projects. There is no practical mechanism for preparing and evaluating projects that contribute to sustainable development.
A new approach to project evaluation is substantiated and proposed using the Sustainable Development Index, which determines the long-term net benefits of the project for the respective community. The application of the approach does not allow the approval of projects with uncompensated social costs and uncompensated negative impacts on the natural environment.
The Sustainable Development Index is based on the socionomic principles and the Capital model of the project.
A comprehensive Methodology for developing projects for sustainable development is proposed. The methodology is based on the Capital model of the project and management principles, and it provides a mechanism for applying each principle. In the part for project evaluation, the Index for Sustainable Development is applied in the Methodology.
The methodology provides a practical mechanism for preparing and evaluating projects that contribute to the sustainable development of management communities at different levels.