ARCHIVE: Terms of reference: economics of sustainable development - interdepartmental review


Approaches to using Sustainable Development in policy-making vary across departments, there is not a clearly elucidated theoretical framework and no specific and clearly defined methodology in guidance used by economists. As a result, it is not clear how to use sustainable development to inform better decision making, so it risks being ignored.

Membership and resourcing of the group

The group will be chaired by Richard Price and membership of the group will represent cross-departmental interest in sustainable development and provide the necessary economic expertise to achieve the group’s aims and objectives. The group will also include other disciplines from within government and also engage with academics with relevant expertise.

Group membership will include representatives of CLG, BERR, Defra, DfT, HMT, SDC, and others when considered appropriate. NAO will retain observer status on the group and Defra will provide a secretariat function.

Objectives and outcomes

  • To establish a clear and robust analytical framework for the consideration of sustainable development in the context of policy development, appraisal and evaluation.

We will commission a review of the current thinking in terms of theoretical and practical approaches to sustainable development. In addition to relevant concepts and approaches already used, we will identify approaches which need adapting or strengthening for use, and where new work is required. The output of this review will be a report and an agreed analytical framework which will provide the basis for the remainder of the project. The starting point for the review could include the concepts, materials and publications found in the list below. It will also need to address the issues raised in the call for evidence.

  • To investigate and make recommendations as to how the analytical framework can be effectively operationalised and integrated into policy-making processes, in particular into policy appraisal.

Where possible the Group will seek to propose a clear and systematic set of criteria against which the sustainability of policy and strategy can be assessed, or it will suggest how this might be done in a later project. Outputs from this phase of the work may include additional guidance for policy makers, and possibly a supplement to the Green Book. The group will develop the outline of a communications plan to ensure that any new guidance is communicated effectively to those who need to be informed of it across departments.

The group will highlight any areas for further work.

Examples of current thinking and practice for us to consider

  • Government 5 principles of sustainable development
  • The Green Book / ‘traditional’ CBA with shadow prices
  • Impact assessment SD filter.
  • A review of current practice across Govt i.e. in IAs and policy documents (i.e. Construction Strategy)
  • Review of international practice and developments i.e. Joint UNECE /Eurostat / OECD Working Group on Statistics for Sustainable Development
  • Weak and strong sustainability
  • “Stretching the web”
  • Capital asset approaches to measuring sustainability i.e. Pearce / Atkinson
  • Happiness/wellbeing (as a concept distinct from utility)
  • Climate change adaptation work ongoing cross-Whitehall
  • Valuing the environment: Shadow price of carbon, Ecosystems services
  • Distributional impacts and social capital
  • Discount rates, intergenerational equity and the appropriate time period for analysis
  • Irreversibility and ecological limits (and the precautionary principle / safe minimum standards
  • Ecological footprints, the World Bank’s genuine savings, Index of sustainable economic wellbeing

Page last modified: 16 April 2009
Page published: 16 April 2009