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Land Value – Assessment, Capture & Uplift

Our goal is to plan and deliver bigger, better and more connected1 land value solutions in the right places at a strategic and local level. At Sweco UK, we know the way we value our land resource is critical in addressing local needs, as well as providing the solutions to the biggest challenges of our time; the interconnected health, climate and biodiversity crises.

What is land value?

The term Land Value has no single definition. Our definition of land value is the monetised and non-monetised benefits derived from a parcel of land, directly influenced by its importance, quality and ability to provide a range of functions or services.

Historically, the services derived from land have not been well understood or measured, and are still systematically undervalued in our economy. Similar to other natural resources like freshwater, when viewed solely as a human commodity, we have regarded our land assets as being infinite and ubiquitous. But pressures of overconsumption and mis-management, as well as an increasingly volatile and unpredictable climate, have amplified the mis-match between the importance of our natural resources and the value we place on them.

We use our land for various purposes. Two significant land use changes by humans include the conversion of land to agriculture and food production; and housing, infrastructure and industry particularly following the industrial revolution. With this, in combination with the rapidly growing human population in the 20th and 21st centuries, comes a multitude of pressures on our limited land resource, including (not exhaustive):

  1. biodiversity loss
  2. reduction of land productivity caused by soil degradation and poor soil health
  3. land contamination
  4. water pollution, and associated impacts on aquatic ecology
  5. lowering of groundwater levels

These impacts are being exacerbated by human-caused climate change, particularly flooding and increasing incidences of extreme weather.

The effective use and management of land can help to provide solutions to these pressures, and land can provide valuable functions and services. The way we manage and value our land resource is critical to address these pressures, and at a larger system scale, to help address the interconnected climate and biodiversity crises.

We know the way we value our land resource is critical in addressing local needs, as well as providing the solutions to the biggest challenges of our time; the interconnected health, climate and biodiversity crises.

Paul Collins Director – Environment & Sustainability

What is land value capture?

A parcel of land can serve a range of needs and provide a range of ecosystem services. Ecosystem services can be defined as the benefits delivered by nature, for example carbon sequestration, biodiversity, water quality improvement and flood mitigation. These services provide economic, social and environmental benefits for local communities, as well as businesses and industry.

To capture land value, you would need to undertake the following high level steps/answer the following questions:

  1. Understand and identify the existing land use(s) – what land use(s) currently exist and what functions/services does it provide?
  2. Understand and identify the opportunities – what land use(s) could provide the most useful functions/services and who/what would benefit?

In relation to the latter point, quantifying or monetising land value in relation to the functions or services it provides would help to understand the existing or potential benefits in economic terms. This could be in relation to:

  1. Carbon sequestration – the volume of carbon stored or sequestered from the atmosphere in different habitats, e.g. woodland trees, soils or wetlands.
  2. Biodiversity net gain (BNG) – the ‘credits’ or ‘units’ assigned to different habitats that currently exist or could be created. Units/credits can be defined as a quantified amount of an ecosystem service, for example a ton of carbon or a defined amount of biodiversity.
  3. Flood risk mitigation – the damage caused by flooding or insurance estimate in monetary terms (or could be saved with adequate flood mitigation).

What is land value uplift?

Land value uplift can be defined as the increased value placed on a parcel of land, based on the real or perceived services or functions it provides. It can also mean a greater ‘willingness to pay’ for land or services/benefits generated from the land.

In order to generate the greatest uplift, you would need to maximise the opportunity from the land. A land parcel can provide a holistic range of ecosystem services and functions for different beneficiaries, for example:

  1. Supermarket supply chains from food growers to retailers and their customers.
  2. Health and wellbeing benefits for individuals and communities derived from access to green spaces and nature.
  3. Water companies – improved water quality and supply, and reduced flood risk.
  4. Other businesses and industries relying on ecosystem services for their operational activities and long term resilience.

An effective way to build in uplift are the principles of stacking2 and bundling3 of different ecosystem services on the same piece of land. This aggregating or disaggregating of services can provide benefits to farmers, developers and communities from multiple streams of income, on both the demand and supply sides.

Land must be sustainably and fairly managed to maximise uplift potential. There is also an increasing focus on the use of land and nature for people’s health and wellbeing.

 

What is land value assessment/analysis?

The way land is used and managed can have both positive and negative impacts.

For example, replacing mixed woodland or wild and largely undisturbed environments with monoculture crops or intensive agricultural practices have resulted in a multitude of issues such as biodiversity loss, land degradation, and contamination of our land and waters.

On the other hand, changing land uses from historic polluting activities to green and diverse places has benefits for nature and people.

At Sweco UK, we provide a wide range of environmental and sustainability assessment-type services to assess and analyse these types of land use changes for our clients. For example, projects requiring feasibility and masterplanning, SEA and sustainability appraisal, EIA, landscape design, carbon, ecology and air quality consultancy.

Some of the more commonly used land value assessment approaches, of which we at Sweco have extensive experience and expertise include:[MJ1]

  1. Environmental Impact Assessment
  2. Strategic Environmental Assessment (SEA) / sustainability appraisal
  3. Air Quality Assessment
  4. Flood Risk Assessment
  5. Biodiversity Net Gain
  6. Life-Cycle Assessment
  7. Whole-life carbon assessment

We also have expert capabilities in land value assessment and analysis specifically, and can help our clients in the following five core areas:

  1. Carbon sequestration
  2. Biodiversity including BNG, natural capital assessment, ecosystem services assessment
  3. Flood risk assessment (FRA), including flood solutions / mitigation
  4. Nutrient Neutrality
  5. Water Scarcity

Our land value services

Carbon sequestration

Biodiversity

  • Biodiversity Net Gain (BNG) assessment (relevant to England only)
  • Nature-Based Solutions
  • Ecology & landscape design, mitigation & enhancement
  • SuDS design
  • Blue Green Infrastructure
  • Ecological Impact Assessment (EcIA)
  • Habitats Regulations Appraisal (HRA)
  • EIA – Ecology / Biodiversity chapters
  • Terrestrial ecology (including protected species surveys & licensing)
  • ECoW supervision
  • Natural Capital accounting
  • Ecosystem Services assessment

Flood Risk Management

  • Flood modelling / Flood Risk Assessment (FRA)
  • Floodplain compensation
  • Nature-Based Solutions / flood design solutions
  • Natural Flood Management (NFM)
  • SuDS design
  • Blue Green Infrastructure
  • Water quality assessment
  • EIA – Water chapters
  • Digital Water Solutions
  • ‘Sponge Cities’
  • Water Scarcity

Nutrient Neutrality

  • SuDS design
  • Landscape design
  • Urban / landscape master-planning
  • Soil / water quality sampling
1. Lawton, J. (2010) Making Space for Nature: A review of England’s Wildlife Sites and Ecological Network. Available at: https://webarchive.nationalarchives.gov.uk/ukgwa/20130402170324mp_/http://archive.defra.gov.uk/environment/biodiversity/documents/201009space-for-nature.pdf
2. When multiple different ecosystem services produced by the same activities (for example biodiversity and carbon benefits of a new woodland) are sold as separate units in the market

3. When a suite of ecosystem services produced by the same activity (for example the biodiversity and water quality improvement provided by wetland restoration) is sold as a single combined unit in the market