Valuing Urban Ecosystem Services: A Contingent Valuation Study on Street Trees in Oslo

Ecosystem services is a broad term for the welfare humans derive from nature. For a number of reasons – such as missing markets, externalities, undefined property rights, and lack of information - the ecosystem services and the natural structures that underlie them are not adequately accounted for in the economy. This is a problem because it can lead to a poor use of resources. This study is concerned with valuing street trees in Oslo. They provide a range of benefits to people living in the city, but their value is not fully accounted for in the economy. Population growth and densification of the city puts pressure on their existence in the city and on the municipality s budgets. It is important to document their value in order to ensure an urbanization that reflects people s preferences for street trees and the services they provide. Valuing urban ecosystem services is challenging because there are so many different preferences and ecosystem services in a small geographical area. It is a high context density environment. Many of the services are both complementary and substitute goods to other services. Figuring out how to value different urban ecosystem services is not a straightforward process. I have applied the contingent valuation method to estimate the value of Oslo s street trees. The data comes from an online web-survey on a representative sample carried out as part of the Oslo OpenNESS research project. The survey was designed to elicit the willingness to pay for a rise in the municipality s budget for street trees in order to maintain or increase today s level of street trees in respondents street. I estimated that the mean WTP for each household for maintenance or increase in street tree density to be 333 NOK per year, over the course of the next 15 years. Aggregating over the share of household population of Oslo this becomes almost 60 million NOK per year. I only extrapolated to the same share of households as the share of respondents that reported a WTP, I have not assumed anything about the share that did not report WTP. The policy relevance of this study is documenting the economic value generated by street trees in Oslo and defending their place in the city and on the municipality s budgets