Economic Assessment of Urban Ash Tree Management Options in New Jersey

Abstract

A cost–benefit analysis (CBA) is an economic approach to estimate the value of alternative programs, policies or management options. Net present value in CBA is one of the standard approaches to value the future benefits of investments. Due to the complexity of urban tree benefits, little is known about how to estimate the monetary value of the ecosystem services that urban trees provide as future benefits. We modeled the economic analyses of emerald ash borer (EAB) (Agrilus planipennis) management scenarios for urban ash trees (Fraxinus spp.) in New Jersey. These scenarios include: (1) no infestation or baseline scenario, (2) infestation with no action, (3) immediate removal and replacement and (4) the treatment of ash trees. The net present value for each management option is calculated using discount rates of 0%, 2% and 5%. The National Tree Benefit Calculator (NTBC) tool is used to quantify the economic value of the ecosystem services provided by the ash trees based on their diameter at breast height (DBH) values. The horizon over which benefits and costs are calculated was set at up to 20 years to estimate the net present value of ash trees that have DBH values of 4 inches. Results from the NPV outputs conclude that across most discount rates, the treatment of ash trees provided greater dollar (USD) values of ecosystem services over time when compared to inaction or the removal and replacement of ash trees. The present research suggests that removing and replacing ash trees is not cost effective at any discount rate due to the high future costs associated with retaining the newly planted trees over a twenty-year time horizon.