Quantifying The Economic Value Of Trees To Cities

It’s a lot—and a new tool called i-Tree can calculate how many trees a city has and put a dollar amount on how much they’re making life better.

What’s the value of a tree?

David Nowak thinks he knows. For the last 20 years, he’s been counting and analyzing trees in several cities (Oakland, Chicago, Baltimore, Philadelphia, Boston). And now he’s leading an effort to standardize tree valuation.

The U.S. Forest Service’s i-Tree platform calculates a city’s "leaf surface area," and gives trees an economic value, from the environmental services they provide. How much carbon stored? How much ozone, nitrogen, particulates, removed? What’s the health impact? The effect on building heating/cooling costs? Hydrology?

"Most of these are in tons or parts per billion, and have a dollar value associated with them," says Nowak, who heads USFS’s Northeastern research unit. "If you buy a tree, you are affecting the environment—the carbon, air, water, UV. We show the costs and benefits of changing the structure of our cities through vegetation."

i-Tree simulates a city’s trees using data from sampled areas (size, species, health). It brings in local weather and pollution data, and maps the trees across the city. It then computes the values based on official sources (like the U.S. government’s 2010 "Greenhouse Gas Reporting Valuation," which prices carbon at $78 a metric ton).

New York, for example, has 876,000 trees, covering 23.1% of the city. They provide $11.2 million in annual energy savings, have a carbon sequestration value of $386,000, and a pollution removal value of 836,000. (Their asset value—what they would cost to replace—is much higher).

Nowak says the tool is important for two reasons. "One, it puts trees on a par with other items [on the budget], in terms of economics. But more importantly, it lets us understand what’s out there, and understand its importance. We see trees all the time, we just haven’t quantified them."

i-Tree is free to use, and there is now a mobile version (allowing you to input data remotely). Nowak’s team has also built versions for Canada and Australia, and is talking with other countries.

Nowak says the service has helped people make the case for trees more successfully: "There are lots of success stories of people going to their mayor and having information to back up why trees are important. Instead of just saying 'we like them.'"

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  • Piper Huggins

    How could I use this brilliant work to go about calculating the value of a lot (1000m2) of 30 trees that are for the most part over one hundred years old and 7 stories tall in downtown Montreal? (It is within 40 metres of 2 major intersections and a very densely populated neighbourhood near McGill University). The land is worth over 2 M$ to a local condo developer who plans on cutting them all down to build 37 units - surely the trees are worth more alive, no?

  • iceberg


    The Socialist Tree Calculation
    While the headline of a recent New York Times article employs a subjectivist notion of value, “Maybe Only God Can Make a Tree, but Only People Can Put a Price on It”, the article makes it clear that the concept of price formation is something less well understood in the so-called paper of record.Witness how the tree prices were derived:Step 1 was a tree census, a two-year process that sent more than 1,000 volunteers to count every tree on every street in the city. The census results were then fed into a computer program that spit out a dollar value for each of the 592,130 trees counted, a figure that does not include the roughly 4.5 million trees in parks and on private land…
    It takes into account several factors, including a tree’s impact on local property values, its contribution to cleaning the air by absorbing carbon dioxide, and how much its shade helps reduce energy consumption.
    Factoring in the costs associated with planting and upkeep, New York City’s street trees provide an annual benefit of about $122 million, according to the Parks Department. The study concludes that New York receives $5.60 in benefits for every dollar spent on trees.But wait just a second– how does a computer program determine the price for the trees? I’m reminded of Gary Galles’s article “And Then a Miracle Occurs.” Much like the cartoon professor who uses that phrase as a stage in a mathematical proof, the “price-calculating” black-box could only invoke some arbitrary determination based on of what the historical market demand has been for street-side trees.Now although the city government presumingly pays market prices to private contractors for the planting and maintenance of these trees, the notion of these trees now having a determinable market value or price is quite meaningless without a market to set them. To further ascribe the role these trees play in property valuations is an empty consideration without the knowledge of what opportunities were forgone with their planting. Thus is the nature of the socialist beast.The root of this problem  was brought up by Ludvig von Mises over 80 years ago in a series of articles beginning in 1920, shortly thereafter culminated into his Socialism: An Economic and Sociological Analysis in 1922, and later in his treatise Human Action.Lacking both omniscience and a market to determine the value individuals place on trees, planners cannot determine the opportunity cost that the trees represent, making any monetary calculation of the benefits provided a worthless spectacle of ignorance on stilts.

  • Rahul KM

    The idea is really great as many people want to live a sustainable lifestyle but they don't know how much they are contributing. Due to the lack of data, they tend to think that an individual cannot really make any difference. But services like these will make it easier for the institutions to assess the impact of their labors.