A Sustainability Impact Assessment (SIA) highlights the importance of certain sub-systems (trade, economic, social, environmental and regulatory) as building blocks within an overall framework, and draws attention to the main interdependencies which exist between them. A core set of sustainability indicators are used which relate to economic, social and environmental impacts of importance to sustainable development in all societies.
The findings of a SIA, prior to policy implementation, reveal where the need for measures to reduce or eliminate significant negative impacts are most likely to arise (within different country groupings and under different scenarios). They also indicate the types of impacts – economic, social or environmental – which are involved in each case.
Sustainability impact assessment is a relatively new concept for which there is no established methodology and little practical experience. What is familiar is the methodology and application of separate forms of economic, social and environmental appraisal at the project level. Cost benefit analysis, environmental impact assessment and social impact assessment are long-standing and, in the first two cases at least, their methodologies are well established. However, the application of specialised economic, social and environmental appraisals at the policy, plan and programme level (strategic-level appraisal) is much less developed. It is most developed in the economic sector, much less developed (though growing) in the environmental sector, and least developed in the social sector. A similar pattern exists so far as trade-related impact studies are concerned. It is relatively most advanced in the trade-economic sector, where modelling studies are often used. It is considerably less advanced in the trade-environment sector where a small number of modelling studies and a greater number of case studies have been completed.
Target and process indicators are used in SIA to evaluate whether policies (economic, social and environmental policies) are consistent with sustainable development principles (e.g. polluter pays principle, user pays principle, precautionary principle, reduction in income and gender inequalities etc.) and whether the regulatory and institutional capacities to implement these policies exist in the countries concerned and are being effectively used.
SIA indicators can include: average real income; net fixed capital formation; employment equity and poverty; health and education; gender inequalities; environmental quality (air, water, land); biological diversity and other natural resource stocks.
SIA can use the following significance criteria for evaluating impacts: extent of existing economic, social and environmental stress in affected areas; direction of changes in base-line conditions; nature, order of magnitude, geographic extent and duration of changes; regulatory and institutional capacity to implement mitigatory measures.
Impacts (economic, social and environmental) may be both positive and negative depending on the particular measure and the context in which it is applied. The same measure may give rise to both positive and negative impacts.