Alive with Nature An evidence-based analysis of the economic, environmental and social benefits of investing in the natural environment in Stirling

Authors: Dr Jim Rouquette1, Dr Alison Holt1, Prof Joe Morris2 and Dr Debbie Coldwell1 1Natural Capital Solutions and 2Morris Resource Economics

Contact details: Dr J.R. Rouquette Natural Capital Solutions Ltd www.naturalcapitalsolutions.co.uk [email protected]

Report prepared for: Stirling Council, the Scottish Wildlife Trust and the Scottish Forum on Natural Capital

Version: Final

April 2018 Alive with Nature: The benefits of investing in the natural environment in Stirling Executive summary

Introduction A City Region Deal for Stirling and Clackmannanshire represents a unique opportunity to unlock investment, secure and grow the city and regional economy, and includes objectives to develop natural capital assets across the urban area of Stirling City and beyond. Stirling Council, the Scottish Wildlife Trust and the Scottish Forum on Natural Capital commissioned Natural Capital Solutions Ltd to provide evidence to decision-makers on the economic, social and environmental benefits that an investment in natural capital could provide within Stirling. Early results from this piece of work were shared as a case study at the World Forum on Natural Capital in Edinburgh in November 2017. This report aimed to answer the following questions: 1. What would be the impact of proposed new investments on natural capital and the benefits that it provides? 2. Would this derive a positive or negative Return on Investment? 3. What lessons can be learnt to support better decision-making and to put natural capital at the heart of the economy? A summary version of this report, in the form of a Natural Capital Development Plan for Stirling, is available on the Scottish Forum on Natural Capital's website: naturalcapitalscotland.com. The report has been discussed in the Steering Group of the Scottish Forum on Natural Capital, but should not be taken as representing the views of, or any endorsement by, individual Scottish Forum members.

Key messages 1) If the right balance can be struck in key decisions, the Stirling City Region Deal represents a significant opportunity for Stirling to demonstrate leadership in implementing the Scottish Government’s commitment to increasing natural capital, improving health and well-being, and strengthening social inclusion. This kind of leadership could attract considerable attention internationally, which could in turn bring further benefits to Stirling. 2) In this analysis, the City Park and the River Project (as described in the published 2016 Masterplan, excluding any impoundment options and renewable energy schemes) generate an estimated economic Internal Rate of Return (IRR) on investment equivalent to annual yields of 12.5% and 13.7% respectively over 50 years. a) There would be significant benefits in terms of recreation, health, mitigating the effects of air pollution, and reducing atmospheric carbon. b) Additional benefits of the green investments would include the value of timber production, water quality enhancements, reduction in surface water flooding risk, noise regulation, and local climate (urban heat) regulation. Maps show the change in the provision of these services and their spatial location before and after the proposed investments. c) Some of the most deprived communities in Scotland are likely to gain some of the greatest benefits of the investments. d) The investments would be likely to provide benefits for biodiversity through extensive habitat creation, creating some potentially high quality new habitats on land that is largely agricultural and of poor biodiversity value at present. Most of the new habitat would also be publicly accessible, allowing for enhanced public engagement with nature. However, the increased access may cause disturbance along the river and more could be done to enhance biodiversity further. This should be the subject of a further assessment.

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3) The river in Stirling is a significant natural capital asset which for a long period has been undervalued. The City Region Deal proposals include ambitious plans to put the river back at the heart of Stirling life and it will therefore be important to protect this key natural asset. However, this analysis does not cover impoundment options, which is the subject of a separate options appraisal. 4) Natural capital approaches, including quantifying, mapping, and valuing the supply and demand of benefits, can now be used to assess the baseline situation and the potential impact of proposals and plans, and natural capital accounting can be used to compare benefits to costs. Incorporating the costs and benefits of natural capital into economic appraisal is now feasible and may secure higher returns on investment. Such assessments are more complete as they consider a wider range of costs and benefits than traditional economic analyses. It is hoped that this will lead to more joined up and sustainable decision-making.

Outline of Plans The City Park and the River Projects, as outlined in the 2016 Masterplan1, aim to be transformational initiatives that would link and benefit urban and rural areas of Stirling and beyond, supporting Stirling’s aspiration to become known internationally as a leader in sustainability. The masterplan can be found online, but the highlights are included below as an introduction: • The City Park proposals would create a major new park in a unique landscape setting that would act as a gateway for visitors arriving in Stirling and the location for major events. It would provide outdoor space that includes learning zones; physical and recreational features that are free for all and promote health and well-being; a variety of landscaped features that create interest and purpose all year round; and water features that increase the biodiversity of the site and also assist in alleviating flooding. Plans include a Visitor Centre, Community Orchard, City Farm, Mini Loch, Arboretum Zones and more. The City Park would be supported by safe and useable pathways connecting the park and other key locations around the city, as well as ‘Park & Choose’ sites that offer visitors the choices of walking, cycling or using public transport. New road infrastructure would re-align the main road through the site (the A811, Dumbarton Road) and connect the City Park directly to the M9 motorway. • The primary goal of the River Project is to reconnect the city with its river and heritage. The River Forth would become a new focal point, supporting business growth, the commercialisation of research and development, and quality of life. The River Project would link communities through the installation of new footpaths and cycleways throughout the length of the river, as well as three new footbridges. Plans include the creation of a wildlife sanctuary within easy walking distance of the city centre, a riverside auditorium for learning and enjoying outdoor performances, a major visitor attraction at the site of the Battle of Stirling Bridge and development of other heritage attractions, along with sporting, recreational and accommodation zones. Extensive plantings of wildflowers, trees, and orchards would complement community infrastructure to be installed along the length of the river.

Scope This report focuses solely on the ‘City Park’ and ‘River Project’ components of the City Deal, excluding any river impoundment options, the renewable energy projects and the flood alleviation scheme, as described in the Stirling City Deal Masterplan published in May 20161. These provide significant potential for

1 Available from: https://my.stirling.gov.uk/services/council-and-government/consultations-complaints-and- compliments/consultation/past-consultations/city-deal-masterplan

Natural Capital Solutions Ltd 3 Alive with Nature: The benefits of investing in the natural environment in Stirling investment in natural capital. This means that only the elements of the river project which are in Stirling have been considered. The report covers selected ecosystem services (natural capital benefits) for which information is available, and is not a complete assessment of all possible natural capital benefits and costs. In particular, it should be noted that this is not a full biodiversity impact assessment and only uses data on habitats rather than species. Impacts on features of designated sites in the area have not been considered. We have not attempted to value biodiversity separately, as its different roles in ecosystem services are already embedded in the value of the ecosystem service flow, and this would risk double-counting. This report does not consider any river impoundment options, which are the subject of a separate options appraisal and Strategic Environmental Assessment (Stirling Council 2016b). It will be important to avoid loss of natural capital as a result of any development on the river. Natural capital approaches are concerned with the benefits derived from the natural environment and do not assess the indirect impacts of grey infrastructure, technology or transport on the environment. This analysis, therefore, focuses on the direct natural capital costs and benefits associated with the proposals in the masterplan (excluding the river impoundment options), for example, loss of habitat. It does not address indirect costs associated, for example, with pollution from increased traffic. In this instance, the promotion of sustainable modes of transport should help to mitigate or eliminate the latter. The flood alleviation scheme was not included as it is partly dependent on some of the impoundment options and is focussed entirely around hard engineered defences, hence is not an investment in natural capital, and a separate optioneering study has already been produced.

A natural capital approach The natural environment underpins our well-being and economic prosperity, providing multiple benefits to society, yet is consistently undervalued in decision-making. Natural capital can be defined as “the world’s stocks of natural assets which include geology, soil, air, water and all living things. It is from this natural capital that humans derive a wide range of services, often called ecosystem services, which make human life possible” (World Forum on Natural Capital, naturalcapitalforum.com). These services include food production, regulation of flooding and climate, pollination of crops, and cultural benefits such as aesthetic value and recreational opportunities. The principles of natural capital and ecosystem services have been adopted by policymakers at international, UK and Scottish Government levels, with the Scottish Government having incorporated natural capital as an indicator within the National Performance Framework, and efforts are underway to incorporate these ideas into the planning and development process. Here we demonstrate the value of the proposed investments in natural capital and associated grey infrastructure, and how this approach can be integrated into economic appraisal and investment decisions for Stirling. Natural capital was mapped across the City of Stirling under the baseline (pre-investment) condition and under the City Deal masterplan. The capacity of the natural environment to deliver a number of different ecosystem services was then modelled and mapped at high resolution before and after the proposed investments. A quantitative physical flow account and a monetary flow account were created for the baseline and investment conditions, to show the biophysical and monetary values of each ecosystem service and how these would change following the proposed investments. Annual monetary flows of ecosystem services were calculated based on the latest valuation techniques available in the scientific literature and those approaches adopted by the Office for National Statistics (ONS) and Defra. These values were then incorporated into a full economic appraisal of the investments.

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Annual benefits and values • Investments in natural capital (green infrastructure) and enabling built infrastructure in the River and City Park projects would provide a wide range of benefits for Stirling and these should be taken into account in decision-making. • It has been estimated that an additional 580,000 recreational visits would be made to the river area each year and 560,000 to the City Park after completion of the proposals, compared to the 2017 baseline. This is calculated to provide additional annual welfare benefits worth £2.40M and £2.31M for each area respectively. • Access to greenspace close to urban areas can have a positive impact on health, through enabling increased physical activity. The River Project would provide a large increase in accessible greenspace close to people’s homes and the City Park would provide a large destination greenspace. It is difficult to estimate these impacts, not least because the presence of new greenspace does not guarantee that people will become more active. We therefore took a cautious approach and estimate minimum annual benefits of improved health through physical activity worth £278,300 for the River Project and £16,100 for the City Park. • Vegetation can be effective at mitigating the effects of air pollution, primarily by intercepting

airborne particulates (especially PM10) but also by absorbing SO2 and other pollutants. Proposed

new plantings would absorb an additional 74 kg of PM10 along the river and 139 kg in the City Park,

along with an additional 0.83 kg of SO2 along the river and 0.62 kg of SO2 in the City Park. This would provide annual benefits worth £5,700 and £10,700 respectively.

• New plantings would also take up (sequester) an additional 14.1 tonnes of carbon dioxide (CO2)

along the river and 62.9 tCO2 in the City Park. In addition, changing land use would reduce

agricultural emissions by 67.5 tCO2 along the river and 106.6 tCO2 in the City Park. Combined, these would provide an annual benefit worth £5,230 (river) and £10,840 (City Park). • Additional benefits of the green investments would include the value of timber production, water quality enhancements, reduction in surface water flooding risk, noise regulation, and local climate (urban heat) regulation. Maps are included that show the change in the provision of these services before and after the investments. • The investments would also provide benefits for biodiversity through extensive habitat creation, creating potentially high quality new habitats on land that is largely agricultural and of poor biodiversity value at present. Most of the new habitat would also be publicly accessible, allowing for enhanced public engagement with nature. However, the increased access may cause disturbance along the river and more could be done to enhance biodiversity further, particularly through the creation of more habitats of high biodiversity value. This should be the subject of a further assessment. • The planned investments would increase the value of property prices in the local area. The existing open space means that incremental effects would be less than if entirely new greenspace were created, but securing the greenspace against development would have a beneficial effect for existing occupiers, as would enhanced access to the greenspace. Values have been estimated and are included in the table below. • The River and City Park projects would be expected to draw in additional tourists who would spend money in the local economy. Much of this expenditure would be in the wider city (e.g. accommodation, restaurants, shops), but many would have initially come because of the green investments or for events held in those areas. There would also be opportunities to spend money

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directly linked to the natural environment, through for example, boating and riverside cafes. The planned investments would increase both natural and built capital and are inextricably linked.

Difference in annual physical and monetary flows for the City Park and River Project between the baseline and investment scenarios. Natural capital benefit City Park River Project

Annual change Annual change Annual change Annual change in physical flow in monetary in physical flow in monetary flow £2017 flow £2017

Carbon sequestration 62.9 t CO2 4,020 14.1 t CO2 904

Agricultural emissions foregone 106.6 t CO2e 6,820 67.6 t CO2e 4,320

Air quality regulation 139 kg PM10 10,750 74.2 kg PM10 5,720 0.61 kg SO2 1 0.83 kg SO2 2 Agricultural production foregone - 56.6 ha 3,970 - 40.2 ha 3,120 Timber 48.4 m3 754 10.9 m3 170 Recreation 560,000 visits 2,313,000 580,000 visits 2,395,000 Health and well-being 0.81 QALYs 16,000 13.92 QALYs 278,000 % change in indicative score* % change in indicative score*

Noise regulation + 6.5 - 2.0 Local climate regulation + 40.8 + 2.7 Water flow regulation + 2.1 - 3.8 Water quality regulation - 6.2 + 2.2 Accessible nature + 42.0 + 229.6 * Shows the percentage change in scores between the baseline and investment scenarios

Return on Investment Estimated annual benefits were combined with capital investment and incremental annual operating costs, phased in accordance with implementation schedules, to assess the economic performance of the investments over a 50-year period. Constant 2017 prices were used throughout. Project costs and schedules were based on Stirling City Deal estimates. Allowance was made for the additional beneficial effect of tourist expenditure and of capital and operating expenditure on the Gross Value Added (GVA) to the local Stirling economy. Benefits and costs were discounted at the HM Treasury’s test discount rates to give estimates of Net Present Value and Benefit: Cost ratio. Internal Rates of Return, that is the equivalent annual % yield of the project investments, were derived for each project. Central (best), low and high estimates were obtained to indicate the likely range in project performance. The City Park and River Project investments generate central estimates of Net Present Values (NPV) at the test discount rate (DR) of £88 million (range £43 million to £173 million) and £130 million (range £46 million to £210 million) respectively over a 50 year life assuming zero remaining values. Benefit:Cost ratios are 1.9 and 2.2 respectively. Central estimates for an assumed 30 year project life are £54 million and £85 million respectively. The City Park and River Projects generate an estimated economic Internal Rate of Return (IRR) of 12.5% (range 6% to 16%) and 13.7% (range 8% -20%) respectively over 50 years, and 11.8% and 12.9 % over 30 years. Sensitivity analysis revealed that a 50% reduction in the estimated value of total benefits or a doubling of total costs would make the projects breakeven. Project performance is particularly sensitive to assumptions about the value of tourism spend and moderately sensitive to the value of recreation and to estimates of operational and maintenance expenditure. Note that the estimates of NPV and IRR could be

Natural Capital Solutions Ltd 6 Alive with Nature: The benefits of investing in the natural environment in Stirling subject to optimism bias particularly associated with (i) the attribution of Tourism GVA benefits to green infrastructure and (ii) the under estimation of recurrent operational and maintenance costs.

Estimated benefits and costs: Stirling City Deal City Park and River Project proposed investments. Benefits and costs City Park River Project £ 2017 prices Central Range2 Central Range estimate1 estimate £ million £ million £ million £ million Benefits Ecosystems services 41.0 31-52 46.8 35-58 Property enhancement 12.0 9-15 12.8 9-16 Tourism3 95.7 67-124 143.6 101-186 GVA gain from capex & opex 32.9 23-44 38.6 29-51 Total benefits 181.7 168-257 241.7 173-311

Costs Capital 44.1 40-59 53.2 45-71 Operational and maintenance 49.5 44-66 59.1 53-79 Total Costs 93.5 84-124 112.3 101-149

Net Present Value 50 years at test DR 88.1 43-173 129.5 46-210 Internal rate of Return (IRR)4 12.5% 6%-16% 13.7% 8%-20% B:C Ratio at Test discount rate (DR) 1.9 2.2 NPV at 3.5% DR for 30 years5 53.8 8-88 84.5 21-128 IRR% over 30 years 11.8% 5%-17% 12.9% 7%-18% Notes: 1 Central estimate for 50 year project life, zero remaining values, discount rate: yr 1-30 at 3.5%, yr 31-50 at 3% 2 Based on expected range of low through to high values 3 Estimated increase in total Tourism GVA is apportioned as follows: City Park (40%); River (60%) 4 Range based on extremes of low benefits & high costs, and high benefits & low costs 5 Assumed 30 year project life, zero remaining value, DR 3.5%

A natural capital account revealed that the net value of natural capital assets for the City Park area was estimated to increase from £73 million to £160 million in £2017 PV due to the proposed investments, an increase of 220%. The River Project showed an indicative increase in net natural capital value from £74 million to £203 million, an increase of 275%. These estimates need cautious interpretation in accordance with the many assumptions and uncertainties involved in the estimation of baseline and change factors, not least the assumption that the future baseline situation would remain constant.

