Green is the cornerstone for a future-proof municipality. Urban areas are confronted with multiple challenges such as climate adaptation and affordable housing with a high standard of living. A green environment can make an important contribution to these topics. Green areas help ensure a healthy environment and a good business climate, regulate the climate and stimulate (local) biodiversity. Green cities do not only provide solutions from an environmental or social perspective; they also provide concrete economic benefits.
In this article we provide insights into the economic values of greenery by actually monetizing them. Besides that, we share our experiences from our project office Nature^Squared with regards to how a municipality can truly act on this topic.
GREEN: essential link for a future-proof community
A green environment provides clear advantages, both for the environment as well as for society. The figure below summarizes some of these values.
Greening cities is one of the best solutions for purifying polluted air. In several Dutch cities, air pollution is so critique that it has become the third cause of death in the Netherlands. Implementing green spaces can thus save human lives.
In addition, greenery is a crucial link for every climate (adaptation) strategy. Trees capture CO2 from the air, therewith preventing global warming, and help the local environment to cool by mitigating the heat island effect.
Water regulation, storage and biodiversity
A green environment helps to regulate water and enlarges the storage capacity of water, therewith preventing flooding. On top of that, it provides a great stimulus for the plants and animals that live in the city. Cities are promising biodiversity hotspots; implementing more greenery invites animals to settle there. There are also numerous examples where nature contributes to soil remediation.
Health and social benefits
Society as well profits from a green environment. Greenery provides a healthy environment. It leads to less absenteeism and healthier and more productive inhabitants. Municipalities see a rise in house prices when these are surrounded by greenery. On top of that, a green environment brings people together. Think for instance of vegetable gardens that are managed by a group of people in the neighborhood. These types of social activities create vibrant and social neighborhoods.
Green infrastructure is key in any climate adaptation strategy
EEN GROENE PLUS VOOR KLIMAATADAPTATIE
Creating greener areas is not a standalone goal. From the Deltaplan Spatial Adaptation, you are probably already working on climate adaptation measures in the context of ‘’climate stress tests’’. But did you know that these measures can easily be made more biodiverse? Inspiring examples of this relation between climate and biodiversity can be found in the white-paper: ‘Een groene plus voor klimaatadaptatie’ (only available in Dutch).
A tree has a cooling capacity similar to 10 ACs
A green environment means money on the table
The environmental and social benefits of greenery are clear; but did you also know that green is worth money? One tree captures just as much particulate matter as a car ride of 7,500 kilometers. And one single tree has a cooling capacity similar to 10 ACs.
€3 million in savings per year
The economic benefits can run high. For example, a green roof can capture up until 80% of rainfall, and a single tree can retain up to 2,877 liters of water per year. When these types of measures for 150 houses result in a reduction of the probability of flooding from once every 20 years to once every 100 years, annual cost savings of €2,983,209 in avoided damage can be created.
In the table below, you see concrete numbers of the most important green values. The numbers shown are a simplification of the truth and are based on a combination of scientific studies (all values accurate for the context of The Netherlands).
REAL ESTATE VALUES
|On average, houses surrounded with green and blue elements have a 6-12% higher property valuation, rising to a maximum of 30%.||A green environment can lead to 25% less depression, 15% less migraine attacks, 23% fewer asthmatics and 15% fewer people who are obese.||A one hectare park, consisting of deciduous forest, grass and reed captures 2.2 tons of carbon per year.|
|This means that an average house worth 2.6 ton, has €15,600 – €31,200 in green added value up to a maximum of €78,000.||10% more greenery can save an average municipality €717,547 in health costs and costs related to absenteeism.||A park of 45 hectares thus generates €4,892,58 in CO2 -benefits per year.|
|Annually, 12,000 people die prematurely as a result of polluted air. A tree with a diameter of 50 cm captures 500 grams of particulate matter per year, equaling a car ride of 7,500 kilometers.||Trees provide cooling. One tree on a sunny day has a cooling capacity of 20-30 kW. Hence, the cooling capacity of one single tree is similar to 10 ACs.||When 10% of the garden area in a municipality is converted from a petrified to a living (green) garden, you prevent 85,000,000 liters of rainwater from flowing into the sewer each year.|
