Green Infrastructure – The Economic Benefits.

Martin Moss.

Natural England.

Senior Advisor – Green Infrastructure Operations England.

Why is GI of interest to you?

• A view from Cumbria.• Cumbria GI Investment Strategy – March 2014.• Cumbria LNP – GI Thematic Group.

• “Green Infrastructure is relevant to you because it involves every organisation that has an interest in Cumbria’s economy, environment and people. It provides wide-ranging benefits; from inward investment, to health and well-being. But it requires a co-ordinated approach from those organisations to realise its potential”.

• Conclusion – the benefits of GI are derived from working together – it’s a complex game.

Green Infrastructure – some key points.

• What is this thing called GI?

• Natural systems of infrastructure delivering ecosystem services.

• Ecological benefits – the Ecological Network.

• Community benefits – health and well-being, live-able places etc.

• Economic benefits – how natural environment helps support and deliver economic activity.

What do we mean by “economic benefits” ?

• We can talk about economic benefits in different ways.

• From an Economists perspective.

• From a general perspective.

An Economist Would Say …

• Benefits from environmental features are identified through logic chain analysis, or “theory of change”.

• But not all benefits behave the same.

• We can talk of “economic value” and “economic impact”.

Important distinction – what sort of economic benefit is it?

ECONOMIC VALUE ECONOMIC IMPACT

The effect of a change on the happiness and welfare of society, regardless of whether this effect is felt through the market.

The effect of a change on the size of the traded economy, commonly measured using GDP

Low impactHigh

value

A more general understanding – how do we get them?

• In a non-technical sense economic benefits are sometimes described as;

• Direct.• Indirect.• Cost reduction.• Risk management.

• Direct – cash economy – transactions for goods and services (requires interaction between green and business infrastructure).

• Indirect – societal values or supporting transactional economy.

• Cost reduction – reduction of heating / water bills, better resource efficiency (cost to profit).

• Risk management – eg reduced flood risks (profit to cost).

The evidence base – a bit of advertising.

• Extensive, increasing, multi-disciplinary – but still early days.

• Many research questions are being identified as gaps in understanding become apparent.

• BUT …• Natural England have

compiled a broad literature review.

• First published in 2012 – MEBIE 2 is due to be published soon.

• Thorough review of literature on the benefits of investment in the natural environment.

• Over 100 new pieces of evidence.

• Simplified format.

• New chapters on;• Consumer Spending, • Pollination and • Pest Control.

MEBIE 2.• Three key sections.

• Relating evidence (services) to significant themes (Social welfare, economic growth, climate change).

• Economic competitiveness.• Services provided by nature.

• Reflects the fact that interest can be either about a specific ecosystem service or broad societal interests.

Economic Competitiveness.

• Considers;

• Consumer spending;• House prices;• Labour productivity;• Regional investment;• Tourism and recreation.

Summary of findings (1)

Section Availability of evidence

Effect of natural environment

Economic competitiveness

Consumer spending Average Positive

House prices Good Positive*

Labour productivity Poor Unclear

Regional investment Good Positive

Tourism and recreation

Good Positive

KeyAvailability of evidence: Poor/Average/Good

Effect of natural environment: Positive/Negative/Unclear

*Locally negative effects have been observed for poorly maintained greenspaces, but on average the effect is positive.

Tourism and recreation

Many tourist and recreational activities are heavily driven by the natural environment. The economic value of these activities can be significant. •In 2012-13 there were an estimated 2.85 billion visits to the natural environment in England. Total expenditure was estimated at between £17.6 and £24.5 billion (Natural England 2013).

Labour productivity

Although plausible, there is a lack of evidence to suggest that the natural environment directly contributes to improvements in labour productivity.

It may contribute indirectly through improvements to worker health.

Specific services provided by nature – 1.

Section Availability of evidence

Effect of natural environment

Ecosystem services

Air quality Good Positive

Coastal flood risk management

Good Positive

Food, water and other provisions

Good Positive

Freshwater flood risk management

Good Positive

Global climate regulation

Good Positive

Mental health Good Positive

Specific services provided by nature – 2.

Section Availability of evidence

Effect of natural environment

Ecosystem services contd.

Noise Average Positive

Pest control Average Positive

Physical activity Good Unclear

Pollination Good Positive

Social cohesion Average Positive*

Temperature regulation

Good Positive

Water quality Good Positive

*Locally negative effects have been observed for poorly maintained greenspaces.

Air quality

Air pollution poses significant risks to human, plant and ecosystem health. Evidence is strong that vegetation, particularly trees, can contribute to air quality improvements.

•547 ha. of mixed greenspace within a 10 x 10 km square of East London could significantly reduce pollution with an estimated effect of two deaths and two hospital admissions avoided per year (Tiwary, Sinnett et al. 2009).

Coastal flood risk management

Coastal environments such as saltmarshes can provide effective flood protection as well as biodiversity and recreational benefits

Alkborough Flats is a managed re-alignment scheme on the Humber estuary. The sea wall was deliberately breached to allow flooding of former farmland. Cost benefit ratio was estimated at 1:2.72 (Everard 2009)

How can benefits be assessed ?

• An emerging discipline, still very early days.

• A range of existing toolkits.

• Tend to be either;• Broad ranging but lack

robustness.• Narrow range with higher

levels of robustness.

• NE review 2013.

• More work in progress.

• CAVAT: Capital Asset Value for Amenity Trees;

• Green Infrastructure NorthWest‟s Green Infrastructure Valuation Toolkit

• Guide to valuing Green Infrastructure from the Centre for Neighbourhood Technology Chicago;

• Health Economic Assessment Tool for walking and cycling (HEAT);

• Helliwell;• i-Tree Design;• i-Tree Eco;• i-Tree Streets, and• InVEST: Integrated Valuation of

Environmental Services and Tradeoffs.

Some tips.

• Results from more than one tool, you may not always be able to add the results together – different units and/or overlaps leading to double counting risk.

• Different tools have different purposes – use should be fit for your purpose - For example, CAVAT is designed to help estimate the financial compensation for damage to street trees. Therefore, it uses the cost of planting and maintaining a tree as its economic value. This is fit for the tool’s purpose but it is not fit for the purpose of cost benefit analysis.

• Where you feel you are not sure about the suitability, process and results of a tool, you should get in touch with an appropriate scientist and/or economist! The results of a tool are only ever as good as the quality of the data you use.

Further information.

• Key links;

• Available via NE website;

www.naturalengland.org.uk/ourwork/planningdevelopment/greeninfrastructure

• Micro-Economic evidence for the Benefits of Investment in the Environment.

• Green Infrastructure Valuation Tools Assessment.

• Green Infrastructure as a Catalyst for Economic Growth.

Thank You.