The economic impacts of green and blue infrastructure: a long-term view

GCHU Intern Hope Steadman, an MSc Nature, Society and Environmental Governance student at the University of Oxford, discusses the economic impact of GBI (green and blue infrastructure).

Hope Steadman

GCHU Intern and MSc Nature, Society and Environmental Governance student, University of Oxford

Email: [email protected]

Green and blue infrastructure (GBI) is typically used to describe a set of practices which aim to reduce surface water runoff, increase biodiversity, and achieve ecosystem connectivity and climate change adaptation. In recent years, UK proposals for GBI have increased through the government’s new 25 Year Environment Plan, and a burgeoning interest from planners, developers and environmental groups.

And yet a recent study has found a historic reluctance to support GBI projects in the UK. Investors can be dissuaded by the high upfront costs of implementation, maintenance costs and long payback periods. In an assessment of GBI in Oslo, it was found some green/blue strategies’ return on investment period was as high as 14 years, while green roofs did not prove to be value for money even after 30.

Taking a longer-term view of both direct and indirect benefits of GBI however, shows an unmistakably positive economic future. GBI can create job opportunities, increase property values and generate profits from ecotourism. A neighbourhood garden in New York City was found to increase the value of nearby properties by 9%, while in Manchester, UK, willingness-to-pay for urban greening amounted to (up to) an extra £3 million in council tax revenues a year. Other benefits of green developments can include reduced building insurance owing to the reduced risk of flood damage, and long-term brand enhancements for private developers.

While studies agree on the difficulties in monetising the intrinsic and intangible values of nature, several sophisticated modelling techniques have recently been used to account for the environmental and social services that GBI can provide. One of the most common uses of GBI is in the reduction of surface runoff from stormwater, reducing the costly impacts of flood damage in an increasingly extreme climate. In Lao, for example, wetlands are used to absorb floodwater, which has reduced damages of around $5 million every year. Another study of green roofs used for flood risk management however, found further benefits including a 12% energy saving thanks to better building insulation. GBI can create water savings of 23%, provide carbon sequestration services and improve water quality, reducing treatment plant costs.

Alongside environmental services, GBI can deliver socio-cultural value, such as improving physical and mental health, and providing spaces for recreation and education. Green infrastructure implementation in the City of Philadelphia was found to reduce respiratory illnesses and premature deaths, estimated to be worth $130 million in avoided healthcare costs over 40 years. In the UK alone, a 1% reduction in sedentary people is said to be worth £1.4 billion, of which 17% is a direct saving to the NHS. This could be vital during times of recession and efficiency cuts.

It’s worth noting, however, that the economic value of GBI is inherently dependent on the choice of infrastructure, and the scale and context of implementation. A study in Maryland highlights how rain gardens are cost-efficient at the household scale, while wet or dry basins prove to be more suitable for the watershed level. Stakeholder engagement and collaborative governance is further important to increase the efficiency of GBI.  The implementation of rain gardens was found to be 42% more cost-efficient than traditional water treatment in a Cincinatti case study, thanks to maintenance costs mostly being absorbed by homeowners engaged with the project. Local costs and availability of land, labour and funding streams must also be considered in future GBI proposals. Nevertheless, the evidence shows that overall GBI produces significant benefits in terms of supporting the economy, providing environmental services and social amenities. Studies considering the whole lifecycle of GBI have found cost-benefit ratios of up to 17.3, with GBI up to 50% less costly than grey alternatives, demonstrating the material value that investors and economies could benefit from. While short-term gains may seem small, the multiple direct and indirect benefits of GBI perpetuate a substantial long-term economic impact.