Replacement Cost
Replacement Cost
In addition to estimating the environmental benefits provided by trees, the i-Tree Eco model also provides a structural valuation which in the UK is termed the ‘Replacement Cost’. It must be stressed that the way in which this is calculated means that it does not constitute a benefit provided by the trees, nor is it a true reflection of the value of the trees. The valuation is a depreciated replacement cost, based on the Council of Tree and Landscape Appraisers (CTLA) formulae.
The formula allows for tree suitability in the landscape and nursery prices. This explains why the value given for Ash is comparably low despite its prevalence as a species, on account of the decreased suitability due to Ash Dieback - a pathogen which is discussed later.
Replacement Cost is intended to provide a useful management tool, as it is able to value what it might cost to replace any or all of the trees (taking account of species suitability, depreciation and other economic considerations) should they become damaged or diseased for instance. The replacement costs for the ten most valuable tree species are shown in Figure 16.
The total replacement cost of all trees in Birmingham currently stands at £858 million, English Oak trees are currently the species with the highest replacement value, on account of both their size and population, followed by Sycamore and London Plane. These three species of tree account for £255 million (29.7%) of the total replacement cost of the trees in Birmingham. A full list of trees with the associated replacement cost is given in appendix III.
Trees and woodlands have a structural value which is based on the depreciated replacement cost of the actual tree. Large, healthy long-lived trees provide the greatest structural and functional value.