The economic costs and benefits of nature-based solutions
This report from the RSPB and Cambridge Econometrics assesses the broad costs and benefits of restoring peatland, salt marsh and woodland in the UK for climate change mitigation. The review finds positive benefit-cost ratios for restoration across all three habitats, and indicates large job creation opportunities, making a case for restoration at scale both for meeting net zero targets and as part of a green COVID recovery.
Peatland restoration is expected to generate the greatest economic and social benefits per £1 invested. Conversely, salt marsh restoration could create the most jobs per hectare under restoration. However, the cost-benefit analyses (CBA) are only based on a limited number of ecosystem services (primarily carbon sequestration). The report emphasizes that CBA alone is poorly suited to support investment decisions in NbS. Therefore, the report also quantifies job creation benefits and gross value added (GVA), and provides additional assessments to incorporate a broad array of benefits. This supports more holistic economic impact assessments. The study emphasizes that the restoration of all three habitat types would have substantial social and economic benefits beyond those that can be readily monetized, such as improving water quality, reducing flood risk, and regulating air temperature. Additionally, substantially higher environmental, economic and social benefits could be derived by undertaking the right project, in the right place.
The results for each habitat are summarised as follows:
- Every £1 invested in restoration is expected to generate £4.62 of economic and social benefits (through carbon sequestration and recreation).
- 3 temporary jobs expected to be created for every 100ha of habitat under restoration.
- Ongoing maintenance of restored peatland is expected to generate £321,000 in GVA in the economy per 100ha of habitat over 100 years.
- Non-monetised benefits include: enhanced water quality, reduced flood risk, improved biodiversity and preservation of ecological and archaeological sites.
- Every £1 invested in restoration is expected to generate £1.31 of economic and social benefits (through carbon sequestration).
- 14-74 temporary jobs expected to be created for every 100ha of habitat under restoration.
- Restoration is expected to generate £880,000-£4,800,000 in GVA per 100ha of restored habitat.
- Non-monetised benefits include: enhanced water quality, fish nursery provision, improved biodiversity and reduced flood risk.
- Every £1 invested in afforestation is expected to generate £2.79 of economic and social benefits (through carbon sequestration, recreation, air pollution removal and timber and biofuel production, and biodiversity support).
- 25 temporary jobs expected to be created for every 100ha during the tree planting stage.
- Ongoing maintenance of woodland is expected to generate £314,000 in GVA per 100ha of planted woodland, over 100 years.
- Non-monetised benefits include: enhanced water quality, noise mitigation, temperature regulation, reduced flood risk and improved biodiversity.
Read the full report here.