How Can Indonesia Foster Sustainable Infrastructure Solutions That Deliver Low-Carbon Development and Bring Additional Benefits?

This technical report describes the Sustainable Asset Valuation (SAVi) methodology and its application to various infrastructure types to calculate the costs of environmental, social, governance, and climate risks, as well as externalities. It specifically explores how SAVi can be integrated into Indonesia's Vision 2045 (IV2045) system dynamics model to better inform low-carbon development and investment strategies by bridging top-down national planning with bottom-up asset-specific analysis.

• The Sustainable Asset Valuation (SAVi) methodology is a simulation-based assessment designed to calculate the costs of externalities and risks—such as health costs related to emissions—that are typically overlooked in traditional financial valuations.
• SAVi utilizes three primary modelling approaches: system dynamics to quantify causality and feedback loops, project finance modelling to assess financial viability and bankability, and spatially explicit models (often using the InVEST platform) to estimate land-cover changes and ecosystem service provisioning.
• In a comparison of energy assets in Germany, SAVi analysis showed that a hypothetical gas-fired power plant loses investment attractiveness when climate change risks and monetized externalities are included, whereas an onshore wind portfolio remains a more resilient and profitable choice.
• A SAVi assessment of the Paterson Park District in Johannesburg, South Africa, found that green buildings result in significantly lower life-cycle costs (ZAR 312 million) compared to conventional buildings (ZAR 462 million) due to savings in energy, maintenance, and avoided greenhouse gas emissions.
• Analysis of the Pan Borneo Highway in Malaysia revealed that while the project appears economically appealing in traditional terms, negative environmental externalities total USD 665.5 million over 25 years, reducing the societal return on investment to USD 0.97 per USD 1 invested.
• In Colombo, Sri Lanka, SAVi results indicated that upgrading wastewater treatment for Beira Lake would be a highly worthwhile investment with a benefit-to-cost ratio of nearly 40, potentially increasing local property values by over USD 14 million by 2025.
• An assessment of the Southern Agricultural Growth Corridor of Tanzania (SAGCOT) showed that drip irrigation is more bankable than flood irrigation when low capital costs are assumed, as it can unlock 10,600 hectares of productive agricultural land.
• For wetlands in Sardinia, Italy, SAVi estimated that avoiding degradation could generate an additional value of EUR 171 million between 2020 and 2060, and a circular business scenario reusing livestock manure could provide a net benefit exceeding EUR 200 million over 40 years.
• Integrating SAVi modules into Indonesia's Vision 2045 (IV2045) model would allow for more detailed asset-specific analysis, such as adding building stock features, precise road construction materials, and spatially explicit irrigation demand, bridging the current top-down approach with a bottom-up one.

APA

Bassi, A. M., Bechauf, R., & Cutler, E. (2021). How Can Indonesia Foster Sustainable Infrastructure Solutions That Deliver Low-Carbon Development and Bring Additional Benefits? International Institute for Sustainable Development. https://www.iisd.org/system/files/2021-07/indonesia-sustainable-infrastructure-solutions-annex.pdf

Chicago

Bassi, Andrea M., Ronja Bechauf, and Emma Cutler. How Can Indonesia Foster Sustainable Infrastructure Solutions That Deliver Low-Carbon Development and Bring Additional Benefits? International Institute for Sustainable Development, 2021. https://www.iisd.org/system/files/2021-07/indonesia-sustainable-infrastructure-solutions-annex.pdf.

Wikipedia

{{cite report |last1=Bassi |first1=Andrea M. |last2=Bechauf |first2=Ronja |last3=Cutler |first3=Emma |title=How Can Indonesia Foster Sustainable Infrastructure Solutions That Deliver Low-Carbon Development and Bring Additional Benefits? |publisher=International Institute for Sustainable Development |date=July 2021 |url=https://www.iisd.org/system/files/2021-07/indonesia-sustainable-infrastructure-solutions-annex.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bassi2021how, author = {Bassi, Andrea M. and Bechauf, Ronja and Cutler, Emma}, title = {{How Can Indonesia Foster Sustainable Infrastructure Solutions That Deliver Low-Carbon Development and Bring Additional Benefits?}}, institution = {International Institute for Sustainable Development}, year = {2021}, month = jul, url = {https://www.iisd.org/system/files/2021-07/indonesia-sustainable-infrastructure-solutions-annex.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }