eftec - ecosystems knowledge...the late 1980s to improve the park. within 10 years, commercial ......

Green Infrastructure and the EconomyeftecEconomics for the Environment Consultancy

Webinar for the Green Infrastructure Partnership18th November, 2013

Ece Ozdemiroglu & Erin Gianferrara (eftec)

eftec

Green Infrastructure's contribution to economic growth: a review

Written by Economics for the Environment Consultancy (eftec) and Centre for Regional Economic and Social Research (CRESR) (Sheffield HallamUniversity). Report for Defra and Natural England.

Authors: Tony Gore, CRESREce Ozdemiroglu, eftecWill Eadson, CRESR Erin Gianferrara, eftecZara Phang, eftec

http://randd.defra.gov.uk/Default.aspx?Completed=0&Location=None&Menu=Menu&Module=More&ProjectID=19056



eftec

Objectives • Key Messages • Logic Chains • Case Studies • Key Conclusions

Objectives

Key Messages

Logic Chain

Case Studies

Key Conclusions for Decision Makers

eftec

Assess whether investment in Green Infrastructure (GI) contributes to economic growth

Set up a logic chain – to explain possible contribution

Review the economic literature and practical experience

Objectives


eftec

“the planned network of living systems either within

urban areas or located outside but affecting the quality

of life in urban areas”.

Based on the definition in: Natural Environment White

Paper (Defra, 2011)

Definition of Green Infrastructure


eftec

The importance of GI to the attractiveness of cities and neighbourhoods to people and investors is relatively well understood by city planners and developers

The impact is measurable mostly at the local level o Before and after a GI investmento GI area compared to other areas

Any contribution on the national scale is very difficult to assess empirically in terms of: o Additionality (with and without)o Displacement (all areas)

Key Messages


eftec


Logic Chains

eftec

GI increases the attractiveness of an area

Attracts people to the areao More people and businesses pay premiums to move

thereo Leads to more spending in the area (see (2))o This attracts even more investment to the area

(1) Inward Investment


Investm

ent •

2 •

3 •

4 •

5 •

6

eftec

Developers are willing, on average, to pay at least 3% more for land in close proximity to open space, with some putting the premium as high as 15-20%

Enhanced property values in the Bold Colliery Community Woodland amounted to £15 million and simulated new development worth a further £75 million

In the mid-20th century, Bryant Park (New York) was left unkempt and became a den of criminal activity. $30 million investment in the late 1980s to improve the park. Within 10 years, commercial rents more than doubled

The improvement of the Glasgow Green park landscape and amenities increased the attractiveness of the surrounding area, leading to additional council tax revenue of between £800,000 –2 million

Examples


Investm

ent •

2 •

3 •

4 •

5 •

6

eftec

Many factors increase the attractiveness of an area, so difficult to isolate the effect of GI

Difficult to conclude whether GI leads to additional inward investment and business development in an area oro this would have happened in the area anyway oro it is displaced from another area

Caveats


Investm

ent •

2 •

3 •

4 •

5 •

6

eftec

Increased attractiveness more visitors more spending

Spending on visits brings an inflow of investmento Direct spending on the businesses operating on the

green infrastructure (e.g. events, cafes in parks) o Indirect spending on businesses in the area (e.g.

shops, hotels, taxis etc. in the town) The extra spending also translates to more jobs

Welfare improvements that don’t involve spending

(2) Visitor spending


1• S

pendin

g •

3 •

4 •

5 •

6

eftec

£15 million investment in Glasgow Green attracted visitors who spent £30 million net additional worth of sales in the wider economy from 1998-2006

Birmingham’s canal side development generated net visitor (boater) spending of £115,000 per year

Estimate that an additional 330,000 visitors had entered the area covered by the National Forest, spent £128 million annually and created over 500 new jobs

Examples


1• S

pendin

g •

3 •

4 •

5 •

6

eftec

The increase in visitors to any area is likely to be subject to some degree of displacement

Analysing the spending data alone will underestimate the welfare increases as:o The majority of visits to the natural environment

involve no expenditure on the part of the visitors (TNS Research International, 2010)

o The majority of GI features are free of charge to those who make use of them

Caveats


1• S

pendin

g •

3 •

4 •

5 •

6

eftec

GI provides regulatory ecosystem services such as

o climate regulation and alleviation of urban heat island effects

o carbon sequestrationo contribution to biodiversityo regulating air qualityo reduction of flood risks

(3) Environmental cost savings


1 •

2 •

Savin

gs

•4 •

5 •

6

eftec

The provision of these services lead to:o Avoided cost of damage (that would have occurred in

the absence of these services)o Avoided spending on ecosystem services

(environmental protection, clean up or alleviation of damage)

(3) Environmental cost savings


1 •

2 •

Savin

gs

•4 •

5 •

6

eftec

Pollutants removed by trees in Mecklenburg County (North Carolina) amounted to economic welfare benefits of $4 million (in 2009), by preventing the pollutants from entering the atmosphere

The sheltering effects of trees could save 3-9% of yearly energy bills

The amount of run-off absorbed by parks were estimated to result in an annual saving of $19 million per year

Examples


1 •

2 •

Savin

gs

•4 •

5 •

6

eftec

These savings may be missed as they are likely to occur over a long time frame

Money not spent on providing ecosystem services could be spent on somewhere else in the region – but no accounting evidence to trace this

Caveats


1 •

2 •

Savin

gs

•4 •

5 •

6

eftec

The potential improvements to health come from:o cleaner air and water, through regulatory serviceso physical and psychological benefits, from outdoor

recreational activities

(4) Health benefits


1• 2

• 3

•H

ealth

• 5

• 6

eftec

These can lead to economic benefits through: o cost savings to the NHSo increased economic output due to a reduction in ill

health, stress and absence from worko increased economic output due to a reduction in the

incidence of premature death

(4) Health benefits


1• 2

• 3

•H

ealth

• 5

• 6

eftec

A park in Portsmouth may be providing savings of £910,000/year to the NHS as a result of improved health associated with outdoor recreation and improvements in environmental quality

Green exercise helps to lower stress, increase self-esteem and could provide routes into employment

100 people start walking 100 km/day 10% reduction in mortality (£31,000 per year)

Examples


1• 2

• 3

•H

ealth

• 5

• 6

eftec

There are many environmental, social and individual factors that affect human health – no evidence that sets GI apart (attribution problem)

The benefits may be missed as they are likely to occur over a long time frame

For benefits from recreation to be realised, existence of GI is not sufficient: campaigns to get people to exercise regularly are required

Caveats


1• 2

• 3

•H

ealth

• 5

• 6

eftec

(5) Market Sales


1• 2

• 3

•4

• M

ark

et S

ale

s• 6

Private gardens, allotments, communal gardens and woodlands can produce goods that can generate economic returns through o being sold in the market o reducing the need for purchasing food

Market sales data underestimate the benefits provided by GI as they are generally built for the purpose of physical activity a place to get away from the urban environment

eftec

The annual yield from 43 home ecohousingdevelopments in Swindon is estimated to be between £14,000-25,000

In Todmorden (West Yorkshire), they are using incidental open space for the cultivation of fruit and vegetables

Examples


1• 2

• 3

•4

• M

ark

et S

ale

s• 6

eftec

Hard to find data on product volumes and employment levels

There are also no proxies or benchmarks available

These economic returns are not the focus of investing in green infrastructure

Caveats

Objectives • Key Messages • Logic Chain • Case Studies • Key Conclusions

1• 2

• 3

•4

• M

ark

et S

ale

s• 6

eftec

On site jobs ino constructiono maintenance o operation

Off site jobs in parts of the tourism sector which rely primarily on use of green spaces

The impact of the jobs come through the multiplier effects of the associated increase in consumer spending

(6) Employment generation


1• 2

• 3

•4

• 5

• E

mplo

ym

ent

eftec

The number of people directly employed in the ‘green space sector’ is about 122,000 in England (~5% of all jobs)

The Glasgow Green’s upgrade resulted in an additional 230 jobs (1998-2006) for the wider business area

The canal side development in Birmingham city center involved 200 construction job-years

The effects of improving a rundown industrial estate in Wakefield (West Yorkshire) led to 16 new business (employing over 200 people) relocating to the estate

Examples


1• 2

• 3

•4

• 5

• E

mplo

ym

ent

eftec

There is no consistent basis to methods of assessment

There is no consistent usage of the ‘gross to net’ jobs additionality

Lack of information on the breakdown of employment, in terms of occupational structure

Caveats


1• 2

• 3

•4

• 5

• E

mplo

ym

ent

eftec

City-wide GI developments (Chattanooga, Toronto, Barcelona)

The High Line Park, New York City, USA

Cheonggyecheon Stream Restoration Project Seoul, South Korea

Case Studies


eftec

Chattanooga, Tennessee, USA – parkland and waterfront infrastructure: o US$1.2 billion investment since 1990o 73% increase in tourism between 1995 and 2000o 50% increase in tourism spending from 1991 to 2000o New businesses around Tennessee Aquarium increased

from 33 to 128 since the projecto 33% increase in the number of downtown workerso 127% increase in property valueso 99% increase in property taxes

City-wide GI development


eftec

Toronto, Canada – C$750 million (£480 million) invested in revitalisation projects (2001-2009): o 8,400 full time years of employment, of which 70% were

in the City of Toronto (majority in construction, professional, finance, insurance, real estate and leasing, scientific and technical services)

o C$1.6 billion (£1 billion) contribution to the Canadian economy

o C$124 million (£79 million) revenue to the Federal Government



eftec

Barcelona, Spain –• Rebranding the city following the 1992 Olympics• Criticism: gentrification of urban space, marginalising

incumbent users and residents• A wealth of studies on this process and the

transformation of the city• These do not focus on the impacts of GI within this

process



eftec

The High Line Park


eftec

A public urban green space running through Manhattan’s West Side

Created by converting a portion of an unused, elevated freight-rail line from the 1930s into vegetated park land

What?


