Sustainable human settlements – a decision-support tool Professor Mark Swilling, Sustainability Institute School of Public Management and Planning Stellenbosch University South Africa

Key shifts in human settlement policy From housing, to human settlementsFrom housing, to human settlements From one-size-fits-all, to recognition of contextFrom one-size-fits-all, to recognition of context From welfare for the poor (on the peripheries), to integrated human settlementsFrom welfare for the poor (on the peripheries), to integrated human settlements From unsustainable resource use, to sustainable resource use – SI/DHSFrom unsustainable resource use, to sustainable resource use – SI/DHS

Life Cycle Costing It is the intention of the National Treasury to progressively require more detailed analyses as funding requests are becoming larger compared to available resources. Under these circumstances, it is appropriate to prioritise requests which can demonstrate the largest benefits to our country. (MTEF Treasury Guidelines, 2007)It is the intention of the National Treasury to progressively require more detailed analyses as funding requests are becoming larger compared to available resources. Under these circumstances, it is appropriate to prioritise requests which can demonstrate the largest benefits to our country. (MTEF Treasury Guidelines, 2007) Cost Effectiveness Analysis – NPV calculation of different ways of achieving the same goalCost Effectiveness Analysis – NPV calculation of different ways of achieving the same goal

Unsustainable Design low density sprawllow density sprawl high unit costs of infrastructurehigh unit costs of infrastructure escalating transport costsescalating transport costs unhealthy & uncomfortableunhealthy & uncomfortable costly to operatecostly to operate inefficient urban designinefficient urban design inappropriate building materialsinappropriate building materials

Tool needed to... motivate a different way of seeingmotivate a different way of seeing counter the logic of the standard templatecounter the logic of the standard template demonstrate financial viabilitydemonstrate financial viability apply Treasury guidelines to human settlementsapply Treasury guidelines to human settlements Assist Dept of Human Settlements – 3 year contract – open sourceAssist Dept of Human Settlements – 3 year contract – open source

Building the model As built costs of RDP housing projects (all conventionally designed): actual cost of house, services & landactual cost of house, services & land Municipalitys operating costs – 40 yrsMunicipalitys operating costs – 40 yrs operating costs for household – 40 yrsoperating costs for household – 40 yrs size of capital subsidy (mainly DHS, but top up from Municipality)size of capital subsidy (mainly DHS, but top up from Municipality)

Costing green interventions Solar hot water heater: R R9 000Solar hot water heater: R R9 000 CFL lights: R88CFL lights: R88 Rainwater harvesting: R7 888Rainwater harvesting: R7 888 Hold-flush toilet: R5 545Hold-flush toilet: R5 545 Low-flow fixtures: R420Low-flow fixtures: R420 North-facing orientation: R2 500North-facing orientation: R2 500 larger north-side overhangs: R1 750larger north-side overhangs: R1 750 Ceilings: R3000Ceilings: R3000 Ecological landscaping: R1000Ecological landscaping: R1000 Total cost: R (green options = R31 191)Total cost: R (green options = R31 191) Discount Rate: 9%

Core Logic higher up front costs only justifiable if they reduce costs over the life cycle resulting in a total cost reduction compared to BAU (as per National Treasury requirements) - hencehigher up front costs only justifiable if they reduce costs over the life cycle resulting in a total cost reduction compared to BAU (as per National Treasury requirements) - hence NPV of household savingsNPV of household savings NPV of savings on electricity & waterNPV of savings on electricity & water reduced GHG emissions (carbon tax/credits)reduced GHG emissions (carbon tax/credits) increased health & comfort of householders – non-quantifiable, but developmentalincreased health & comfort of householders – non-quantifiable, but developmental

Model units delivered nation-wide units delivered nation-wide Capital subsidy: R60 000Capital subsidy: R Municipal top up: R2 750Municipal top up: R2 750 Household pays for green interventionsHousehold pays for green interventions Conservative projections for energy/water pricesConservative projections for energy/water prices But: if subsidy increased to R to pay for green interventions, major poverty and macro- economic impact

ddfdd Break even: 1 yr Indiv. household benefit: R Energy saving: MWh/yr CO2 emissions reduced: tons/yr Water savings: Kl/yr Household savings/yr: R182 m Only CFLs and low-flush fixtures – Subsidy = R60 000

Solar water heaters, CFL lights, rainwater harvesting, hold-flush toilet, Low-flow fixtures – Subsidy = R Breakeven: yr 4 Indiv. Household benefit: R Electricity saving: MWh/yr CO2 emissions reduced: tons/yr Water use: Kl/yr Household savings/yr: R522 m

Solar water heaters, CFL lights, rainwater harvesting, hold- flush toilet, low-flush fixtures, north-facing, larger north- side overhangs, ceilings, landscaping – Subsidy = R90 000

Beyond minimalism multiple income categoriesmultiple income categories city-wide settlement planningcity-wide settlement planning more interventions: location/transport, solar PV, bulk infrastructure (recycled sewage, waste), restoration of eco-system services, healthmore interventions: location/transport, solar PV, bulk infrastructure (recycled sewage, waste), restoration of eco-system services, health additional funding sourcesadditional funding sources

Future beyond minimizing damage restoration of life can human settlements become drivers of the green economy?