Practical and Theoretical Underpinnings of INFFER (Investment Framework For Environmental Resources)

INFFER (Investment Framework for Environmental Resources) was developed to helpinvestors of public funds to improve the delivery of outcomes from environmental programs.It assists environmental managers to design projects, to select delivery mechanisms, and torank competing projects on the basis of benefits and costs. The design of INFFER and theactivities of the INFFER projects are based on extensive experience of working withenvironmental managers and policy makers. This experience has highlighted a number ofimportant practical lessons, that have strongly influenced the design and implementation ofINFFER. These lessons include the need for simplicity, training and support of users, trustingrelationships with users, transparency, flexibility, compatibility with the needs and contextsof users, and supportive institutional arrangements. In additions, the developers have paidclose attention to the need for processes that are theoretically rigorous, resulting in a tool thatdeals appropriately and consistently with projects for different assets types, of different scalesand durations, consistent with Benefit: Cost Analysis. The paper outlines theoreticalconsiderations underpinning the way that INFFER deals with asset valuation, time lags,uncertainty, and the design of the metric used to rank projects.