Question

Capitalizing Local Investment in Urban Forests

  0  
Laurence Wiseman

Urban foresters have asked our coalition what steps could be taken by local governments to capitalize investments in tree[s] planting[s] intended to provide long-term ecological services to a community. Using credible tools and metrics, one can now assess the value returned from trees in terms of both avoided costs [energy use, storm-water management] and value added [property assessments, health impacts], etc.

The foresters suggest that capitalizing these investments will make it easier for local governments to finance expanded urban greening initiatives. How might this be accomplished.

I know this issue crops up periodically. Any history would be welcome -- especially if you're aware of previous attempts to make it happen.

Larry Wiseman
Senior Advisor, Sustainable Urban Forestry Coalition
Chair, Federal advisory committee on urban forests

Answers

 
  0  
Gabriel Brehm

Hello, Laurence,
There are a few resources out there from different organizations on the subject of capitalizing urban forests. It’s somewhat tricky as GASB doesn’t directly allow for an asset that appreciates in value the way trees do.

This report by the city of Portland Oregon includes several proposed frameworks for treating trees as assets. Rules in GASB 34 might allow trees to be treated as a special asset. The report also includes several case studies where trees were installed in cities and then various accounting systems were put into place:
http://www.cnt.org/repository/CNT_PDX%20Tree%20Asset%20Mgmt%20Final%20Report.pdf

The following report details 3 main ways that appreciating assets might be introduced within the framework of GASB. The authors eventually recommend treating trees as part of whatever capital asset they are benefitting, and applying the benefits as a reduction in depreciation:
http://www.urbanforestrysouth.org/resources/library/Citation.2004-11-03.P194/file_name

Gabriel Brehm
Knowledge Network Intern
ICMA

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