The Benefits of Urban Green Spaces and Parks
Dr. Evangelo Damigos; PhD | Head of Digital Futures Research Desk
- Competitive Differentiation
- Sustainable Growth and Tech Trends
Publication | Update: Sep 2020
Almost two thirds of the urban area that will exist by the year 2030 is yet to be built, so it is vital that we take the opportunity to create and maintain healthy and sustainable urban environments.
Urbanization has brought about several undesirable environmental changes. As urbanization increases, this will inevitably change land cover, as natural surfaces are replaced by urban fabric. According to Citi GPS Report “Sustainable Cities: Beacons of light against the shadows of unplanned urbanization,” urban green spaces have become an essential element in any sustainable city model and should be seen as a fundamental part of urban infrastructure. They play a crucial role in improving the quality of living in urban areas as they provide a number of different benefits for the inhabitants such as health and well-being, a sense of community, healthier patterns of children’s play, etc. However when it comes to investment, parks do not generally get the same consideration as other urban infrastructure — the main reason for this is that they are undervalued.
According to Urban Espora research, the creation of an urban biodiversity layer is the solution to these problems, as they significantly contribute to the improvement of environmental conditions in cities in many ways:
- Green roofs act as sinks for CO2, the gas responsible for climate change. For each 100 square metres of green roof, the gas responsible for the greenhouse effect is reduced by 1.8 tonnes per year. In addition, installing 100 square metres of green roof on top of a building can produce the oxygen needed by 100 people in a year.
- The pollution emitted by 15 cars in a year can be removed by 100 square metres of green roof, since the leaves of the green roof plants can retain these harmful particles on their surface.
- Green spaces can reduce the ambient temperature of cities by 1°C, thus reducing the urban heat island and harmful city smog. In this sense, 1°C cooler urban environments prevent the harmful ozone layer that is triggered during intense heat episodes from forming.
- Another benefit of green roofs is that they retain 40% of rainwater. Also, they can delay water discharge by 18 minutes in episodes of intense rain, preventing the collapse of urban drainage systems.
According to the World Health Organization, urban green spaces are essential to human well-being, both physically and emotionally. This means that people living in cities with more parks and gardens have a better quality of life than those who live surrounded by high levels of pollution. According to the World Health Organization, between 10 and 15 square metres of green space per inhabitant are needed to ensure a healthy urban ecosystem.
Calculating the net benefits of urban parks is particularly difficult but over the last decade a number of studies have started to emerge that calculate this. A study undertaken by the Trust for Public Land for the Philadelphia Parks Alliance has estimated that the park system in Philadelphia provides the city with a revenue of $ 23 million per year, municipal savings of million per year, cost savings to citizens (direct use and health value) of .1 billion, and wealth increasing factors to citizens (property value increase from park proximity, and profit from tourism) of 9 million. The value far outweighs the cost of maintaining the parks with nearly 0 generated in economic value for spent on maintenance.156 The City of Edinburgh has also measured and valued the benefits from parks in the city.
They estimate that for every £1 invested around £12 of social, economic and environmental benefits are delivered by parks in the city. Vivid Economics in their study for Greater London Authority, National Trust, and Heritage Lottery Fund estimate that London public parks have a gross asset value in excess of £91 billion (5bn) — this represents 30 years value at £5 billion (bn) per year appropriately discounted.
Economic Value Provided by London’s parks
Vivid Economics state that the total value of avoided healthcare costs due to London greenspace totals £950 million per year. This is made up of reduced disease risk due to higher levels of physical activity (savings of £580 million/year) and improved mental health (savings of £370 million/year) due to access to parks. Other benefits of London parks includes the increase in value of housing prices in close proximity to parks — it’s estimated that for each hectare of green space located within a 1km radius, the average house prices are 0.08% higher.
They use this calculation to assess the total amenity value of parks in London. They also calculate the recreational value of parks estimated at £17 billion for London, which translates into an annual economic benefit of £930 million (.3bn) and £120/head/year. Environmental benefits are also included, i.e., the benefits of carbon storage and temperature regulation.
