Appendix D. Alternative economic appraisal (2070)
This appendix provides an economic evaluation similar to Chapter 9, but for the appraisal period 2021-2070 (50 years). All economic values were converted from their original published price year to a common 2026 price base using the latest UK GDP deflators (HM Treasury 2026), ensuring all monetary values are expressed in constant 2026 prices for consistency across the appraisal.
Carbon sequestration
Carbon sequestration can be valued by considering the societal benefit of removing greenhouse gases from the atmosphere. Values are based on the UK Government’s non-traded carbon prices (Department for Business, Energy & Industrial Strategy 2021), which reflect the estimated cost to society of achieving legally binding carbon budgets and net zero targets. This approach provides a measure of the contribution of woodland creation to national climate mitigation objectives, capturing the full social value of emissions reductions rather than tying the value of benefits to observed market prices.
Over the appraisal period (2021-2070), this corresponds to a total asset value ranging from £855m to £897m (Table 9.1) when using the government’s central estimate. Carbon sequestration rates vary strongly as trees grow (see Chapter 3), and we therefore report the average annual (discounted) value of the service for the first 50 years of the programme (Table 10.1).
Valuation results are presented as summarised (minimum, average and maximum) values from the 12 management, spacing and disturbance scenarios outlined in Chapter 3, reflecting uncertainty in these parameters across the NCF programme. In addition, results are presented for the low, central, and high carbon price trajectories to capture uncertainty in the future value of carbon.
| Annual value (£m/y) | Asset value (£m) | ||||
|---|---|---|---|---|---|---|
Estimate | min | mean | max | min | mean | max |
Low | 8.55 | 8.74 | 8.97 | 427.31 | 436.79 | 448.30 |
Central | 17.09 | 17.47 | 17.93 | 854.69 | 873.66 | 896.69 |
High | 25.66 | 26.23 | 26.92 | 1,283.12 | 1,311.54 | 1,346.04 |
Methods
The economic valuation of carbon sequestration is based on the UK Government’s published carbon values, which represent the social (non-traded) value of carbon. These values are designed for use in policy appraisal and reflect the estimated marginal abatement cost required to meet UK carbon budgets consistent with net zero targets. The series provides annual carbon prices in real terms and includes low, central, and high trajectories to capture uncertainty in future abatement costs and policy pathways (Department for Business, Energy & Industrial Strategy 2021). The published 2020 prices were inflated to 2026 prices using the latest GDP deflators (HM Treasury 2026).
Biophysical estimates of carbon sequestration were obtained from the carbon indicator (Chapter 3) and summarised as an annual time series of net carbon flux (tCO2e per year) for each of the 12 scenarios, covering the period from 2021 to 2070. Annual sequestration values were multiplied by the corresponding carbon price (low, central, and high trajectories) for each year to generate annual monetary benefits.
The net present value (asset value) of carbon sequestration benefits was calculated as the sum of annual values over the appraisal period (50 years). Discounting was applied in accordance with HM Treasury Green Book guidance (HM Treasury 2018), using the standard discount rate for non-market environmental benefits.10.3 Biodiversity
Biodiversity can be valued by considering a household’s willingness to pay for different biodiversity outcomes. Values are based on a report prepared for the Forestry Commission (eftec 2025), which used a survey-based approach to estimate the value households place on general biodiversity improvements over a defined period (2025-2070). This approach provides an evidence-based estimate of the cultural benefits of forest creation to all households in Great Britain, reflecting stated public preferences for non-market environmental goods rather than observed market prices.
The Nature for Climate programme has planted 8,761 ha of woodland at sites previously dominated by agricultural or amenity/urban land uses. This planting is expected to have a biodiversity value of around £8.9m to £11m annually. This corresponds to a total asset value of between £482m and £620m for the same period (Table 10.2).
These results are derived from the non-use value for a general improvement in species diversity. The non-use value captures people’s motivation to conserve biodiversity for its own sake and for future generations. Results are presented for a low, central and high biodiversity valuation estimate as reported in the evidence source (eftec 2025) to capture uncertainty in the future value of woodland creation.
Estimate | Annual value (£m/y) | Asset value (£m) |
|---|---|---|
Low | 8.86 | 482.27 |
Central | 10.13 | 551.16 |
High | 11.39 | 620.06 |
Methods
First, we restricted the NCF planting dataset to sites where woodland was planted on agricultural or amenity/urban land. The planting type was limited to woodland because the eftec report specifically focuses on valuing ‘forest biodiversity’. We also restricted prior land use to agricultural and amenity/urban categories to remain conservative, as semi-natural grasslands (another relatively common prior land use type; see Figure 2.3) may already support comparatively high levels of species diversity prior to planting. Prior land use was determined based on the dominant land cover intersecting each planting site geometry, as informed by the habitat baseline (Appendix A).
The eftec report provides low, central and high biodiversity valuation estimates (£/ha/year) for different step-changes in forest biodiversity improvement, aggregated across all households in Great Britain. These estimates include both use and non-use values. To avoid potential double-counting, since use values are partly captured in the Access to Nature indicator (recreational benefits), we selected the non-use value for this analysis. Non-use values reflect altruistic, bequest and existence motivations for sustaining and improving biodiversity. We also selected the “general biodiversity improvement” category, as the data required to assess specific species diversity classifications (e.g. percentage of non-native trees, age class distribution, presence of invasive species or pests, and levels of deadwood) were unavailable for most planting sites.
Unit values originally reported in 2024 prices were converted to a 2026 price base using the latest GDP deflators (HM Treasury 2026). In the eftec survey, the cost of biodiversity enhancement was presented to households as a change in general expenditure over a 25-year period, with outcomes realised by 2100. This 25-year value of biodiversity enhancement can then be translated to a different appraisal period. To ensure consistency with related economic modelling across the NCF programme, the maximum appraisal period of 50 years was selected for adjusting annual values. Because NCF planting occurs between 2021 and 2025, five appraisal horizons (50 to 46 years) were applied to reflect different planting years when converting the 25-year value, following the approach set out in the eftec report. The net present value (NPV) of biodiversity enhancement was calculated as the sum of discounted annual values up to 2070. Discounting was applied in accordance with HM Treasury Green Book guidance (HM Treasury 2018), using the standard discount rate for non-market environmental benefits.
10.4 Air quality
The valuation of air quality benefits is based on the avoided health costs associated with the removal of air pollution by woodland planting. We used data from the UK Natural Capital Accounts (Office for National Statistics 2024c) which reports values at the local authority level. The health benefits of pollution removal depend on local population density and demographics, exposure to pollution concentrations, and the structure of the healthcare system, and as such this valuation is spatially sensitive.
Once the NCF trees are mature (assumed maturity is reached by 2050), they are projected to provide pollution removal up to the value of £11-12m annually. The value is largely driven by PM2.5 (Table 10.3), as fine particles are associated with serious health impacts, including premature mortality. NB: The Natural Capital Accounts only report economic values for four pollutants with enough associated evidence, and therefore we cannot present values for all six pollutants assessed in Chapter 5
NB: These values cannot be easily compared to other economic values provided here. The Natural Capital Accounts provide a 100-year asset value based on complex modelling of changing population and air pollution levels over time, and it is therefore not appropriate to calculate a net present value for other appraisal periods. Because the discounting assumptions are not available, we present annual values that do not include time preference.
| Annual value (£m/y) | 100-y asset value (£m) | ||
|---|---|---|---|---|
Pollutant | min | max | min | max |
NO2 | 0.08 | 0.08 | 4.39 | 4.73 |
O3 | 0.05 | 0.06 | 2.52 | 2.85 |
PM2.5 | 10.43 | 11.68 | 523.42 | 586.54 |
SO2 | 0.00 | 0.00 | 0.14 | 0.16 |
Methods
A lookup table of economic values for air pollution removal was developed using the ONS Natural Capital Accounts published dataset (Office for National Statistics 2024b). Rates for annual values and asset values (net present value over 100 years) were derived for each pollutant at local authority level by dividing the total (annual or NPV) value of removal by the corresponding total quantity of pollutant removed. This produced an implied value per tonne of pollutant removal for each local authority.
The latest available data (2023) were used, and values expressed in 2023 prices were converted to a 2026 price base using the latest GDP deflators (HM Treasury 2026).
Biophysical estimates of pollution removal (tonnes per year) were taken from the air quality indicator (see Chapter 5). These were multiplied by the corresponding local authority-specific economic rates to estimate annual economic benefits. Asset values were calculated using the net present value per tonne derived from the ONS data, instead of using a more standard approach of discounting using the Green Book health discount factors. This approach was adopted because the underlying ONS valuation is based on complex modelling that incorporates projected changes in population and pollution concentrations over a 100-year period. As these dynamics could not be replicated within this assessment, the published 100-year net present values were used directly in preference to deriving a bespoke valuation over a shorter appraisal period.
10.5 Flood mitigation
Water storage benefits provided by natural habitats can be valued using an avoided cost approach. In this context, the value of storing water is approximated by the cost of constructing and maintaining engineered infrastructure such as reservoirs with comparable capacity. This provides a proxy for the economic benefit of reducing downstream flood risk.
It should be noted that evidence on valuation for flood water storage remains limited, and values are sensitive to local hydrological conditions and the relationship between storage and actual damages avoided. The Natural Capital Registers and Accounts tool (NCRAT v1.2) no longer provides an economic valuation for this service (Environment Agency 2023b), on the grounds of the evidence being limited to one study (upon which the biophysical indicator is based). The estimates presented here should therefore be interpreted as indicative only and used to illustrate the potential scale of benefits. Additionally, as stated in the indicator chapter, not all water stored by woodland would go on to cause flooding, so these values should be treated as a maximum.
The estimated (discounted) value of water storage from mature NCF trees (assumed to be reached by 2050) is £0.59m per year. As the trees are assumed to have a lower capacity for the service when young, the annualised (discounted) average storage value over the period 2021-2070 is £0.75m. This corresponds to a total asset value of £37m (Table 10.4) for the same period.
Annual value (£m/y) | Asset value (£m) |
|---|---|
0.75 | 37.36 |
Methods
The economic valuation of floodwater storage is based on an avoided cost approach, following the methodology presented in a Forest Research valuation piece (Broadmeadow et al. 2023). This approach estimates the value of natural floodwater storage provided by woodland by considering the equivalent cost of constructing and maintaining artificial storage infrastructure, such as reservoirs, to provide the same level of water storage capacity.
Broadmeadow et al. (2023) derive an annualised unit value of £0.47 per cubic metre per year, expressed in 2021 prices, based on the capital and maintenance costs of reservoir storage over an assumed 100-year asset lifespan. For this assessment, values were converted to a 2026 price base using the latest GDP deflators (HM Treasury 2026), resulting in an uprated value of £0.58 per cubic metre per year.
Biophysical estimates of floodwater storage were obtained from the flood mitigation indicator (see Chapter 6) and summarised as annual volumes of water stored (m3 per year) over the period 2021 to 2070. Annual storage volumes were multiplied by the uprated unit value to estimate annual monetary benefits of floodwater storage.
Future benefits were discounted to present values using HM Treasury Green Book discount rates (HM Treasury 2018). The net present value (NPV) of floodwater storage benefits was calculated as the sum of discounted annual values over the appraisal period.
10.6 Water quality
Poor water quality arising from agricultural diffuse pollution generates substantial economic costs in England, estimated between £750 million to £1.3 billion per year (UK Government 2018). These costs reflect impacts on water treatment, ecosystems, recreation, and sectors such as tourism and fisheries.
The valuation presented here focuses on benefits arising from woodland planting on previously agricultural land. Trees outside woodland are not included, as they are not assumed to result in a change in underlying land use. Planting on other land use types (e.g. urban land) is excluded in the absence of an evidence base for valuation.
