The green infrastructure valuation toolkit user guide

Building natural value for sustainable economic development: the green infrastructure valuation toolkit user guide
Glossary
Mt – million tons
tC – tons of carbon
CO 2e - equivalent carbon dioxide
Discounted cash flow analysis: a way of estimating the value of an investment in
today’s money by adjusting future returns to get their present value.
Discount rate: (*) the rate used to reduce future benefits and costs to their presenttime
equivalent.
Ecosystem approach: (*) a strategy for the integrated management of land, water and
living resources that promotes conservation and sustainable use in an equitable way.
An ecosystem approach is based on the application of appropriate scientific
methodologies focused on levels of biological organization, which encompass the
essential structure, processes, functions and interactions among organisms and their
environment.
Ecosystem services: (*) the goods or services provided by the ecosystem to society.
In order for an ecosystem to provide services to humans, some interaction with, or
demand from, people for the good or service concerned is required.
Environmental Valuation Reference Inventory (EVRI): a comprehensive storehouse
of over 2,000 international studies providing values, methodologies, techniques and
theories on environmental valuation. https://www.evri.ca/Global/Splash.aspx
Externalities: (*) uncompensated side effects of human actions. For example, if a
stream is polluted by runoff from agricultural land, the people downstream experience a
negative externality.
Indices of Multiple Deprivation (IMD): composite indices developed by the Office of
National Statistics to identify areas of multiple deprivation. Levels of deprivation are
measured for a number of separate dimensions or 'domains' such as income,
employment, education and health. These dimensions, sometimes referred to as
'domains' are then aggregated to provide an overall measure of multiple deprivation
and each individual area is allocated a deprivation rank and score. The indices are
used to help target policies and funding, and reinforce a common goal to improve the
quality of life in disadvantaged communities.
Long run marginal cost: this refers to the cost of providing an additional unit of
service or commodity under the assumption that this requires investment in capacity
expansion. A long run marginal cost for a wastewater treatment company is to have to
build a bigger plant. The costs will vary from how fast the demand for water treatment
is growing, how far are existing plants from being at capacity, and so on.
Managed realignment: this is the deliberate process of altering the line of river,
estuary or coastal defences. This can include widening a flood plain, lowering or
moving flood defences, often to create or recreate natural habitats such as salt
marshes and mudflats, which then act as a natural form of flood and storm defence. A
key aspect of this is the goal of establishing more sustainable estuarine, riverine or
coastal forms, better able to deal with natural processes, surge tides and heavy rainfall.
The creation of these natural areas also has nature conservation benefits.
Marginal abatement cost: carbon emission reductions usually involve some costs,
often the cost of investing in new technologies or processes. The total cost of reducing
emissions is known as the abatement cost. The marginal abatement cost refers to the
cost at a given time of eliminating an additional unit of emissions.
Marginal benefit: this is a way to measure change in benefits over the change in
quantity. For example, it could refer to the value of the benefits of an additional
recreational visit for a tourist site.
Natural Economy Northwest (NENW): The Natural Economy Northwest £3million, 3
year programme ended in December 2009 – a partnership led by Natural England, the
Northwest Regional Development Agency and SITA Trust. The Natural Economy
Northwest team worked with a wide range of partners and stakeholders to reposition
the natural environment within sustainable futures, and to encourage proper
investment in the natural environment by developing a framework for establishing the
economic value of such investment. For further information please see:
www.naturaleconomynorthwest.co.uk
Net additionality: this is the net positive difference that results from economic
development intervention, or any other type of investment.
Net present value (NPV): (**) a calculation used to estimate the value – or net benefit
– over the lifetime of a particular project, often longer-term investments. NPV allows
decision-makers to compare various alternatives on a similar timescale by converting
all options to current pound figures. A project is deemed acceptable if the net present
value is positive over the expected lifetime of the project.
(*) the sum of the present and discounted future flows of net benefits. A discount rate is
used to reduce future benefits and costs to their present time equivalent.
Option value: (*) the value that people place on having the option to enjoy something
in the future, although they may not currently use it.
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