Key principles of investing in natural capital • The benefits of investing in natural capital are considerable and should be taken into account in decision-making. Access to greenspace for people can be highly beneficial for physical and mental health and well-being and the monetary value of these benefits can be extremely high. Green Infrastructure (GI) can also make important contributions to air quality regulation, climate change mitigation, natural flood risk management, water quality enhancements, local climate amelioration, and noise screening. GI is multi-functional, meaning that an investment focussing on one benefit (e.g. natural flood risk management), can deliver multiple additional benefits, hence offering excellent value for money. • The location and type of GI should be related to demand, which varies considerably across a city or region. Investing in green infrastructure can help to address issues of social inequality when

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located within or close to deprived communities. Mapping the spatial location and distribution of benefits (especially in relation to demand) provides valuable additional information. • Natural capital approaches, including quantifying, mapping, and valuing the supply and demand of benefits, can now be used to assess the baseline situation and the potential impact of proposals and plans, and natural capital accounting can be used to compare benefits to costs. Such approaches are being actively promoted by Scottish and UK policymakers (e.g. the UK Government’s new 25 Year Environment Plan) and are likely to become a requirement of the planning and development process in due course. Natural capital (and environmental) net gain is being pursued as an objective for all new developments. • Natural capital costs and benefits can be given a monetary value that can then be fed into standard economic appraisals that calculate gross value added, return on investment and internal rates of return. Such assessments are more complete as they consider a wider range of costs and benefits than traditional economic analyses. It is hoped that this will lead to more joined up and sustainable decision-making.

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Contents

Executive summary ...... 2 1. Introduction ...... 11 1.1 The proposed City Region Deal projects ...... 11 1.2 The natural capital and ecosystem services framework ...... 13 1.3 Outline of approach and report structure ...... 14 1.4 Scope ...... 15 2. Review: the benefits of developing green and blue infrastructure and natural capital in urban areas 16 2.1 Green infrastructure defined ...... 16 2.2 Green infrastructure and urban sustainable development ...... 17 2.3 Green infrastrcuture and policy ...... 17 2.4 The benefits provided by green infrastructure ...... 18 2.5 Summary ...... 28 3. Natural capital asset register ...... 29 3.1 Creating a natural capital (habitat) basemap ...... 29 3.2 Baseline habitats and green infrastructure ...... 29 3.3 Creating an investment map ...... 32 3.4 Investment habitats ...... 33 3.5 Impact on biodiversity ...... 35 4. Physical flow account: ...... 37 4.1 Approach ...... 37 4.2 Carbon storage capacity (stock) ...... 38 4.3 Carbon sequestration (annual flow) ...... 40 4.4 Agricultural emissions ...... 42 4.5 Overall carbon budget (greenhouse gas balance) ...... 43 4.6 Air quality regulation capacity ...... 44 4.7 Air quality regulation demand ...... 46 4.8 Noise regulation capacity ...... 48 4.9 Local climate regulation capacity ...... 50 4.10 Local climate regulation demand ...... 52 4.11 Water flow regulation ...... 54 4.12 Water quality (soil erosion) regulation ...... 56 4.13 Agricultural production ...... 58 4.14 Forest products – timber and wood fuel ...... 59 4.15 Accessible nature capacity ...... 61 4.16 Accessible nature demand ...... 63 4.17 Recreation ...... 65 4.18 Physical health ...... 66 4.19 Property values ...... 67 4.20 Overall results ...... 68 5. Monetary flow account: ...... 71 5.1 Carbon sequestration ...... 71

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5.2 Agricultural emissions ...... 72 5.3 Air quality regulation ...... 72 5.4 Agricultural production ...... 73 5.5 Forest products – timber & woodfuel ...... 74 5.6 Recreation ...... 75 5.7 Physical health ...... 75 5.8 Property values ...... 76 5.9 Tourism ...... 77 5.10 Overall results ...... 79 6. Economic appraisal of the planned investments ...... 80 6.1 Objectives ...... 80 6.2 Method ...... 80 6.3 Gross value added (GVA) multipliers ...... 81 6.4 Costs ...... 81 6.5 Return on Investment ...... 83 6.6 Natural Capital Account ...... 86 7. Conclusions and recommendations ...... 88 7.1 Key findings ...... 88 7.2 Social inclusion and placemaking ...... 88 7.3 Data gaps, assumptions and limitations ...... 89 7.4 Recommendations for the Stirling City Deal proposals ...... 90 7.5 Natural capital approaches in the planning and development process ...... 91 7.6 Key principles of investing in natural capital...... 92 7.7 Unlocking additional value from City Deal investments ...... 92 References ...... 95 Annexe 1: Natural Capital baseline assessment for Stirling City ...... 99 Annex 2: Angling and boating in Stirling ...... 110

Natural Capital Solutions Ltd 10 Alive with Nature: The benefits of investing in the natural environment in Stirling 1. Introduction

The principles of natural capital and ecosystem services are being increasingly recognised by the public and private sectors. They are backed by a number of local, national and international policies, which are encouraging more joined-up and sustainable decision-making and planning. Adopting the natural capital and ecosystem services approach is a key policy objective of the UK and Scottish Governments (and worldwide, thanks to the efforts of the United Nations and others). For example, natural capital is central to the UK Government’s recently published 25 Year Environment Plan, is being fully embedded in the update to the English National Planning Policy Framework, and the Scottish Government have incorporated natural capital as an indicator within the National Performance Framework. Meanwhile, the National Planning Framework 3 (NPF3), the long-term spatial strategy for economic development across Scotland, recognises the importance of the natural environment in Scotland’s cultural identity and that sustainable social and economic development depends on a healthy environment (The Scottish Government 2014a). The evaluation of natural capital and ecosystem services provides an appropriate framework to inform these requirements.

“The Scottish Government in recent years has tried to lead by example on environmental issues and the issue of natural capital. We were one of the first countries in the world to sign up to the UN's Sustainable Development Goals. […] The Scottish Government sees the concept of natural capital as an important tool for making better decisions as we look towards that better world. That's why natural capital is embedded in our performance framework, and also in our national economic strategy.”

First Minister Nicola Sturgeon, at the World Forum on Natural Capital, which brought over 700 delegates from 60 countries to Edinburgh in November 2017

However, there remains a big gap between policy and practice with little knowledge about how to apply the approach in practice. An assessment of natural capital and the benefits that it provides can be extremely informative at guiding planning and development but as yet, there are few examples of the practical application of such an approach in the planning and development sector. The proposed City Region Deal for Stirling and Clackmannanshire presented an ideal opportunity to develop and demonstrate such an approach and so guide best practice at a national level. The City Region Deal represents a unique opportunity to unlock investment and secure and grow the city and regional economy, and includes objectives to develop natural capital assets across the urban area of Stirling City and beyond. Natural Capital Solutions Ltd and Morris Resource Economics have prepared this report for Stirling Council, the Scottish Wildlife Trust and the Scottish Forum on Natural Capital, and offer it as evidence to decision makers on the economic, social and environmental benefits that an investment in natural capital could provide within Stirling. Here we demonstrate the value of the proposed investments in natural capital and how this approach can be integrated into economic appraisal and investment decisions for Stirling and beyond. The report was project managed by the Scottish Wildlife Trust with funding from Stirling Council.

