[A] four-year research project ... found that the impact of burying disposable nappies in landfill sites was matched by the energy consumed and greenhouse gases generated by washing reusables or transporting them to laundries. Thisislondon.co.ukEnvironmental impact is a difficult concept to measure. How is one to weight the environmental impact of (say) washing cloth nappies in water heated to 100 degrees Celsius, against that of the harvest, transport and disposal in landfill of their paper subsitute? At great cost (the study referred to in the quote above cost £30 million and took four years) you could probably compare the impact in terms of any one environmental indicator, such as water use, landfill volume, or even carbon footprint (assuming resolution of boundary issues). But even assuming a complete and accurate Life Cycle Analysis, there is no objective way of weighting the different impacts.
Social Policy Bonds applied to environmental issues have huge informational advantages over some conventional policies, particularly on a large scale. For instance, rather than try to evaluate the diverse impacts of the vast and ever-changing panoply of consumer goods and services, a bond regime would take a few broad indicators - regional landfill volume, air quality, climate stability - express its goals in terms of thresholds that must not be breached, then reward the achievement of those goals. Just how those goals are to be achieved is left up to investors in the bonds, competing with other would-be investors to find the most cost-effective ways of doing so. For more about Social Policy Bonds applied to environmental problems, click here.