|A row of 10 trees, capture 5 kilogram of particulate matter per year. This capture is worth €1,885 in prevented health costs.||10% more trees in a neighborhood can save €40 – €75 in annual energy costs per home.||This means annual savings of €39,100 in sewage and treatment costs.|
|Green and blue elements in a neighborhood enlarge the water storage capacity and contribute to a climate-adaptive municipality. A green roof can hold up to 80% of rainfall and a single tree can retain up to 2,877 liters of water per years.||A green roof, supplemented with herbs and flowers, or a garden ensures that more food is available for butterflies, bees and endangered urban species such as the swift and the pipistrelle bat. Swallows and bats can catch tens of thousands of insects a day (including mosquitoes) and thus make a functional contribution for residents of urban areas.||Joint activities bring people together in a neighborhood. A vegetable garden that is managed by a group of people in the neighborhood can provide an important social stimulus in a neighborhood. When increasing greenery with 1%, social cohesion in a neighborhood goes up by 0.6%.|
|Increasing the water storage capacity, can lead to annual savings of €2,983,209 in avoided damage of flooding.||Worker bees live about 60 days. During that time, they produce about a spoonful of honey. If we would do the same job at minimum wage, a jar of honey would cost €162,000.||A 10% increase in greenery in a municipality, can lead to annual costs savings of €308,310 as a result of avoided relocation.|
THE VALUE OF GREEN IN MY CITY
The table above shows that a green environment provides multiple benefits. Through the Teeb.stad (Teeb.city) tool (see text box), a municipality can easily calculate the value of green (and blue) at the level of a street or neighborhood based on multiple scenarios. While this is an easy to use tool to make a start with calculating the value of green (and blue), it is based on index numbers. Experts such as Nature^Squared are able to make these numbers more location-specific.
TEEB: THE ECONOMICS OF ECOSYSTEMS AND BIODIVERSITY
The Economics of Ecosystems and Biodiversity (TEEB) is an international study initiated by the United Nations into the economic value of biodiversity and ecosystem services. Consequently, follow-up studies have been carried out in approximately 22 countries. The Dutch Ministry of Economic Affairs carried out one of these studies under the name Teeb.stad (Teeb.city).
TEEB.STAD (TEEB.CITY): INITIATIVE OF THE DUTCH GOVERNMENT AND 11 MUNICIPALITIES
Teeb.stad ((Teeb.city) started in 2011 as a joint initiative of the Dutch government and 11 municipalities. A method has been developed to reason, calculate and profit from the values of green and blue.
Societal cost-benefit analysis
Using this method, multiple societal cost-benefit analyses have been carried out for various projects of the municipalities concerned. These analyses point out that there are significant positive societal effects from green and blue to be expected. The construction of greenery yielded 1.5-2 times more than it would cost. However, it proved to be challenging for participating municipalities to use the method themselves; they faced difficulties with calculating the benefits as well as using the results in urban processes.
In 2013, the Ministry of Economic Affairs therefore assigned Platform31 to start a follow-up project. One of the goals was to translate the project specific societal cost-benefit analysis approach to a freely accessible online tool. By adjusting the scenarios, the user can see and understand what happens when there is more or less green and blue in the city.
Nature^Squared has provided support for the content creation of the tool. In addition, we have organized various workshops for students and employees of Dutch municipalities.
FROM SOCIETAL VALUES TO REAL PAYMENTS
Important to consider is that the results of such calculation concern societal values. But what can you actually do with the results? To move beyond thinking in societal values and come up with clear models to pay off, it is key to assess the probability of payment per situation. Who or what is the beneficiary and how to involve the right parties?
Valuating nature: how does it work?
To get municipalities underway, we frequently organize the workshop ‘Value, valuation and valorization’. In this workshop we share how valuation of greenery works, how you can go about it, and what possibilities there are to arrive at a configuration where green is actually paid for. The workshop ends with a call to action to calculate a ‘’greener’’ scenario for every major development, thus ensuring that this way of thinking can be put in practice.
For every major development, a ‘’green scenario’’ must be calculated
NATURE BASED SOLUTIONS IN DE PRAKTIJK
We have also developed a Serious Game to stimulate green business models in the city, using a fictional or concrete case. Participants place themselves in the position of another stakeholder (e.g. municipality, project developer, waterboard) and are encouraged to realize nature-based solutions together. Where do they have common grounds, which barriers have to be overcome and what does it mean for realizing financial arrangements in practice? In this way, a group of practitioners can go through a steep learning curve in a short time.