Green Roof Valuation: A Probabilistic Economic Analysis of Environmental Benefits

By CostBenefit on Sep 24, 2007 | In General, Air, Water, Energy, Climate Change GHG Carbon CO2, Green Buildings, Academic Study/Journal Article, Green Roofs, Midwest, Savings, Cost-Benefit Analysis, Costs and Benefits

Link: http://www.erb.umich.edu/News-and-Events/colloquium_papers/Clarketal.pdf

Green (vegetated) roofs have gained global acceptance as a technology that has the potential to help mitigate the multifaceted, complex environmental problems of urban centers. While policies that encourage green roofs exist at the local and regional level, installation costs remain at a premium and deter investment in this technology. The objective of this paper is to quantitatively integrate the range of stormwater, energy, and air pollution benefits of green roofs into an economic model that captures both the building-specific and city scale implementation.

Currently, green roofs are mainly valued based on increasing the roof longevity and their ability to reduce stormwater runoff, with occasional consideration of reducing building energy consumption. Proper valuation of these benefits can reduce the present value of a green roof if investors look beyond the upfront capital costs. In this paper a net present value (NPV) analysis comparing a conventional roof system to a green roof system demonstrates that at the end of the green roof’s lifetime the NPV for the green roof is less than the NPV for the conventional roof.

Increasing evidence suggests that green roofs may play a significant role in urban air quality improvement. For example, public health benefits per metric ton of NOx reduction are estimated to range from $1,683 to $6,383. These benefits were included in this study, and results indicate that this translates to an annual benefit of $895 to $3392 for a 2,000 square meter vegetated roof.

Improved air quality leads to a mean NPV for the green roof that is 25% to 29% less than the mean conventional roof NPV. This study also assessed large-scale roof greening within the Detroit and Chicago metropolitan areas. Greening ten percent of metropolitan roofs would result in 1.53E4 to 1.85E4 Mg of NOx reduction (from direct and indirect uptake) reducing annual public health costs between $25.8 million to $97.7 million in Detroit and between $31 million to $118 million in Chicago. Through innovative policies, the inclusion of air pollution mitigation and the reduction of municipal stormwater infrastructure costs in economic valuation of environmental benefits of green roofs can reduce the cost gap that currently hinders US investment in green roof technology.

by Corrie Clark 1, Peter Adriaens 2, F. Brian Talbot 1
1. University of Michigan
2. University of Michigan; adriaens@umich.edu

University of Michigan ERB Institute for Global Sustainable Enterprise www.erb.umich.edu
http://www.erb.umich.edu/News-and-Events/colloquium_papers/Clarketal.pdf

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