Green Roof Valuation: Economic and Environmental Benefits Analysis

Document Type : Research Paper

Authors

1 Faculty of Economics, Allameh Tabataba'i University, Tehran, Iran.

2 Department of Economics, Faculty of Economics and Political Sciences, Shahid Beheshti University, Tehran, Iran.

3 Faculty of Economics. Allameh Tabataba'i University, Tehran, Iran.

Abstract

In the city of Tehran, factors such as the high value of land and rising prices have prevented the expansion of urban green spaces and kept green space per capita at a low level in comparison to international standards, leading to an increase in the need for citizens to have a place to rest and relax. Accordingly, creating vertical green spaces, such as walls and green roofs, plays a significant role. Therefore, introducing the functions and explaining the value of the economic and environmental benefits of developing such spaces is a necessity that can pave the way for the expansion of investment in this area. In this regard, the present study aims to assess the economic justification of green roofing in Tehran. Considering the two criteria of air pollution and green space per capita, district 2 of the municipality was selected, which is a host to a variety of social and economic classes. The discrete choice experiment (DCE) method was used to determine the economic value of green roof environmental services. In addition, the net present value (NPV), internal rate of return (IRR), and benefit‒cost ratio (BCR) indices were utilized for cost‒benefit analysis (CBA) of green roofing. Based on the results, citizens were willing to pay an average of 182.1 $/m2 to enjoy the aesthetic and environmental benefits of green roofs. Moreover, green roofing in the study area was economically justifiable, so that the average IRR was 44% and NPV was $187 during 2020. However, the IRR increased by 175% to an average of 121% considering the environmental benefits of this technology, and the NPV grew by approximately 388% to $914.
 

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Main Subjects

References

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Iranian Economic Review
Volume 29, Issue 2
June 2025
Pages 689-713

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