Sustainable human settlements – a decision-support toolProfessor Mark Swilling, Sustainability InstituteSchool of Public Management and PlanningStellenbosch UniversitySouth Africa

Key shifts in human settlement policy

• From housing, to human settlements• From ‘one-size-fits-all’, to recognition

of context• From welfare for the poor (on the

peripheries), to integrated human settlements

• From 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)

• Cost Effectiveness Analysis – NPV calculation of different ways of achieving the same goal

Unsustainable Design• low density sprawl• high unit costs of infrastructure• escalating transport costs• unhealthy & uncomfortable• costly to operate• inefficient urban design• inappropriate building materials

Tool needed to...• motivate a different way of seeing• counter the logic of the standard

template• demonstrate financial viability• apply Treasury guidelines to human

settlements• Assist Dept of Human Settlements –

3 year contract – open source

Building the modelAs built costs of RDP housing projects

(all conventionally designed):• actual cost of house, services & land• Municipality’s operating costs – 40

yrs• operating costs for household – 40

yrs• size of capital subsidy (mainly DHS,

but top up from Municipality)

Costing green interventions• Solar hot water heater: R9 000 + R9 000

• CFL lights: R88• Rainwater harvesting: R7 888• Hold-flush toilet: R5 545• Low-flow fixtures: R420• North-facing orientation: R2 500• larger north-side overhangs: R1 750• Ceilings: R3000• Ecological landscaping: R1000• Total cost: R93 941 (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) - hence

• NPV of household savings• NPV of savings on electricity & water• reduced GHG emissions (carbon

tax/credits)• increased health & comfort of

householders – non-quantifiable, but developmental

Model• 220 000 units delivered nation-wide• Capital subsidy: R60 000• Municipal top up: R2 750• Household pays for green interventions• Conservative projections for energy/water

pricesBut: if subsidy increased to R90 000 to pay

for green interventions, major poverty and macro-economic impact

ddfdd

Capi-tal

Y 5 Y 10 Y 15 Y 20 Y25 Y30 Y35 Y40 R - R 100,000.00 R 200,000.00 R 300,000.00 R 400,000.00 R 500,000.00 R 600,000.00 R 700,000.00 R 800,000.00

Total Cost Effectiveness Comparison

Sustainable Conventional

Break even: 1 yrIndiv. household benefit: R145 455Energy saving: 232 320 MWh/yrCO2 emissions reduced: 278 784 tons/yrWater savings: 7 128 000 Kl/yrHousehold savings/yr: R182 m

Only CFLs and low-flush fixtures – Subsidy = R60 000

Capi-tal

Y 5 Y 10 Y 15 Y 20 Y25 Y30 Y35 Y40 R - R 100,000.00 R 200,000.00 R 300,000.00 R 400,000.00 R 500,000.00 R 600,000.00 R 700,000.00 R 800,000.00

Total Cost Effectiveness Comparison

Sustainable Conventional

Solar water heaters, CFL lights, rainwater harvesting, hold-flush toilet, Low-flow fixtures – Subsidy = R60 000

Breakeven: yr 4Indiv. Household benefit: R387 334Electricity saving: 673 200 MWh/yrCO2 emissions reduced: 807 840 tons/yrWater use: 19 419 840 Kl/yrHousehold 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

Capi-tal

Y 5 Y 10 Y 15 Y 20 Y25 Y30 Y35 Y40 R - R 100,000.00 R 200,000.00 R 300,000.00 R 400,000.00 R 500,000.00 R 600,000.00 R 700,000.00 R 800,000.00

Graph 1: Total Cost Effectiveness Comparison

Sustainable Conventional

Breakeven: year 5Indiv. Household benefit: R379 084Energy saving: 673 200 MWh/yrCO2 emissions reduced: 807 840Water savings: 19 419 840 Kl/yrHousehold savings/yr: R1.5 bPlus: health & comfort benefits

Beyond minimalism• multiple income categories• city-wide settlement planning• more interventions:

location/transport, solar PV, bulk infrastructure (recycled sewage, waste), restoration of eco-system services, health

• additional funding sources

Futurebeyond minimizing damage

restoration of life

can human settlements become drivers of the green economy?