1.1 The proposed City Region Deal projects A City Region Development Framework (CRDF) has been developed for Stirling and Clackmannanshire that identifies six major capital projects and includes objectives to develop natural capital assets across the urban area of Stirling City to benefit and optimise social, environmental and economic opportunities. Two

Natural Capital Solutions Ltd 11 Alive with Nature: The benefits of investing in the natural environment in Stirling of the projects in particular – ‘The City Park’ and ‘The River’ – are multi-million pound investments that are focused around the development and enhancement of natural assets and green infrastructure, along with enabling grey infrastructure. The City Park and the River Projects aim to be transformational initiatives that would link and benefit urban and rural areas of Stirling and beyond, supporting Stirling’s aspiration to become known internationally as a leader in sustainability. The masterplan is available online2 (Stirling Council 2016a) but the key features of the proposals are provided here, along with a map showing the location of the projects within Stirling:

Map 1: Location of the City Park and River Project areas within Stirling

2 Available from: https://my.stirling.gov.uk/services/council-and-government/consultations-complaints-and- compliments/consultation/past-consultations/city-deal-masterplan

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• The City Park proposals would create a major new park in a unique landscape setting that would act as a gateway for visitors arriving in Stirling and the location for major events. It would provide outdoor space that includes learning zones; physical and recreational features that are free for all and promote health and well-being; a variety of landscaped features that create interest and purpose all year round; and water features that increase the biodiversity of the site and also assist in alleviating flooding. Plans include a Visitor Centre, Community Orchard, City Farm, Mini Loch, Arboretum Zones and more. The City Park would be supported by safe and useable pathways connecting the park and other key locations around the city, as well as ‘Park & Choose’ sites that offer visitors the choices of walking, cycling or using public transport. New road infrastructure would re-align the main road through the site (the A811, Dumbarton Road) and connect the City Park directly to the M9 motorway. • The primary goal of the River Project is to reconnect the city with its river and heritage. The River Forth would become a new focal point, supporting business growth, the commercialisation of research and development, and quality of life. The River Project would link communities through the installation of new footpaths and cycleways throughout the length of the river, as well three new footbridges. Plans include the creation of a wildlife sanctuary within easy walking distance of the city centre, a riverside auditorium for learning and enjoying outdoor performances, a major visitor attraction at the site of the Battle of Stirling Bridge and development of other heritage attractions, along with sporting, recreational and accommodation zones. Extensive plantings of wildflowers, trees, and orchards would complement community infrastructure to be installed along the length of the river.

1.2 The natural capital and ecosystem services framework The natural environment underpins our well-being and economic prosperity, providing multiple benefits to society, yet is consistently undervalued in decision-making. Natural capital is defined as “..elements of nature that directly or indirectly produce value to people, including ecosystems, species, freshwater, land, minerals, the air and oceans” (Natural Capital Committee 2014). It is the stock of natural assets (e.g. soils, water, biodiversity) that produces a wide range of ecosystem services that provide benefits to people. These benefits include food production, regulation of flooding and climate, pollination of crops, and cultural benefits such as aesthetic value and recreational opportunities (Figure 1).

Provisioning Regulating Cultural Products obtained from Benefits obtained from Non-material benefits people ecosystems environmental processes that obtain from ecosystems e.g. food, timber, water regulate the environment e.g. recreation, aesthetic e.g. air quality, climate regulation, experiences, health and well- pollination being

Supporting (intermediate services)

Internal processes within ecosystems essential for the production of all other ecosystem services, e.g. soil formation, photosynthesis, nutrient cycling.

Figure 1: Key types of ecosystem services (based on MA 2005)

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Much work is progressing on how to deliver the natural capital and ecosystem services approach on the ground and how to use it to inform and influence management and decision-making. One of the most important steps is to recognise and quantify ecosystem service delivery (the physical flow of benefits derived from natural capital). It is also possible to provide a monetary valuation (monetary flow) of a number of these natural capital benefits. By examining how these physical and monetary flows would change following investment, it is possible to determine the potential impact of the proposals. When the net benefits are compared to the costs (capital and operational expenditure) over the lifetime of the project, a natural capital account and balance sheet can be drawn up. This can also form the basis for a full economic appraisal, where net present value (NPV) and internal rates of return (IRR) for the investments can be calculated. Additional insight can be gained by taking a spatial perspective on the variation in natural capital assets and the benefits that they deliver across the study area using a Geographic Information System (GIS). Maps are able to highlight hotspots and coldspots of ecosystem service delivery, highlight important spatial patterns that provide much additional detail, and are inherently more user friendly than non-spatial approaches.

1.3 Outline of approach and report structure The principal aim of the project was to determine the economic, environmental and social benefits of the proposed City Deal investments (focussing on the City Park and River Projects, excluding the elements outlined above) using a natural capital approach. In particular, we aim to answer the following questions: 1. What would be the impact of the new investments on natural capital and the benefits that it provides? 2. Would this derive a positive or negative Return on Investment? 3. What lessons can be learnt to support better decision-making and to put natural capital at the heart of the economy? The approach taken is shown in Figure 2. A review of the benefits of developing green and blue infrastructure and natural capital in urban areas is presented in Section 2, including case studies from other cities (outlined in a series of boxes), before presenting the results of the assessment in the remainder of the report. First, an analysis of the natural capital assets (an asset register) under the current situation and after the proposed investments have taken place is described in Section 3. Section 4 models and maps the physical flow of natural capital benefits (physical flow account) before and after investment, to highlight the potential impact and describe the spatial patterns. Section 5 then performs a monetary valuation of some of these benefits (a monetary flow account) before and after investment, before a full economic appraisal is presented in Section 6. This analyses the costs and benefits of the investments (incorporating the natural capital valuation) over 50 years to calculate net present value (NPV), cost-benefit ratios, and internal rates of return (IRR). Finally, Section 8 provides conclusions and recommendations concerning the Stirling City Deal proposals, for other City Deals and for the wider planning and development process. The focus of this report is on the City Park and River Project areas, before and after investment and to highlight the changes projected to occur. A baseline analysis of the natural capital benefits of the wider City of Stirling area is presented in Annex 1. Annex 2 presents some additional analyses concerning benefits provided by fishing and boating on the River Forth. A summary version of this report, in the form of a Natural Capital Development Plan for Stirling, is available on the Scottish Forum on Natural Capital's website: naturalcapitalscotland.com

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Asset Map natural capital assets before & after Register investment

Physical flow Map physical flow of benefits before & after account investment

Monetary Calculate monetary value of benefits before

flow account & after investment

Economic Examine costs and benefits over project lifetime to appraisal determine GVA and Return on Investment

Figure 2: Outline of the assessment approach

1.4 Scope This report focuses solely on the ‘City Park’ and ‘River Project’ components of the City Deal, excluding any river impoundment options, the renewable energy projects and the flood alleviation scheme, as described in the Stirling City Deal Masterplan published in May 2016 (Stirling Council 2016a). These provide significant potential for investment in natural capital. This means that only the elements of the river project which are in Stirling have been considered. The report covers selected ecosystem services (natural capital benefits) for which information is available, and is not a complete assessment of all possible natural capital benefits and costs. In particular, it should be noted that this is not a full biodiversity impact assessment and only uses data on habitats rather than species. Impacts on features of designated sites in the area have not been considered. We have not attempted to value biodiversity separately, as its different roles in ecosystem services are already embedded in the value of the ecosystem service flow, and this would risk double-counting. This report does not consider any river impoundment options, which are the subject of a separate options appraisal and Strategic Environmental Assessment (Stirling Council 2016b). It will be important to avoid loss of natural capital as a result of any development on the river. Note also that natural capital approaches are concerned with the benefits derived from the natural environment and do not assess the indirect impacts of grey infrastructure, technology or transport on the environment. This analysis, therefore, focuses on the direct natural capital costs and benefits associated with the proposals in the masterplan (excluding the river impoundment options), for example, loss of habitat. It does not address indirect costs associated, for example, with pollution from increased traffic. In this instance, the promotion of sustainable modes of transport should help to mitigate or eliminate the latter. The flood alleviation scheme was not included as it is partly dependent on some of the impoundment options and is focussed entirely around hard engineered defences, hence is not an investment in natural capital, and a separate optioneering study has already been produced.

