Reversibility as a sustainability criterion for project selection

Abstract

Increasing stress on the environment and current norms of sustainable development have prompted the formalization of new approaches to decision-making. This may be achieved through the integration of sustainability issues into the project selection process. One of the issues of relevance in this context is reversibility. Reversibility in the context of this research is defined as the degree to which the anticipated or unanticipated impacts of a development project can be mitigated. This definition implies consideration of all impacts of a development plan for the purpose of identifying which alternative is "less irreversible," namely more reversible. A framework is proposed for measuring reversibility as one component of a sustainable approach to project selection. Other components include, or example, risk and equity. In the reversibility framework, social, ecological and economic impacts are combined in their respective categories using a distance metric to obtain three category indexes of reversibility for each alternative. Concepts of resilience, time preferences, option value, quasi-option value, and cumulative effects, which aid the impact quantification stage, are discussed. The application of the reversibility framework is demonstrated using data from a detailed case study, the North Central Project, which involves construction of approximately 500 kilometers of transmission and distribution lines and related activities to provide electricity for seven northern Manitoba communities that have obtained electricity from local diesel generating plants since 1967. The analysis shows that the degree of irreversibility associated with the North Central Project is less than the irreversibility of maintaining the existing diesel plants. Therefore, the North Central Project is the preferred alternative. The proposed reversibility framework is useful for compiling several sources of information in a single comprehensive form. As the principles of sustainability and sustainable development are inherently used in the framework, it is an appropriate tool for sustainable project selection.