Insurers pave a paradisical parking lot
In Combating Canada’s Rising Flood Costs, a new Insurance Bureau of Canada (IBC) report, researchers said Canada should adopt a novel economic calculation model to determine whether “green infrastructure” can be justified. The model is based on a concept known as “total economic valuation.”
Green infrastructure proposals, while popular in some circles, have been sharply criticized by engineers and municipal government officials. The Ontario Society of Professional Engineers last April told provincial officials that it sees a rising tide of green infrastructure costs offset by imagined benefits that, in the end, will do little to improve flood control and prevention. That seems highly likely given the number stretching and concept-massaging behind the application of total economic valuation (TEV).
One example of total green infrastructure valuation in the report is a plan developed by Ontario’s Metrolinx, a provincial transit agency. In 2017, Metrolinx commissioned the consulting giant PricewaterhouseCoopers Canada (PwC) to perform a TEV for the greening of an existing 600-car parking lot at a suburban rail station in Brampton, a Toronto suburb.
The PwC report described TEV as a process by which the costs and benefits of a parking lot can be evaluated through the application of “natural” and “social” capital accounting, rather than the usual hard-dollar capital valuation techniques. The objective is to achieve “sustainability goals” by helping Metrolinx make “informed decisions” about climate vulnerability and risk within the planning system.
The PwC report, using concepts developed by the U.S. Environmental Protection Agency under the Obama administration, estimated the total net present value 60-year cost of building and operating a traditional grey asphalt parking lot for 600 cars at $2.32 million. The green version was marginally higher at $2.34 million.
After a series of social and environmental benefit manipulations, PwC concluded that a green parking lot — with surrounding trees, bushes, bioswales (drainage channels) and other environmental accoutrements, including a decidedly unnatural underground water storage tank — would yield in benefits of about $225,800.
The benefits come with dollar figures attached, although no real dollars change hands. Among the benefits, measured in present-value dollars:
$90,000 from an increase in “ambiance value” over the years, which is an estimate of the added enjoyment parking lot users will experience from the visible components of the green infrastructure;
$6,500 from carbon sequestration as new trees and plants absorb carbon through their stems, trunks, branches or root systems, thereby acting as “carbon sinks” based on a “social cost of carbon” of $155 a tonne;
$30,050 from reductions in air and water pollutants calculated on the basis of the social cost of particulate matter, SO2, NOx, nitrogen and other chemicals that would be absorbed by the parking lot’s plants and trees;
$80,600 from reduced flood risk, on the assumption that more water would be absorbed by the green surrounding the parking lot and by the storage tank (which we should note is technically old-fashioned, non-green grey infrastructure);
$10,800 from reduced “heat island effect,” because the bushes and trees surrounding the parking lot will absorb heat while the asphalt they replace would reflect heat back and make the surroundings more unpleasant;
$23,060 from an increase in real estate prices in the surrounding neighbourhood based on the perception of increased flood control, cleaner air and more pleasant ambiance.
Once the financial costs of $17,065 are subtracted, the $225,800 in social benefits make the case for building a parking lot that is green rather than the traditional grey, according to PwC.