Natural Capital Solutions Ltd 15 Alive with Nature: The benefits of investing in the natural environment in Stirling 2. Review: the benefits of developing green and blue infrastructure and natural capital in urban areas

2.1 Green infrastructure defined Green infrastructure (GI) is defined by the European Commission (2016) as “the use of ecosystems, green spaces and water in strategic land use planning to deliver environmental and quality of life benefits. It includes parks, open spaces, playing fields, woodlands, wetlands, road verges, allotments and private gardens. Green infrastructure can contribute to climate change mitigation and adaptation, natural disaster risk mitigation, protection against flooding and erosion as well as biodiversity conservation.” Water is categorised as blue infrastructure within GI, and includes a combination of natural and artificial features such as wetlands, rivers, canals, swales and sustainable urban drainage. See Table 1 for a GI typology.

Table 1. Green Infrastructure typology (adapted from Mattijssen et al. 2017) Parks and recreation Urban park Cemetery/churchyard Botanical garden/arboretum Green sport facility Neighbourhood greenspace Camping area

Building greens Green roof Balcony green Green wall

Allotments, community gardens and city farms

Private, commercial, industrial and institutional greenspace Street tree Green play/school ground Private garden Railroad embankment Street green & verge

Natural, semi natural and feral areas Forest/woodland Wetland Shrubland

Riverbank green

Blue space/infrastructure Sustainable urban drainage Pond, lake Swale Estuary Stream, river, canals Coast

Natural Capital Solutions Ltd 16 Alive with Nature: The benefits of investing in the natural environment in Stirling 2.2 Green infrastructure and urban sustainable development Urban centres are vital for the provision of a range of services (homes / shelter, food provision, employment, prosperity, cultural heritage, safety) and it is where demand for services is at its most intense. The natural environment is the foundation from which these services are provided. Cities face a range of pressing challenges that threaten the provision of such services and the natural capital they depend on. For example, the human population continues to increase, which leads to urban sprawl into the areas that are often key for providing ecosystem services, climate and related environmental change lead to uncertainties around the sustainable provision of ecosystem services into the future, but also emphasises the need for them. As a consequence, sustainable development, while maintaining economic prosperity and societal cohesion, is on the policy agenda. Such policies need to address public health issues arising from pollution, physical inactivity and lack of access to greenspace, and increasing temperatures, at the same time as considering protection from increased flooding events. A growing evidence base shows that good quality GI in the right location can help address many of these challenges (e.g. air pollution removal), while simultaneously delivering a multitude of additional benefits (providing recreational areas, carbon sequestration, temperature regulation). The multifunctionality of GI means that urban authorities have the potential to save money in the long term, for example, by reducing health costs associated with physical inactivity, and respiratory illnesses linked to pollution. It, therefore, makes GI an attractive investment for urban planners, compared to more traditional grey infrastructure solutions which may be less cost- effective. Planning of how the natural environment (through GI) can integrate with urban form to provide sustainable and resilient futures requires careful consideration. Variation in benefits delivered by GI depends on its type, species, design and position A natural capital approach can be used to assess the ecosystem service provision and value of current and future GI configurations in cities. Taking such an approach is essential for strategic planning to optimise the multifunctionality of GI.

2.3 Green infrastructure and policy The environment and sustainability play a central role in much of Scotland’s policy and development plans. The National Planning Framework 3 (NPF3), the long-term spatial strategy for economic development across Scotland, recognises the importance of the natural environment in Scotland’s cultural identity and that sustainable social and economic development depends on a healthy environment (The Scottish Government 2014a). NPF3 and the Scottish Planning Policy (SPP), which outlines how this strategy should be delivered, aim to significantly enhance green infrastructure networks, particularly in and around urban areas, in order to achieve its four key planning outcomes of Scotland being a “successful sustainable place, a low carbon place, a natural resilient place and a more connected place” over the next 20-30 years (The Scottish Government 2014b). The SPP specifically states that the planning system should: - consider green infrastructure as an integral element of places from the outset of the planning process; - assess current and future needs and opportunities for green infrastructure to provide multiple benefits; - facilitate the provision and long-term, integrated management of green infrastructure and prevent fragmentation; and - provide for easy and safe access to and within green infrastructure, including core paths and other important routes, within the context of statutory access rights under the Land Reform (Scotland) Act 2003.

The Scottish Government also sees protection and enhancement of GI as an essential aspect of successful placemaking, and so provides guidance on incorporating GI into masterplans of developments across all

Natural Capital Solutions Ltd 17 Alive with Nature: The benefits of investing in the natural environment in Stirling scales. For example, the Green Infrastructure: Design and Placemaking document (The Scottish Government 2011) emphasizes how GI can contribute to the six qualities of successful places (Distinctive, Safe and Pleasant, Welcoming, Adaptable, Resource Efficient and Easy to Move Around and Beyond) identified throughout the Government's design policy and provides practical advice on how this can be achieved. As a result, significant investment in GI across multiple scales is occurring throughout Scotland. Since 2010, for example, £6.3M has been invested in 185 projects in the development of the Central Scotland Green Network, an area spanning coast to coast from Ayrshire and Inverclyde to Fife and the Lothians with further Government funding already committed for 2018/19. Another significant area of investment in Scotland is being delivered through City Region deals. City Region Deals are agreements between Scottish Government, UK Government, local government and regional partners aimed at stimulating long-term local economic growth. The negotiation of a City Deal for Stirling represents a unique opportunity to unlock investment and secure growth of the city and regional economy.

2.4 The benefits provided by green infrastructure There has been increasing interest and investment in GI in recent years by researchers, policymakers and the public alike. This is due to a greater awareness of the broad range of social, economic and environmental benefits GI can deliver to society. One of the main advantages of GI is the multitude of benefits it supplies, as opposed to a single solution offered by more conventional grey infrastructure (as discussed above). These benefits can occur over multiple scales, with some requiring a direct connection between the location of the GI and the beneficiaries, such as recreation. Other benefits do not require this direct connection with GI, for example, habitats outside urban areas providing flood alleviation benefits to cities. Coordinated efforts to enhance GI can deliver benefits required to meet local, regional and national targets such as reductions in greenhouse gas emissions, reduction of air pollution and increases in physical activity. GI networks linking up across broader scales (for example in a National Ecological Network) are also of vital importance for delivering biodiversity benefits, through connectivity of habitats (see section 2.4.4 for further discussion). The benefits known to be delivered from GI are summarised in Table 2 and discussed in further detail below. It should be noted that GI can sometimes be responsible for delivering disservices such as increased allergy prevalence, structural damage to the built environment and increased pollution (Lyytimaki & Sipila 2009). However, many of these effects can be avoided or reduced through strategic urban planning and management. Reported disservices from GI are generally outweighed by the positive impacts.

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Table 2. The ecosystem service benefits provided by Green Infrastructure and some of the biodiversity and economic implications of these services. Green infrastructure services Regulating services Absorbing air pollution Reducing flood risk Sequestering (capturing & storing) carbon Reducing water pollution Regulating air temperature (reducing temperature Recharging ground water In summer & the urban heat island effect) Enhancing water quality Providing shelter from wind Reducing soil erosion Reducing energy use Attenuating noise Reducing rate & volume of storm water Screening unattractive places runoff

Cultural services Providing & enhancing landscape character Enhancing privacy Contributing to a sense of place & identity Enhancing community cohesion Cultural heritage Increasing security Enhancing aesthetics Reducing aggression, violence & crime Benefiting physical health – reducing blood rates pressure, stress, asthma Reducing road traffic speeds Speeding recovery from surgery & illness Enhancing driver & pedestrian safety Enhancing attention & cognitive function Bringing people closer to nature Improving mental health & well-being Providing settings for outdoor learning Improving pregnancy & birth outcomes Improving educational outcomes through Reducing mortality rates – especially enhanced concentration & performance related to cardiovascular & respiratory & reduced time off for illness diseases Enhancing quality of life Encouraging physical activity Providing spiritual value & meaning Providing opportunities for recreation

Provisioning services Source of food – including berries, nuts, fungi & Source of water wider range from allotments Source of timber & fuel including biofuel

Ecological benefits Habitat provision, improvement & connectivity

Economic benefits Increasing land & property values Reducing heating & cooling costs Reducing time on market for property sales Increasing property taxes Attracting business & customers Enhancing rental income Reducing health care costs Increasing tourism venues Reducing air pollution removal expenditure Reducing screening costs especially next to Reducing expenditure on storm water main roads grey infrastructure Providing potential for future carbon Reducing flood defences expenditure offsetting trade

