Assessing the Economic Viability of Nature-Based Solutions as an Urban Heat Island Mitigation Strategy: A Framework for York Region

Abstract

This thesis examines the economic viability of urban greenery cover (GC) as an urban heat island (UHI) mitigation strategy for York Region, Ontario. In light of increasing urban temperatures and intensifying heat stress, including the UHI effect, a comprehensive cost-benefit analysis (CBA) framework is developed to evaluate two distinct GC scenarios (moderate and intense). The analysis integrates a range of direct benefits – such as reduced emergency department visits, avoided premature mortality, decreased energy consumption, and increased productivity – alongside indirect benefits, including improved air quality and enhanced biodiversity. A key innovation in this thesis is the incorporation of a non-linear tree canopy scaling factor into the benefit valuation process, recognizing that urban tree benefits, such as air quality and those resulting from cooling effects, do not accrue at a constant rate. The study applied a quadratic scaling function to reflect the gradual maturation of tree canopies over a 40-year project horizon. This adjustment enables a more accurate projection of economic returns by emphasizing the higher benefits realized as trees reach full maturity. Cost components, including initial installation and ongoing maintenance expenses, are also discounted at an annual rate of 3%, following established regulatory guidelines. Overall, the results demonstrate that both GC scenarios yield negative net present values (NPV) and benefit-cost ratios (BCR) of 0.01. However, when non-linear scaling is incorporated, the timing and magnitude of benefits are more accurately projected, reflecting ecological phenomena in an economic model. These findings not only advance the methodological framework for assessing the economic viability of nature-based solutions (NbS) in urban environments but also offer practical insights for policymakers and urban planners seeking to justify investments in urban GC as a means of mitigating the UHI effect and adapting to climate change.