Valuing the benefits of creek rehabilitation: building a business case for public investments in urban green infrastructure.

In an effort to increase the livability of its cities, public agencies in Australia are investing in green infrastructure to improve public health, reduce heat island effects and transition toward water sensitive urban design. In this paper, we present a simple and replicable approach to building a business case for green infrastructure. This approach requires much less time and resources compared to other methods for estimating the social and economic returns to society from such investments. It is a pragmatic, reasonably comprehensive approach that includes socio-demographic profile of potential users and catchment analysis to assess the economic value of community benefits of the investment. The approach has been applied to a case study area in the City of Brimbank, a western suburb of Greater Melbourne. We find that subject to a set of assumptions, a reasonable business case can be made. We estimate potential public benefits of avoided health costs of about AU$75,049 per annum and potential private benefits of AU$3.9 million. The project area is one of the most poorly serviced areas in the municipality in terms of quality open spaces and the potential beneficiaries are from relatively low income households with less than average health status and education levels. The values of cultural (recreational benefits, avoided health costs, and increased property values) and regulating (reduction in heat island effect and carbon sequestration) ecosystem services were quantified that can potentially offset annual maintenance costs.

Ecosystem services in urban water investment.

Increasingly, water agencies and utilities have an obligation to consider the broad environmental impacts associated with investments. To aid in understanding water cycle interdependencies when making urban water supply investment decisions, an ecosystem services typology was augmented with the concept of integrated water resources management. This framework is applied to stormwater harvesting in a case study catchment in Adelaide, South Australia. Results show that this methodological framework can effectively facilitate systematic consideration and quantitative assessment of broad environmental impacts of water supply investments. Five ecosystem service impacts were quantified including provision of 1) urban recreational amenity, 2) regulation of coastal water quality, 3) salinity, 4) greenhouse gas emissions, and 5) support of estuarine habitats. This study shows that ignoring broad environmental impacts can underestimate ecosystem service benefits of water supply investments by a value of up to A$1.36/kL, or three times the cost of operating and maintenance of stormwater harvesting. Rigorous assessment of the public welfare impacts of water infrastructure investments is required to guide long-term optimal water supply investment decisions. Numerous challenges remain in the quantification of broad environmental impacts of a water supply investment including a lack of peer-reviewed studies of environmental impacts, aggregation of incommensurable impacts, potential for double-counting errors, uncertainties in available impact estimates, and how to determine the most suitable quantification technique.

A framework for considering externalities in urban water asset management.

Urban communities rely on a complex network of infrastructure assets to connect them to water resources. There is considerable capital investment required to maintain, upgrade and extend this infrastructure. As the remit of a water utility is broader than just financial considerations, infrastructure investment decisions must be made in light of environmental and societal issues. One way of facilitating this is to integrate consideration of externalities into decision making processes. This paper considers the concept of externalities from an asset management perspective. A case study is provided to show the practical implications to a water utility and asset managers. A framework for the inclusion of externalities in asset management decision making is also presented. The potential for application of the framework is highlighted through a brief consideration of its key elements.