Natural Capital Solutions Ltd 19 Alive with Nature: The benefits of investing in the natural environment in Stirling BOX 1: Malmö, Sweden Malmö, Sweden’s third largest city, has an international reputation as a role model for sustainable urban development. Formerly an area in post-industrial economic and social decline, it has been regenerated into a young, thriving and expanding city attracting investment and innovation. Central to this transformation have been policies aimed at creating an ecologically, economically and socially sustainable city that puts green/blue infrastructure, sustainable travel and climate-smart development at its heart. Having very little recreational greenspace compared to other Swedish cities pre-regeneration, more than half of Malmö is now greenspace. It has projects and policies that actively encourage, enhance and create rich and diverse greenery in domestic gardens, throughout the streetscape, on buildings and in parks. This has been achieved using key planning policy tools such as the Green Space Factor, which stipulates a minimum level of green and blue infrastructure to be incorporated into new developments. One of the early and most extensive ecological transformation projects took place in the Augustenborg neighbourhood. Key aims of its regeneration were improved waste management, resource efficiency through development of ecobuildings, local renewable energy sources and improved storm water management (as an inadequate drainage infrastructure meant it was prone to frequent flooding). An extensive network of sustainable urban drainage systems (SUDS) including 6 km of water canals and channels and retention ponds were created which double up as recreational areas. Local residents and stakeholders were involved in the design of new outdoor spaces introducing wild flowers, trees, allotments, wildlife habitat and areas for leisure and play. Green roofs were also incorporated into all new developments and retrofitted on existing buildings. Approximately €24M was invested in the core regeneration of Augustenborg between 1998 and 2002 which has delivered a number of benefits: ➢ The rainwater runoff rate has decreased by half and there has been no flooding, including during a 50 year rainfall event ➢ A 50% increase in biodiversity ➢ A 20% decrease in environmental impact as measured through carbon emissions and waste generation ➢ Improved reputation, attractive place to live and work ➢ Tenancy turnover decreased by 50% ➢ A dramatic decline in the unemployment rate from 30% to 6% ➢ Business stimulation – three new companies arose directly as a result of the project

References 1. European Environment Agency (2014) Urban storm water management in Augustenborg, Malmö. European Climate Adaptation Platform. http://climate-adapt.eea.europa.eu/metadata/case-studies/urban-storm-water-management- in-augustenborg-malmo. 2. Kazmierczak, A. and Carter, J. (2010) Adaptation to climate change using green and blue infrastructure. A database of case studies. https://www.escholar.manchester.ac.uk/uk-ac-man-scw:128518. 3. Kruuse, A. (2011) GRaBS Expert Paper 6: The Green Space Factor and the Green Points System. The GRaBS Project. Town and Country Planning Association, London. http://nextcity.nl/wp-content/uploads/2017/01/1701256-Malmoe-Tools-c- Annika-Kruuse.pdf, http://nextcity.nl/wp-content/uploads/2017/01/1701256-Malmoe-Tools-c-Annika-Kruuse.pdf 4. Sustainable Malmö http://malmo.se/Nice-to-know-about-Malmo/Sustainable-Malmo-.html

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2.4.1 Regulating services Regulating services are the benefits obtained from environmental processes that regulate the environment.

Air quality amelioration According to the World Health Organisation, air pollution is the greatest environmental health risk in Western Europe and globally. In the UK alone it is estimated to have an effect equivalent to 29,000 deaths each year, over 2,500 of these in Scotland (Royal College of Physicians 2016), and is expected to reduce the life expectancy of everyone in the UK by six months on average, at a cost of around £16 billion per year (Defra 2015a). Air pollution also contributes to climate change, reduces crop yields, and damages biodiversity. Vegetation (trees, shrubs, herbs and grass) can be effective at mitigating the effects of air pollution primarily by intercepting airborne particulates, especially PM10 (particulate matter 10 micrometres or less in diameter), but also by absorbing ozone, sulphur dioxide (SO2) and nitrogen oxides (NOX) (Elmqvist et al. 2015). Trees are more effective than grass or low-lying vegetation, although other aspects of GI such as green roofs have also been shown to play an important role in reducing air pollution (Goode 2006). The effectiveness of tree and plant type in reducing air pollution varies greatly depending on multiple factors including species, environmental conditions and concentration of pollutants (Sæbø et al. 2012, Broadmeadow and Freer-Smith 1996). Although the average percent air quality improvement due to vegetation is relatively low, the improvement is for multiple pollutants and the actual magnitude of pollution removal can be significant. Studies of air pollution removal by urban trees across numerous cities in the UK and USA showed that total pollution removal varied from 22 tonnes per year to 11,100 t/year (Nowak et al. 2006) the associated monetary value of which can be very high (Rouquette and Holt 2017).

Carbon stocks, carbon sequestration and reduced emissions Carbon stocks and carbon sequestration are seen as increasingly important as we move towards a low- carbon future. The importance of managing land and vegetation as a carbon store (a stock of carbon) has been recognised by the UK government and has a major role to play in national carbon accounting. Vegetation, especially trees, are able to capture and store (sequester) significant amounts of carbon and also facilitate a gradual accumulation of carbon in the soil (Forest Research 2010). GI is therefore recognised as a vehicle for delivering greater carbon sequestration and storage capacity as recognised by Scottish planning and policy (The Scottish Government 2011). GI can also lead to decreases in carbon emissions by reducing energy demands in buildings (see below), by using natural rather than engineered solutions and encouraging travel on foot or by bike.

Microclimate influence and energy saving Land use can have a significant effect on local temperatures. Urban areas tend to be warmer than surrounding rural land due to a process known as the ‘urban heat island’ effect. This is caused by urban hard surfaces absorbing more heat, which is then released back into the environment, coupled with energy released by human activity such as lighting, heating, vehicles and industry. Air temperatures up to 9°C hotter have been reported in urban areas in the UK compared to nearby countryside and is significant as heat-related stress accounts for around 1,100 premature deaths per year in the UK, with significant increases in exceptionally hot years (Doick and Hutchings 2013). Climate change impacts are predicted to make the overheating of urban areas and urban buildings a major environmental, health and economic issue over the coming years.

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GI, especially trees, woodlands and parks have a moderating effect on local climate, making nearby areas cooler in summer (Pataki et al. 2011). This occurs due to three processes: direct shading reduces both heat and UV radiation, evapotranspiration causes cooling, and vegetation does not absorb as much heat as built surfaces. A study from Manchester found a 10% increase in tree canopy cover can result in a 3-4°C decrease in ambient air temperature (Gill et al. 2007). GI can also act as a windbreak reducing heat loss resulting from wind chill. Green roofs and walls play an important role in temperature regulation by protecting buildings from solar radiation reducing inside temperatures as well as insulating buildings in winter (Castleton et al. 2010). An experiment of different roof types conducted in Canada demonstrated that green roofs can reduce heat gain below them by 70-90% in the summer and heat loss by 10-30% in winter (Lui and Minor 2005). GI can therefore help mitigate the health impacts of temperature extremes predicted as a result of climate change and contribute to significant energy savings and decreases in carbon emissions by reducing use of heating and cooling systems in buildings, a major contributor to UK energy consumption.

Avoided runoff, flood alleviation Record levels of rainfall have fallen in recent years throughout the UK with increasing numbers of flood events causing billions of pounds worth of damage. Winters are also expected to be up to 30% wetter by 2080 as a result of climate change. Stirling Council has been recognised as having five ‘extremely flood disadvantaged neighbourhoods’ (high potential for losses in well-being and a high proportion of residential properties potentially affected by flood events, relative to the Scottish average) due to fluvial flooding (Scottish Government 2013). Reducing runoff and flood risk is thus of vital importance, and investing in GI is increasingly being considered as a cost effective approach to helping achieve this. Vegetation can contribute to flood alleviation via a number of mechanisms including directly intercepting rainfall, absorbing and temporarily storing water before it evaporates and promoting higher infiltration rates into the soil (Nisbet et al. 2011, Mullaney et al. 2015). This delays flood flows and reduces the volume and rate of runoff. Flood alleviation ability varies by plant type and species. Trees in particular play an important role though for most rainfall intensities, an event exceeding 30 minutes has been shown to exceed the surface water storage capacity of even large trees (Xiao and McPherson 2016). There are, however, a number of additional natural engineered solutions available for reducing surface water runoff and increasing storage capacity during times of peak flow in urban areas. These include permeable paving, sustainable urban drainage systems (SUDS), swales and constructed wetlands. Thus the combination of different green infrastructure types in and around urban areas has potential to lessen the amount and speed of runoff, reduce pressure on drainage systems and water bodies alike and alleviate flooding.

