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 to estimate 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 w

ith th

e state of the evidence

for quantifi

cation availa

ble from m

e

Introduction 2: $5 benefit for every £1 dollar invested?

• Misreported to imply a cost: benefit ratio had been calculated.

• Other problems, particularly around aesthetic value calculation.

“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

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 1: costs for the four modelled trees

Results 2: air pollution removal (tonnes per year)

Results 3: annual carbon sequestration

Results 4: comparison of costs and benefits during the study year (£ millions)

Results 5: cost: benefit ratios (3.5% discount rate)

Results 6: comparing the flow of benefits at different discount rates

Results 7: cost: benefit ratios (2.1% discount rate)

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.

AuthorsT. Sunderland, Natural England, 1

East Parade, Sheffield S1 2ETK. Rogers, Hi-line Consultancy,

Brookfield Yard, Tedburn Road, Exeter EX4 2HF

N. Coish, Torbay Council, Roebuck House, Torquay, Devon TQ2 5TF

Contact detailsTim SunderlandEconomist (Senior Specialist)Analysis Team Natural England0300 0604638tim.sunderland@naturalengland.org.uk