Planning, Design and Implementation
Edited by Danielle Sinnett, Nicholas Smith and Sarah Burgess
Chapter 4: Putting economic values on green infrastructure improvements
In order to justify investment in green infrastructure, project sponsors will often need formal appraisal of the benefits. Economic appraisal is attractive because it is influential and can provide a value for money assessment. Economic impact appraisal measures only the contribution that a project makes to economic growth. This approach will significantly understate the benefits of the project because most of the benefits of green infrastructure are non-market. Economists use cost–benefit analysis (CBA) to assess value for money and CBA can include non-market benefits, giving them a financial proxy value. However, it can only extend as far as hypothetical markets and has difficulty picking up more subtle improvements, such as reducing isolation or improving mental health. Using economic appraisal tools in this way implicitly takes on neoclassical economics’ critical assumptions. In reality the economy is a subset of the wider earth system and has numerous critical dependencies on it. By extension cities are dependent on their wider environment for survival. This means that strategic sustainability concerns must be addressed within a broader strategic framework, and it is only within, and limited by, such a framework that economic appraisal tools can support sustainable decision-making.
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