Natural capital
Trees as natural capital
- 7% increase in property values86
- 5% jobs in England in green space sector87
- £60m annual cost of hospital admissions linked to air pollution88
- £12bn NHS annual cost of mental health89
- 4.1% potential increase in jobs90
- 250m annual cost of pollution90
- £96m potential inward investment91
- £448m value of views of urban forest42
- £10bn annual cost of flooding by 208068
Trees of course do have social and environmental benefits. However, the urban forest as an asset also has direct financial benefits. This is often called natural capital.
Natural capital refers to the set of ‘environmental assets that may provide benefits to humanity’ (Defra, 2017).
The significant contribution of GI including urban forestry to growth, jobs, health and social welfare, climate change, disaster mitigation, and agricultural and environmental policy was recognised by the European Commission in May 201392. Determining monetary values regarding the tree stock as a component of green infrastructure is vital to support the case for sustained investment of the urban forest.
Across the UK a lot of research has been undertaken, including the `Value of London’s Parks and Green Space’ by Vivid Economics who calculated for every ‘£1 spent by the Local Authority and their partners on public parks, Londoners enjoyed at least £27 in value’ and that ‘Londoner’s avoid £950m/year in health costs due to public parks’35. The restorative benefits93 of green space come at no direct cost to the user whereas other forms of relaxation e.g. medical treatment or yoga, usually do. Just a 10% increase in adult physical activity, which can be in the urban forest would benefit England by £500 million per annum94.
Living with views of the urban forest or having views of broadleaved woodland on journeys were estimated to be valued at around £448 million at 2007–08 house prices, or £15.7 million per year88. To demonstrate the value of our urban forests in Coventry, it would be beneficial to express a monetary value of the multiple benefits provided by the urban forest as a resource to help decision-makers manage the urban tree stock as a whole.
Trees and the local economy
Trees can have a direct influence on Coventry’s economy.
The value of good quality and accessible urban forestry on local economic regeneration can be quantified through inward investment and changes in employment (FTE jobs created); land and property values; new business start ups; and land and property prices. When the National Forest was created, the number of local jobs increased by 4.1% and local regeneration attracted £96 million of investment93. If, for example a new urban forest was created in or near Coventry it can be argued that inward investment would follow and be beneficial. Natural England has argued that green infrastructure and urban forestry can provide a competitive advantage to urban centres at a local scale95, 96. So what happens?
- Job creation: The labour force required for the management and maintenance of the urban forest.
- Supply chains: Sales and growth through the urban forest supply chain, such as horticultural and construction companies.
- Investment: High-quality living and working environments attract high-value industries and skilled workers to a region.
- Land and property values: Forested landscapes increase land and property values and attract further development to an area.
- Tourism: Urban forests attract visitors to an area, and increase their dwell time and spending with local businesses.
- Culture: Generation of creative and cultural businesses, employment and events held in the urban forest.
- Environmental cost-savings: Green infrastructure is a long term cost-effective alternative to grey infrastructure.
- Productivity: Urban forestry has a positive effect on the physical and mental health and wellbeing of the local workforce.
- Public health: The urban forest results in NHS and social care cost savings, which can be reinvested elsewhere.
- Urban heat island effect: The cooling effect of urban trees result in a reduction in energy costs associated with air conditioning.
- Vandalism: Good quality managed environments can reduce the incidence of vandalism and crime in an area.
- Land regeneration: Trees are a cost-effective tool for treating contaminated land, which can then be released for redevelopment.
Trees and the financial balance sheet
Trees and the urban forest can be quantified as financial assets.
There are various digital technologies that help us assess the benefits of the urban forest or a single urban tree, which will in turn direct management choices. The Forestry Commission’s `Street Tree Valuation System’97 compares three of these digital tools: CAVAT, i-Tree and Helliwell.
- CAVAT or Capital Asset Value for Amenity Trees is a tool which can be used to express the public amenity value of urban trees in monetary terms. It is used for the calculation of compensation by CCC when a planning decision is being made which involves the potential loss of a significant tree. Or, if a tree has been damaged, CAVAT can be used for evidencing, at levels agreed between local authorities and insurance companies. It provides a method for managing trees as public assets or Asset Value Management for Trees (AVMT) rather than liabilities, based on a depreciated replacement cost approach. ‘CAVAT takes into account the contribution of location, relative contribution to amenity, social value and appropriateness, as well as an assessment of functionality and life expectancy. AVMT can be effectively used to demonstrate the benefits of the urban forest and provide an argument to safeguard the budget for planting and management. CAVAT can be used as part of an i-Tree assessment to provide the “structural” value of a tree population. (See CAVAT: Trees and Development Guidelines paragraph SPD)
- i-Tree Eco98 is recommended for use by communities to strengthen forestry management. It standardises field data from randomly located sites across the whole of the authority area combined with local hourly pollution statistics and meteorological data to provide a picture of the ecosystem services supported by the urban forest. It can be used through i-Tree Canopy to measure overall tree canopy or urban forest cover, which can be one way of assessing the extent of tree cover over an area. It can also be used to determine Gross Leaf Area and species dominance99.
- Helliwell is based on expert judgement and focuses on valuing the visual amenity of a tree, independent both of the cost of originally growing the tree and of the potential replacement cost. A historic tree of great beauty may have grown at no cost, without human intervention; while an expensive street tree could be inappropriately located. Helliwell focuses on evaluation of the relative contribution the urban tree brings to the visual quality of the landscape.
