What is a tree worth?

You live in Atlanta, Georgia.  Home to approximately 9,415,000 urban trees.  What would be the value of those trees - - in terms of their social, environmental, and economic value?  This is becoming increasingly important as trees, especially those in urban environments, are seen as means to reduce energy consumption and an important source of carbon sequestration.

The U.S. Department of Agriculture, Forest Service has a study out, Assessing Urban Forest Effects and Values, that looks at this question for the city of Chicago, Illinois.  Chicago is home to 3,585,000 trees with a tree cover of 17.2%.  The most common species are white ash, mulberry, green ash, and tree-of-heaven with 61.2% of the urban forest having a 6-inch or less diameter.

Valuation is presented as two components.  The first is structural value.  This includes the structural value of the tree - - the cost of having to replace the tree with a similar tree.  The second is the value associated with carbon storage - - the value of carbon stored in a tree.  Carbon storage is an indication of the amount of carbon that can be released if trees are allowed to die and decompose.  Estimates from the report are:

• Structural value - - $2.3 billion ($642 per tree)
• Carbon storage - - $14.8 million ($4 per tree)

Urban forests also have functional values (either positive or negative) based on the functions they performs.  Estimates from the report on an annual basis are:

• Carbon sequestration - - $521,000
• Pollution removal - - $6.4 million
• Reduced energy costs - - $360,000

Annual benefits total approximately $7,281,000 per year.  Assuming a 5% rate of return, 50-life cycle, and no decline in the annual functional performance as the forest ages - - present value is approximately $2.6 billion ($725 per tree).  The average tree in the Chicago urban forest is approximately worth $1,371, with the entire urban forest valued at $4.9 billion in 2011 dollars.