Water quality and erosion control GI can also enhance water quality and control soil erosion. Diffuse pollution from agricultural areas as well as pollutants and detritus from urban surfaces and sewerage overflows is a major cause of poor water quality and contributes in many places towards failures to meet Water Framework Directive targets. GI such as woodlands, wetlands, SUDS, and swales are able to ameliorate diffuse pollution by trapping and retaining nutrients and sediment in polluted runoff (as reviewed in Forest Research 2010). The role of green roofs in water quality control is less certain and varies by type and slope with potential for fertiliser runoff contributing to poor water quality (Berndtsson 2010). Vegetation, particularly grass and trees also help reduce soil erosion and slope failure by protecting soil surfaces from rainfall and strengthening and stabilising soil structures through build-up of soil organic matter and the binding action of tree roots (CUFR 2002, Nisbet et al. 2004).

Natural Capital Solutions Ltd 22 Alive with Nature: The benefits of investing in the natural environment in Stirling BOX 2: Glasgow Green, Scotland Glasgow Green is Glasgow’s oldest park. Within walking distance of the city centre, the 55 hectare park underwent a major regeneration programme aiming to rid it of its bad reputation after falling into disrepair during the 1990s. The Glasgow Green Renewal Project was a partnership led by Glasgow City Council between 1998 and 2006 to restore the Green and improve its image and aesthetic quality, creating a popular visitor attraction. The project invested £15M into developments that included: ➢ Restoration, enhancement and interpretation of key features relating to Glasgow’s history and heritage ➢ A range of landscaping improvements ➢ Significant investment in physical fabric and infrastructure including the restoration of historic monuments, boundary, carriageway and park furniture improvements, and substantial safety improvements including lighting and CCTV ➢ Improved maintenance ➢ Appointment of a Park Development officer and horticulturalist ➢ Development of services and attractions including a large outdoor events space, investment in existing visitor attractions and a dedicated Park Ranger Service

The renewal project has transformed the reputation of the Green, with a shift to more positive perceptions of the park and reductions in crime rates. Furthermore, Gen Consulting (2006) reported the investment was estimated to have attracted visitors which resulted in a £30M net additional spend in the wider economy, nearly £8 million in terms of additional wage and salary payments, and 35 full-time equivalent jobs. There was a 28% increase in jobs in the area between 1998 and 2006, compared to only 13% elsewhere in the city. The rate of new business formation in the local area was also higher than the Glasgow average, while businesses near the Green felt that the location was attractive to customers and that it helped improve staff morale and retention. Seventy percent of visitors reported that they felt the project was a good investment, and in 2011 the Park was awarded Green Flag status. The Glasgow Green Renewal Project took place during a time of wider regeneration of the east of Glasgow which was not accounted for in figures outlined above. Nonetheless, the restoration of the Green is viewed as having been an important contributor to the sustained regeneration of Glasgow, and evidence for the economic and social benefits that green infrastructure investments can supply. It also highlights that GI projects as part of wider urban investment schemes can help maximise potential benefits.

References 1. GEN Consulting. 2006. Glasgow Green Renewal Benefits Analysis, A report to Glasgow City Council. Glasgow City Council website https://www.glasgow.gov.uk/glasgowgreen. 2. Eftec (2013) Green Infrastructure’s contribution to economic growth: a review. A final report for Defra and Natural England. Economics for the Environment Consultancy, London.

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Noise regulation Noise can impact health, well-being, productivity and the natural environment. The World Health Organisation (WHO) have identified environmental noise as the second largest environmental health risk in Western Europe (after air pollution). It is estimated that the annual social cost of urban road noise in England is £7 to £10 billion (Defra 2013). In the UK about 10% of the population live in areas of excessive daytime sound levels, although up to 30% of the population express dissatisfaction in surveys of their local noise environment (Health Protection Agency 2010). Major roads, railways, airports and industrial areas can all be sources of considerable noise. GI including urban parks and green roofs have been shown to mitigate noise in urban areas (Cohen et al. 2014, Saadatian et al. 2013). Densely planted and complex vegetation cover such as trees mixed with scrub is considered to be most effective, although any vegetation cover is more effective than artificial sealed surfaces. Noise absorption is linearly proportional to the width of the vegetation barrier (Kalansuriya et al. 2009), with reductions in noise by five to ten decibels for every 30m width of woodland equating to roughly 50% less noise to the human ear (Forest Research, no date).

2.4.2 Cultural services Cultural services are the non-material benefits people obtain from ecosystems.

Placemaking Creating places that “promote healthy, sustainable lifestyles; promote Scotland’s distinctive identity; attracts visitors, talent and investment delivering environmental ambitions; and providing a sense of belonging, a sense of identity and a sense of community” is prominent in Scottish planning policy (The Scottish Government 2014b). Good quality GI is recognised at being important for delivering such placemaking as it can create highly valued components of the landscape contributing greatly to the aesthetics, landscape character and the distinctiveness of an area. This in turn can improve the desirability of a place to live and work and plays a significant role in forming a sense of place and community spirit.

Health and well-being There is a vast literature linking exposure to nature with improvements in both physical and mental health and well-being (Bowler et al. 2010, van den Berg et al. 2015). An increasing number of studies have found an association between greenspace and health. Research has shown that those living and working in greener environments (or those perceived to be greener) report, and are found to, have better general health, lower incidence of non-communicable diseases, reduced mortality and increased longevity, increased mental health, lower incidence of mental health related illness and higher psychological well- being (reviewed in Sandifer et al. 2015). Given that the number of people in the UK with obesity has trebled in the last 30 years (FAO 2013), coronary heart disease is the leading cause of illness and death in Scotland (ISD Scotland 2016), and that one in four adults in the UK experience mental health problems, GI could play a vital role in reducing pressure and costs in the public health sector. The main underlying mechanisms proposed linking nature exposure to human health and well-being and further detail on the benefits delivered are outlined below.

Increased physical exercise. The benefits of exercising, both for physical and mental health are well established. Numerous studies have shown that having greater access to greenspace increases the likelihood of exercising (e.g. Sugiyama et al. 2008, Maas et al. 2008) with residents from greener areas (with little litter and graffiti) across eight European cities, for example, shown to be more than three times as likely to exercise than those from less green areas (Ellaway et al. 2005).

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Stress alleviation and attention restoration. There is extensive evidence that engaging with nature, whether actively out in a greenspace, or simply through views of greenery from a window, delivers mental health and well-being benefits. This is primarily thought to be a result of stress alleviation and restoration from mental fatigue allowing improved cognitive function (Kaplan & Kaplan 1989, Ulrich 1983). A study of over 900 participants, for example, found that proximity to urban greenspaces, as well as length and frequency of visits, were all correlated with reduced occurrence of self-reported stress-related illnesses (Grahn and Stigsdotter 2003). Experiments have also shown physiological indicators of stress, such as heart rate and blood pressure, to improve when exposed to natural environments (e.g. Hartig et al. 2003, Laumann et al. 2003). Although evidence from longer-term research is needed, these findings suggest that greater exposure to nature leads to reduced health problems associated with chronic stress and mental fatigue. Nature exposure has also been shown to improve levels of concentration and cognitive function with, for example, children demonstrating greater concentration when living in areas with tree views (Taylor et al. 2002), and obtaining higher marks and taking less time off school due to illness in classrooms with views of the natural environment (Bird 2007). GI also has the capacity to reduce levels of aggression which has been linked to greater mental fatigue (Kaplan, 1987). Residents living in buildings with little surrounding vegetation reported more aggression and violence than did their counterparts in greener buildings (Kuo & Sullivan 2001a). In addition, levels of mental fatigue were higher in buildings with no surrounding vegetation..

