Green Roof Valuation: A Probabilistic Economic Analysis of Environmental Benefits
journal contributionposted on 2008-03-15, 00:00 authored by Corrie Clark, Peter Adriaens, F. Brian Talbot
Green (vegetated) roofs have gained global acceptance as a technology that has the potential to help mitigate the multifaceted, complex environmental problems of urban centers. While policies that encourage green roofs exist at the local and regional level, installation costs remain at a premium and deter investment in this technology. The objective of this paper is to quantitatively integrate the range of stormwater, energy, and air pollution benefits of green roofs into an economic model that captures the building-specific scale. Currently, green roofs are primarily valued on increased roof longevity, reduced stormwater runoff, and decreased building energy consumption. Proper valuation of these benefits can reduce the present value of a green roof if investors look beyond the upfront capital costs. Net present value (NPV) analysis comparing a conventional roof system to an extensive green roof system demonstrates that at the end of the green roof lifetime the NPV for the green roof is between 20.3 and 25.2% less than the NPV for the conventional roof over 40 years. The additional upfront investment is recovered at the time when a conventional roof would be replaced. Increasing evidence suggests that green roofs may play a significant role in urban air quality improvement. For example, uptake of NOX is estimated to range from $1683 to $6383 per metric ton of NOX reduction. These benefits were included in this study, and results translate to an annual benefit of $895−3392 for a 2000 square meter vegetated roof. Improved air quality leads to a mean NPV for the green roof that is 24.5−40.2% less than the mean conventional roof NPV. Through innovative policies, the inclusion of air pollution mitigation and the reduction of municipal stormwater infrastructure costs in economic valuation of environmental benefits of green roofs can reduce the cost gap that currently hinders U.S. investment in green roof technology.