Five capital impact assessment: Appraisal framework based on theory of sustainable well-being

This paper sets out to formulate an appraisal approach in context with sustainable development. In conventional project appraisal, such as energy undertakings, most emphasis is placed on financial flows and rate of return on infrastructure investments. Although current greenhouse gas emissions are estimated to pose large costs on future generations, these emissions are generally not estimated as part of the investment cost. Other public goods may also be omitted because their value is not recognized. We review conventional Cost–Benefit Assessment and propose a new broader evaluation. This new evaluation approach is based on the theory that five capital value types support long term well-being rather than economic growth alone. The theory states that humans depend on the size of stocks and flows from natural, manufactured, human, social and financial capital. We describe the five capitals to illustrate the value categories, and outline an approach to evaluate all these in the context of energy development.