Melbourne: Tree Valuation Method

Policy Title: Melbourne Comprehensive Tree Valuation 

Year Adopted: 2020

City: Melbourne, Australia

Main Citation: Tree Valuation: implementing new strategies for urban forestry in the City of Melbourne

Description:

Environmental economists agree that it is often difficult to provide a sticker price for a tree, especially one that incorporates all its non-physical benefits. However, most believe that reducing a tree to the value of its lumber is harmful and disincentivizes mature tree protection. Many different groups and cities have developed valuation formulas that create a standardized valuation strategy for enacting tree-related legislation, including the City of Melbourne. Melbourne was one of the first cities to implement a valuation strategy into law, having created their own formula in 1990 and updating it to include green benefits in 2012. In 2020, Melbourne updated their formula once again to include amenity value and reinstatement greening costs - two oft-overlooked areas of a tree’s merit. 

To valuate a tree, Melbourne’s formula requires the addition of four separate variables: removal costs (costs associated with physically removing the tree), reinstatement costs (the price of planting a new tree that provides the same or more benefits), an ecological services cost calculated with the i-Tree valuation tool, and an “amenity value.” The amenity value variable is the most complex part of the equation: it takes a base value based on a respective tree’s size and alters it based on the tree’s species, aesthetics, locality, and condition. The amenity value alone can range from $306 AUD ($193 USD) to $181,002 AUD ($113,000 USD).

Impact:

Kelly Herzog, Melbourne’s manager of Urban Forest and Ecology, reports that this new method increases the average value of Melbourne trees by over 30%. The exact number of trees protected by the formula in its recent update is unclear, but the valuation strategy enables the city to assess the value of its urban canopy and offers a clear financial incentive for developers to minimize tree removal. Forestry plan data shows impressive progress in the protection of Melbourne’s tree canopy, but more research is necessary to determine if efforts have led to fewer instances of mature tree loss due to development. 

Additional Resources:

City of Melbourne. 2020. “Tree Valuations in the City of Melbourne.”