Faculty Mentor: Matthew Fry (Environmental & Sustainability Studies, University of Utah)

Abstract

Trees provide many benefits to cities, but urban forestry programs are often under supported. To understand why, we asked key stakeholders how they approach valuing trees. We found that the current system is incomplete and leads to economically inefficient outcomes. This project is in its very early stages, and we hope to have a more comprehensive review of approaches and possible solutions in the future.

Introduction 

Money might not grow on trees, but in an urban environment the return on investment for planting and properly caring for a tree means that they are valuable indeed. Trees provide ecosystem services like removing pollution, reducing energy use, capturing stormwater, and reducing urban heat island effects (see for example Nowak 2017). They increase property values and reduce crime (Dimke, Sydnor, and Gardner 2013; Donovan and Prestemon 2012). Perhaps most dramatically, a growing body of literature shows the huge health benefits of trees to people living near them (Donovan et al. 2022). Given these services it might be hoped that cities would invest in trees to increase the wellbeing of their citizens. All too often, however, urban forestry is the last department to receive funding – or the first to see its budget cut when times are tight. The causes for this mismatch between benefits and investment are complex. This study examines one potential cause: a disjointed valuation system that fails to fully account for the benefits of urban trees. While non-market valuations are by nature imprecise – and municipal policy makers must also consider cultural, emotional, and socio-economic elements tied to trees – current methods lead to inefficient outcomes.

Methods

During summer 2024, we talked with over fifty individuals involved in urban forestry, from city arborists and urban foresters to tree care professionals, nonprofit executives, and state officials. Contact with potential participants was made initially through publicly available phone numbers or emails on government websites and in subsequent rounds through snowball sampling. Interviews were conducted on Zoom, which was set to transcribe the conversations. This research is only a small element of a much larger project. While many topics were covered with participants, we consistently asked them how the valuation of public trees came up in their work.

Results

How cities value their trees can generally be split into two broad categories. The first, which is codified and meant to be legally defensible, are appraisals based on the replacement cost method. This approach is generally used when developers wish to remove trees or to assess damages – for example when a drunk driver hits a tree, or someone decides to improve their view without obtaining a permit. Appraisals are conducted by certified arborists and either based on some industry-approved standard such as the latest Guide for Plant Appraisal or costs per caliper-inch diameter at breast height (dbh) as mandated in the city code. If using the Guide, arborists most often follow the “Trunk Formula Technique” which extrapolates the cost of purchasing the largest available nursery tree to the size of the tree being appraised (Guide for Plant Appraisal 2019). In either case, the monetary value reached is based on the principle of replacement costs – how much would be required to replant the killed or damaged tree. This might make sense for small, recently planted trees, but it has little theoretical basis for mature trees that could not be transplanted. For example, six two-inch dbh trees do not equal one 12-inch dbh tree in any meaningful way: the benefits provided by trees increase exponentially as they grow. As one interview participants noted, “Trees are the only city asset that appreciates in value rather than depreciate.” More theoretically, basing the value of anything off datapoints so far into one extreme of its possible characteristics is bound to lead to unrealistic conclusions.

The other approach is to use a tool like i-Tree which takes a tree inventory or survey and extrapolates to ecosystem services and from there to monetary values. i-Tree estimates values for a few limited ecosystem services: air filtration, stormwater interception, carbon sequestration, and energy cost reduction (Nowak 2021). While this approach is supposed to reach a more complete value of the urban forest, it is not statistically defensible and is ultimately used only for education, awareness, and grant writing.

So why are urban forestry programs often so underfunded? Partially this has to do with the inherent difficulties involved in any non-market valuation, and the lack of any tool to estimate certain services; neither replacement value assessments nor i-Tree reach values for what research has shown to be some of the largest benefits of trees in monetary terms, such as their effects on property values or health outcomes. It is also because the benefits of trees are cumulative. While the benefits of any single individual tree to a property owner may not be large, the externalities of all neighborhood trees in combination are massive. This can be a hard argument for a homeowner to swallow when the costs are immediate and localized to their land, creating a classic example of the under-supply of a public good. This is economist-speak for when the benefits of adding an additional unit would outweigh the costs to society, yet that transaction does not take place – effectively leaving unrealized benefits on the table.

The entire purpose of a government is to provide those goods which would otherwise be supplied at a level below the social optimum. Unfortunately, when it comes to trees, a lack of accurate information on their true benefits makes determining the optimal level difficult. This makes it all too easy to defer investment in urban forestry in favor of other city departments like police and fire where outcomes can be easily measured.

Discussion

More scientific evidence for the value of trees might go a ways towards encouraging increased investment in urban forestry, but the fact is that the evidence already exists. The values might be uncertain by an order of magnitude, but even on the extreme low end of the confidence interval they far outweigh any costs of the program. Governments need to recognize that trees are a community asset, and fully accept the costs of their maintenance and removal, at the very least in rights-of-way. Since a majority of any given urban forest is on private land, governments will also need to find ways to influence the behavior of their citizens if they want to grow their canopy. A common challenge among cities is pressure from developers to build on green field lots. Integrating values for ecosystem services into the appraisal process might encourage tree preservation during the construction process.

This research is only in its very early stages. We plan to continue to conduct interviews and begin analyzing our data in the coming months.

References

Dimke, Kelley C., T. Davis Sydnor, and David S. Gardner. 2013. “The Effect of Landscape Trees on Residential Property Values of Six Communities in Cincinnati, Ohio.” Arboriculture & Urban Forestry (AUF) 39 (2): 49–55. https://doi.org/10.48044/jauf.2013.007.

Donovan, Geoffrey H., and Jeffrey P. Prestemon. 2012. “The Effect of Trees on Crime in Portland, Oregon.” Environment and Behavior 44 (1): 3–30. https://doi.org/10.1177/0013916510383238.

Donovan, Geoffrey H., Jeffrey P. Prestemon, Demetrios Gatziolis, Yvonne L. Michael, Abigail R. Kaminski, and Payam Dadvand. 2022. “The Association between Tree Planting and Mortality: A Natural Experiment and Cost-Benefit Analysis.” Environment International. 170(8): 107609. 170:107609. https://doi.org/10.1016/j.envint.2022.107609.

Guide for Plant Appraisal. 2019. 10th Revised. International Society of Arboriculture.

Nowak, David J. 2017. “Assessing the Benefits and Economic Values of Trees.” In Routledge Handbook of Urban Forestry. Routledge. ———. 2021. “Understanding I-Tree: 2021 Summary of Programs and Methods.” NRS-GTR-2002021. Madison, WI: U.S. Department of Agriculture, Forest Service, Northern Research Station. https://doi.org/10.2737/NRS-GTR-200-2021.