The amount of planting eligible for this valuation was 8,113 ha (55% of total planting). The estimated (discounted) value of pollution removal from these sites is £0.44m to £0.76m per year, corresponding to a total asset value of £22m to £38m by 2070 (Table 10.5).
Estimate | Annual value (£m/y) | Asset value (£m) |
|---|---|---|
Low | 0.44 | 22.05 |
Central | 0.60 | 30.13 |
High | 0.76 | 38.21 |
Methods
To our knowledge, there is no standard method for linking the amount of specific pollutants removed (e.g. as calculated in Chapter 7) to an avoided cost value. Therefore, a simplified approach was used, linking land use change to avoided pollution damages.
An economic rate was derived by dividing the total annual cost (low and high estimates) of agricultural diffuse pollution in England (UK Government 2018) by the total area of agricultural land (DEFRA 2025a). This provides an indicative cost per hectare of agricultural land associated with diffuse pollution, including impacts on water users, water companies, and sectors such as tourism and fisheries.
- cost of pollution: £750 million to £1.3 billion per year (2018)
- agricultural land: 8.8 million hectares
The planting dataset was filtered to include only sites classified as woodland or small woods. Sites were further restricted to those predominantly located on agricultural land, based on the baseline habitat map (see Appendix A). This ensures that only land use changes likely to reduce diffuse agricultural pollution are included in the valuation.
Unit values originally reported in 2018 prices were converted to a 2026 price base using the latest GDP deflators (HM Treasury 2026). A constant annual value per hectare was assumed over time, reflecting the ongoing benefit associated with the cessation of agricultural inputs following woodland creation. The net present value (asset value) of pollution reduction benefits was calculated as the sum of annual values over the appraisal period (50 years). Discounting was applied in accordance with HM Treasury Green Book guidance (HM Treasury 2018), using the standard discount rate.
10.7 Access to nature
Access to nature can be valued by considering individuals’ willingness to pay for access to greenspace and its associated recreational benefits. The values presented in this report are based on estimates derived from the Outdoor Recreation Valuation (ORVal) tool (LEEP Institute, U. of Exeter 2018), which applies a recreation demand model (travel cost) to quantify the welfare benefits associated with visiting greenspaces. These welfare values represent the monetary equivalent of these benefits, incorporating both site characteristics (e.g. woodland cover and recreational features) and the costs incurred in travelling to sites.
Recreational visits to NCF sites are projected to be worth ca. £27m annually. (We assumed no value for the first 5 years while trees established, and then the full value provided by ORVal, discounted to 2070.) This corresponds to a total asset value of £1,361m over the 2021-2070 period (Table 10.6). Around £3.3m of the annual welfare value is generated by planting on existing greenspaces, with the remaining £24m arising from sites without known prior access. When applying a ≥0.5 ha size threshold to these new sites, the annual welfare value was reduced to £16m.
Annual value (£m/y) | Asset value (£m) |
|---|---|
27.22 | 1,361.11 |
Methods
The economic valuation of recreation is first extracted from the ORVal tool. The ORVal tool is based on a Recreation Demand Model, which adjusts its predictions according to a number of factors, most particularly the socioeconomic characteristics of people, the day of the week, the month of the year, the attributes of a greenspace and the availability and qualities of alternative greenspaces. Because ORVal provides estimates of both visit numbers and welfare values for each greenspace, the approach and assumptions outlined in the ‘Recreation indicator’ section (Chapter 8) of this report also support the economic valuation results.
Economic welfare values originally reported in 2016 prices were converted to a 2026 price base using the latest GDP deflators (HM Treasury 2026). The net present value (NPV) of recreational benefits was calculated as the sum of discounted annual values over the appraisal period. Discounting was applied in accordance with HM Treasury Green Book guidance (HM Treasury 2018). Annual benefits were assumed to be zero for the first five years after planting. Full annual benefits were assumed to accrue from year 6 onwards.