What proportion of the costs of urban trees can be justified by the carbon sequestration and air-quality benefits they provide? Arboricultural Association Conference, 20th September, 2011
Natural England • Established by the Natural Environment and Rural Communities Act (2006) to ensure that the natural environment is conserved, enhanced and managed for the benefit of present and future generations. • Biodiversity • Landscape • Access and engagement • Human well-being
National Ecosystems Assessment WHAT HAS NATURE EVER DONE FOR US?
National Ecosystem Assessment key messages • “The welfare of a nation can scarcely be inferred from a measurement of national income” - Simon Kuznets speaking to the US Congress in 1934. • There are provisioning, regulating, cultural and supporting services. • Public policy must take the non-market benefits offered natural capital into account. • The NEA scenario which maximises GDP does not maximise well-being.
Abstract In a previous paper we; • sampled Torbay’s trees producing a quantitative estimate of forest structure, • applied I-Tree eco toestimate air pollution and carbon sequestration; and • produced automatic valuation using US standard values. In this paper we; • apply appropriate UK values to the analysis, • produced a one-year ‘snapshot’ comparing costs and benefits, • modelled the life-time costs and benefits of four trees in the Torbay context; and • produced indicative and partial cost: benefit ratios for the decision to plant those trees.
Introduction 1: costs and benefits of urban trees A review with the state of the evidence for quantification available from me
Introduction 2: $5 benefit for every £1 dollar invested? “the study concludes that New York receives $5.60 in benefit for every $1 spent” http://www.nytimes.com/2007/04/18/nyregion/18trees.html • Misreported to imply a cost: benefit ratio had been calculated. • Other problems, particularly around aesthetic value calculation.
Site 1: Torbay geography • three towns; Torquay, Paignton and Brixham • some rural area • population density of 21.2 people per hectare is slightly less than Cheltenham
Site 2: Torbay’s urban forest • 818,000 trees • 11% forest cover • most common trees are; Leyland Cypress (14.5%), Ash (11.6%) and Sycamore (10%). • most important by leaf area are; Ash (19.5%), Sycamore (16.4%), Beech (5.8%) and Hazel (4.9%). • 71% of trees were in private ownership – but these are smaller ones
Methods 1: applying UK values to air pollution removal • The previous paper used abatement costs for air pollution. • In this paper we used social cost, which incorporates health and damage to buildings and crops. • Standard UK scoping values are available for different geographies: we used ‘transport outer conurbation’. • High-levels of uncertainty mean that medium, low and high values are provided, and there is a wide range between them. • For 2010 the values for removal of a tonne of PM10 were: low -£14,994, medium - £73,261 and high - £188,951. • Values were assumed to increase with economic growth at 2% per year (normal good assumption).
Methods 2: applying UK values to carbon sequestration • The previous paper used a US social cost estimate. • This paper uses the official UK non-traded price for carbon – because this is outside the EU trading scheme. • This is not a social cost, but rather the cost of not emitting the tonne elsewhere to keep within our Climate Change Act commitments. • Uncertainty is reflected in a range of values. For 2010 per tonne; low - £26, medium - £52 and high - £78. • These increase dramatically as carbon cuts get harder to make; eg £200 per tonne in 2050. • Interim estimates were used 2050 – 2100. • 2100 onwards was dealt with through linear extrapolation.
Methods 3: Tree modelling Lime Cherry Pine Oak • Four trees were modelled forwards and backwards to give their size and leaf area at four life stages up to 200 years old. • The cost-benefit analysis assumed they were planted in 2010.
Methods 4: discount rate • To produce a cost: benefit ratio we must be able to compare future costs and benefits with present ones. • To do this we use a discount rate to produce a present value (PV). • This sort of analysis is highly sensitive to the discount rate – and the discount rate is the hardest parameter to justify objectively. • The discount rate is made up of three elements; the growth assumption, the catastrophic risk and the pure time preference. • We therefore ran the analysis at two discount rates ; the Green Book rate (3.5%) and one with pure time preference removed (2.1%).
Results 4: comparison of costs and benefits during the study year (£ millions)
Results 6: comparing the flow of benefits at different discount rates
Discussion We have not been able to include; • the cost of sweeping leaves off the roads, • investment in trees by private owners, • any additional pavement works due to tree root damage; and • any benefits apart from air pollution removal and carbon sequestration • There are assumptions in the values used that are not made explicit eg climate change could alter tree performance dramatically as well as increasing the value of air pollution removal. • More inclusive CBA may be possible in time, but in the meantime Social Return on Investment and Multi-Criteria Decision Analysis would give a fuller picture. • This analysis is both partial and illustrative.
Conclusion • Torbay’s urban forest offers an annual air-quality benefit of £1.33 million per year. • The carbon sequestration benefit is £170,000 per year • These benefits compare well to annual costs • At standard UK Government discount rate of 3.5%: • an oak tree in a park justifies approx. 1/5th, • a lime tree in a street and a pine in a park both justify approx 1/10th ; and • a street cherry justifies 1/100th of their costs through the benefits considered. • Where space permits, large, long-lived trees are therefore preferable.
Authors • T. Sunderland, Natural England, 1 East Parade, Sheffield S1 2ET • K. Rogers, Hi-line Consultancy, Brookfield Yard, Tedburn Road, Exeter EX4 2HF • N. Coish, Torbay Council, Roebuck House, Torquay, Devon TQ2 5TF Contact details Tim Sunderland Economist (Senior Specialist) Analysis Team Natural England 0300 0604638 email@example.com