The World Health Organisation in their report on ‘Urban green spaces and health,’ highlight the health benefits of urban parks. In their conclusions they state that the evidence shows ‘that urban green space has health benefits, particularly for economically deprived communities, children, pregnant women and senior citizens. It is therefore essential that all populations have adequate access to green space, with particular priority placed on the provision for disadvantaged communities….the need for green space and its value for health and well-being is universal.’
Additionally, green spaces positively affect the behaviour of inhabitants. Urban parks build and develop relations between neighbours, strengthening community bonds and sense of identity.
Aesthetics can also change our perception of city life. Decorating a building with plants or grasses not only enriches the existing architecture, but also offers an attractive space for people who spend a lot of time in the building, boosting creativity and encouraging innovation.
In this regard, there are many psychological benefits to greener cities. For example, vertical gardens, green roofs and parks increase a city’s attractiveness, since people perceive them to have a better quality of life and healthier and more sustainable spaces.
Objectives and Study Scope
This study has assimilated knowledge and insight from business and subject-matter experts, and from a broad spectrum of market initiatives. Building on this research, the objectives of this market research report is to provide actionable intelligence on opportunities alongside the market size of various segments, as well as fact-based information on key factors influencing the market- growth drivers, industry-specific challenges and other critical issues in terms of detailed analysis and impact.
The report in its entirety provides a comprehensive overview of the current global condition, as well as notable opportunities and challenges.
The analysis reflects market size, latest trends, growth drivers, threats, opportunities, as well as key market segments. The study addresses market dynamics in several geographic segments along with market analysis for the current market environment and future scenario over the forecast period.
The report also segments the market into various categories based on the product, end user, application, type, and region.
The report also studies various growth drivers and restraints impacting the market, plus a comprehensive market and vendor landscape in addition to a SWOT analysis of the key players. This analysis also examines the competitive landscape within each market. Market factors are assessed by examining barriers to entry and market opportunities. Strategies adopted by key players including recent developments, new product launches, merger and acquisitions, and other insightful updates are provided.
Research Process & Methodology
We leverage extensive primary research, our contact database, knowledge of companies and industry relationships, patent and academic journal searches, and Institutes and University associate links to frame a strong visibility in the markets and technologies we cover.
We draw on available data sources and methods to profile developments. We use computerised data mining methods and analytical techniques, including cluster and regression modelling, to identify patterns from publicly available online information on enterprise web sites.
Historical, qualitative and quantitative information is obtained principally from confidential and proprietary sources, professional network, annual reports, investor relationship presentations, and expert interviews, about key factors, such as recent trends in industry performance and identify factors underlying those trends - drivers, restraints, opportunities, and challenges influencing the growth of the market, for both, the supply and demand sides.
In addition to our own desk research, various secondary sources, such as Hoovers, Dun & Bradstreet, Bloomberg BusinessWeek, Statista, are referred to identify key players in the industry, supply chain and market size, percentage shares, splits, and breakdowns into segments and subsegments with respect to individual growth trends, prospects, and contribution to the total market.
Research Portfolio Sources:
Global Business Reviews, Research Papers, Commentary & Strategy Reports
M&A and Risk Management | Regulation
The future outlook “forecast” is based on a set of statistical methods such as regression analysis, industry specific drivers as well as analyst evaluations, as well as analysis of the trends that influence economic outcomes and business decision making.
The Global Economic Model is covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure. We aim update our market forecast to include the latest market developments and trends.
Review of independent forecasts for the main macroeconomic variables by the following organizations provide a holistic overview of the range of alternative opinions:
As a result, the reported forecasts derive from different forecasters and may not represent the view of any one forecaster over the whole of the forecast period. These projections provide an indication of what is, in our view most likely to happen, not what it will definitely happen.
Short- and medium-term forecasts are based on a “demand-side” forecasting framework, under the assumption that supply adjusts to meet demand either directly through changes in output or through the depletion of inventories.
Long-term projections rely on a supply-side framework, in which output is determined by the availability of labour and capital equipment and the growth in productivity.
Long-term growth prospects, are impacted by factors including the workforce capabilities, the openness of the economy to trade, the legal framework, fiscal policy, the degree of government regulation.
Direct contribution to GDP
The method for calculating the direct contribution of an industry to GDP, is to measure its ‘gross value added’ (GVA); that is, to calculate the difference between the industry’s total pretax revenue and its total boughtin costs (costs excluding wages and salaries).
Forecasts of GDP growth: GDP = CN+IN+GS+NEX
GDP growth estimates take into account:
All relevant markets are quantified utilizing revenue figures for the forecast period. The Compound Annual Growth Rate (CAGR) within each segment is used to measure growth and to extrapolate data when figures are not publicly available.
Our market segments reflect major categories and subcategories of the global market, followed by an analysis of statistical data covering national spending and international trade relations and patterns. Market values reflect revenues paid by the final customer / end user to vendors and service providers either directly or through distribution channels, excluding VAT. Local currencies are converted to USD using the yearly average exchange rates of local currencies to the USD for the respective year as provided by the IMF World Economic Outlook Database.
Industry Life Cycle Market Phase
Market phase is determined using factors in the Industry Life Cycle model. The adapted market phase definitions are as follows:
The Global Economic Model
The Global Economic Model brings together macroeconomic and sectoral forecasts for quantifying the key relationships.
The model is a hybrid statistical model that uses macroeconomic variables and inter-industry linkages to forecast sectoral output. The model is used to forecast not just output, but prices, wages, employment and investment. The principal variables driving the industry model are the components of final demand, which directly or indirectly determine the demand facing each industry. However, other macroeconomic assumptions — in particular exchange rates, as well as world commodity prices — also enter into the equation, as well as other industry specific factors that have been or are expected to impact.
Forecasts of GDP growth per capita based on these factors can then be combined with demographic projections to give forecasts for overall GDP growth.
Wherever possible, publicly available data from ofﬁcial sources are used for the latest available year. Qualitative indicators are normalised (on the basis of: Normalised x = (x - Min(x)) / (Max(x) - Min(x)) where Min(x) and Max(x) are, the lowest and highest values for any given indicator respectively) and then aggregated across categories to enable an overall comparison. The normalised value is then transformed into a positive number on a scale of 0 to 100. The weighting assigned to each indicator can be changed to reﬂect different assumptions about their relative importance.
The principal explanatory variable in each industry’s output equation is the Total Demand variable, encompassing exogenous macroeconomic assumptions, consumer spending and investment, and intermediate demand for goods and services by sectors of the economy for use as inputs in the production of their own goods and services.
Elasticity measures the response of one economic variable to a change in another economic variable, whether the good or service is demanded as an input into a final product or whether it is the final product, and provides insight into the proportional impact of different economic actions and policy decisions.
Demand elasticities measure the change in the quantity demanded of a particular good or service as a result of changes to other economic variables, such as its own price, the price of competing or complementary goods and services, income levels, taxes.
Demand elasticities can be influenced by several factors. Each of these factors, along with the specific characteristics of the product, will interact to determine its overall responsiveness of demand to changes in prices and incomes.
The individual characteristics of a good or service will have an impact, but there are also a number of general factors that will typically affect the sensitivity of demand, such as the availability of substitutes, whereby the elasticity is typically higher the greater the number of available substitutes, as consumers can easily switch between different products.
The degree of necessity. Luxury products and habit forming ones, typically have a higher elasticity.
Proportion of the budget consumed by the item. Products that consume a large portion of the consumer’s budget tend to have greater elasticity.
Elasticities tend to be greater over the long run because consumers have more time to adjust their behaviour.
Finally, if the product or service is an input into a final product then the price elasticity will depend on the price elasticity of the final product, its cost share in the production costs, and the availability of substitutes for that good or service.
Prices are also forecast using an input-output framework. Input costs have two components; labour costs are driven by wages, while intermediate costs are computed as an input-output weighted aggregate of input sectors’ prices. Employment is a function of output and real sectoral wages, that are forecast as a function of whole economy growth in wages. Investment is forecast as a function of output and aggregate level business investment.