Photograph by David Berkowitz

eftec

Photograph by David Berkowitz Photograph by Amiga - Commodore (Flikr.com)

Photograph by David Berkowitz Photograph by David Berkowitz


eftec

Where?


eftec

To increase the physical attractiveness of a 1.45 mile-long stretch of Manhattan’s West Side

To providing a unique open green space, with added benefits of increased property values and local investment

The evidence provided is based on comparison of the relevant indicators before and after the opening of the High Line, and comparison of the area surrounding it to other areas in the city.

Why?


eftec

A study published by the New York City Economic Development Corporation in 2011 found that before the High Line was completed, residential properties in the surrounding area were valued 8% below the overall median for Manhattan

From 2003-2011, property values near the park increased 103%, surpassing the NYC average (Moss, 2012; NYCEDC, 2011).

A press release from the Mayor of NYC in July 2011 stated that the population within the area surrounding the High Line Park had grown more than 60% from 2000-2010 (CoNY, 2011)

Contextual Change


eftec

The resulting value, as per the increase in property values, is estimated to be around US$900 million over the next 20 years (CoNY, 2011).

Since first opening to the public in June of 2009, the park has attracted more than 4 million visitors, of which half are estimated to be ‘out-of-town visitors’

Economic Impacts


eftec

Cheonggyecheon Stream Restoration Project


eftec

A large-scale river restoration project was completed (2003-2005)o The Cheonggyecheon River

was unearthed by demolishing the motorway that covered it

o Natural habitats were created along it to increase biodiversity

o Terraced river banks were built for pedestrian access

What?


eftec


Photograph by Francisco Anzola Photograph by Kyle Nishioka

Photograph by Justin De La Ornellas Photograph by Justin De La Ornellas

eftec

Where?


eftec

Number of businesses in the Cheonggyecheon area increased by 3.5% (2001 – 2003)o Double the rate of business growth in downtown Seoul

The stream attracts an average of 65,000 visitors daily 1,408 are foreign tourists, who contribute up to 2.1 billion won (£1.3

million) in visitor spending to the Seoul economy (Kim, et al., 2009).

Economic Impacts


eftec

The reduction of the urban heat island effect along the streamo Attributed to (Hwang, 2004):

• the removal of the paved motorway• cooling effect of the stream• increased vegetation• 2.2 -7.8% increase in wind speeds moving along the

corridor Increased air quality Mitigating the impact of wind-blocking from the area’s densely-built

urban environment

Other Impacts


New

York

• S

outh

Kore

a

eftec

Not all GI projects can deliver all the potential benefits, so 1. the benefits required in a given area should be identified2. the project should be designed specifically to deliver

them GI contributes to the resilience, and sustainability, of

economic growth in an area through reducing important risks such as flooding and the

urban heat island effect. As it can take time for the benefits to become reality, funds

should be available for both the initial outlay continued maintenance and improvement over time

Key Conclusions for Decision Makers

Objectives • Key Messages • Logic • Case Studies • Key Conclusions

eftec

Identify factors that will enable GI to deliver benefits and make them an integral part of a GI project. For example, the conditions too ensure physical and mental health benefits o improve the environmental quality benefits

The lack of robust evidence should not be seen as an obstacle. Through stakeholder engagement, better evidence will likely become available

With the available evidence, it is not possible to estimate the extent GI provides an additional contribution to national economic growth

Evidence that GI projects that are integrated with other projects (or strategies) are likely to o engage stakeholders o provide more benefits faster


eftec

The importance of GI to the attractiveness of cities and neighbourhoods to people and investors is relatively well understood by city planners and developers

The impact is measurable mostly at the local level o Before and after a GI investmento GI area compared to other areas

Any contribution on the national scale is very difficult to assess empirically in terms of: o Additionality (with and without)o Displacement (all areas)

Key Messages


eftec

Thank you!

Ece Ozdemiroglu Erin Gianferrara+44(0)2075805383 +44(0)[email protected] [email protected] www.eftec.co.uk

Applied Environmental Economics Conference (envecon) –14 March 2014, LondonUK Network for Environmental Economistswww.uknee.org.uk


mailto:[email protected]

mailto:[email protected]

http://www.eftec.co.uk/

http://www.eftec.co.uk/

http://www.uknee.org.uk/

eftec - ecosystems knowledge...the late 1980s to improve the park. within 10 years, commercial ......

Documents