Enhanced social relations and community cohesion. Having strong social ties has been shown to positively influence longevity, physical health, psychological well-being and sense of security (Kweon et al. 1998). There is increasing evidence that GI, particularly in urban environments, plays an important role in generating social cohesion and a sense of community via provision of areas for people to meet and interact in. The presence, number and proximity of trees outside social housing in Chicago, for example, have been shown to increase the use and amount of time residents spend in these outdoor spaces and dramatically improve social ties and integration, sense of local community and sense of safety (Coley et al. 1997, Kuo et al. 1998).

Enhanced immune functioning. Evidence is also increasing on the positive role of nature exposure on the immune system as a mechanism for delivering multiple health benefits (Kuo 2015). This is thought to occur as a result of the immune system benefitting from relaxation when exposed to the natural environment and/or through exposure to a diverse range of microorganisms required for immunoregulation (Rook 2013). Indeed, beneficial immune responses, including expression of anti-cancer proteins (Li 2010) and reduced levels of proteins implicated in chronic disease (Mao et al. 2012), have been associated with walking in forests but not urban areas.

Improved air quality and reduction in the urban heat island effect. GI can also provide major health benefits through its ability to reduce air pollution and high temperatures caused by the urban heat island effect as outlined in Section 4. Children living in areas with more street trees have been shown to have lower prevalence of asthma (Lovasi et al. 2008) for example, while a dramatic increase in respiratory related deaths resulted from a loss of trees across 15 states in the USA (Donovan et al. 2013). Heat-related mortality already accounts for around 2,000 premature deaths in the UK and is forecast to increase dramatically as a result of climate change (Health Protection Agency 2012). The reductions in urban temperatures that result from GI thus have an important role in helping mitigating such heat-related deaths.

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Other cultural services Crime and safety. There is evidence to suggest that in urban areas, the presence of GI can be used to deter crime and anti-social behaviour. The number of violent crimes and crimes reported have been shown to be lower in areas with more vegetation (Donovan & Prestemon 2012, Kuo & Sullivan 2001b) though the type and density of vegetation has also been shown to influence perceptions of safety (e.g. street trees preferable than dense vegetation). GI, particularly street trees also have a marked impact on road safety, although the effects are complicated and depend on locational factors relating to the road and the positioning of the trees. Street trees act as a traffic calming measure and limit traffic speeds and have been shown to reduce the frequency and severity of crashes (Dumbaugh 2005).

Education opportunities. GI may provide a setting for learning outdoors, as evidenced by the booming Forest School initiatives in the UK, and has many developmental benefits. GI itself, can also be a source of study. The noticeable nature of features such as green walls and wildflower planting can provide effective public education opportunities about the pressures facing the environment, and strategies for sustainable development.

2.4.3 Provisioning services Provisioning services are the products obtained from ecosystems. GI provides us with food, timber and fuel with agriculture and woodland/forestry in more rural locations being the main sources of these. Other aspects of GI, however, also play a significant role in rural environments. Shelter belts, hedgerows and buffer strips help control air, soil and water quality and deliver important biodiversity benefits and provision of essential resources for pollinators. GI in urban environments also provides opportunities for growing food locally in domestic gardens, allotments, on green roofs and in city farms while delivering additional benefits such as greater social networks, aesthetic appeal and wildlife habitat. Opportunities for biofuel production via urban GI are also increasingly being explored. A study of the potential for using road verges in Holland by Voinov et al. (2015), for example, showed that the Energy Return on Energy Invested (EROEI) considering the whole lifecycle of a scheme was good and compared favourably with other renewable energy sources and with fossil fuels. Such schemes again provide a number of additional benefits such as biodiversity enhancement, carbon sequestration, water quality improvement and storm water management (Rowe et al. 2009) and avoids concerns of using land for biofuel crops that would otherwise have been used for food.

2.4.4 Biodiversity and ecological benefits Biodiversity underpins the delivery of many of the ecosystem services and benefits we depend on, although exactly which elements of biodiversity and the form of the relationship between them is not yet clear. Biodiversity, however, is under threat with 53% of native species in the UK in decline and 15% under threat of extinction (Hayhow et al. 2016). Habitat loss and fragmentation is a major contributor to biodiversity declines with urbanisation being a key driver. Greening our cities can therefore help to reverse these trends, with GI providing habitat for urban wildlife, at the same time as providing benefits to people. GI infrastructure provides habitat for both rare and common species and can be particularly important for pollinators (reviewed in Oberndorfer et al. 2007). Urban parks, woodlands and allotments have been shown to be great value for supporting a wide range of species though smaller, well-managed patches of greenspace such as green roofs, roundabouts and verges have also been shown to harbour a variety of plants, birds and insects (Rowe et al. 2009, Oberndorfer et al. 2007). GI also acts as corridors essential for allowing the movement of species between larger habitat patches both within and outside urban areas, facilitating the spread and gathering of vital resources, as well as enhancing resilience to climate change by

Natural Capital Solutions Ltd 26 Alive with Nature: The benefits of investing in the natural environment in Stirling BOX 3: Urban river restoration Urbanisation has caused the severe degradation of many city centre rivers. Impacts include physical changes such as replacement of natural banks with artificial structures that constrain flows and straighten courses, and heavy pollution from run-off and industrial contamination. Such changes reduce river resilience to climate change as well as their ability to deliver multiple benefits. Two projects aimed at restoring urban rivers and their services are outlined below. The River Quaggy, London, UK In south-east London, the River Quaggy was channelised into long, straight concrete culverts through several parks in an attempt to reduce flooding. The parks were predominantly flat, uniform, mown grassland used mostly for sport activities and were poor in biodiversity. In the early 2000s, restoration schemes got underway re-landscaping the parks, bulldozing concrete channels and re-naturalising the river. Large stretches of the parks now more closely resemble wetlands with a meandering river and provide natural floodplains with temporary flood storage areas. The parks are richer in habitats and wildlife with a large area since being designated a local nature reserve and awarded Green Flag status. Surveys have shown that the number of visits to Sutcliffe Park have increased by 73% with visitors staying longer than before the restoration. The number of new visitors has increased as well as the frequency of visits. A study also revealed that people were more likely to visit the parks to exercise and improve health, and that visitors’ self-esteem increased the longer they spent exercising there.

Sutcliffe Park before (left) and after (right) restoration works

The River Isar, Munich, Germany The Isar Plan was a €35M scheme that ran from 2000 to 2011 to restore an 8 km stretch of canalised river in Munich city centre. The river had been straightened in the mid-19th century and was increasingly at risk of flooding, poor in water quality and biodiversity, and offered limited recreational access. The restoration widened the river, re-naturalised with planting of the concrete river banks, improved access routes for visitors and replaced weirs with natural rocks and ramps. The Isar Plan has reduced the risk of flooding, and in a major flood event in 2005 the area was less damaged compared to other areas in south Germany. Flood run-off has been reduced and water quality improved. The restoration work also improved the aesthetic quality of the site and increased public access creating a valuable recreational resource. Biodiversity has also improved along the river with fish now being able to pass more freely.

References 1. European Centre for River Restoration (no date) Isar River, Munich. Case study. 2. European Climate Adaptation Platform (2015) Isar Plan - Water management plan and restoration of the Isar River, Munich (Germany). 3. RESTORE Partnership (no date) Case Study: Sutcliffe Park. Restoring Europe’s Rivers. https://restorerivers.eu/wiki/index.php?title=Case_study%3ASutcliffe_Park 4. Peacock, J., Hine, R., Willis, G., Griffin, M. & Pretty, J. (2005) The physical and mental health benefits of environmental improvements at two sites in London and Welshpool. Report for the Environment Agency by the University of Essex.

Natural Capital Solutions Ltd 27 Alive with Nature: The benefits of investing in the natural environment in Stirling enabling dispersion to more suitable areas. Maintaining biodiversity within GI networks is important to ensure ecosystems are resilient to environmental change. This ensures resilience of natural capital (the elements of nature that are supplying benefits), the flows of benefits, and maintains the value of the natural capital assets.

2.4.5 Economic valuation and benefits There can be significant economic benefits via savings delivered from investment in GI. As outlined above, GI can help reduce costs associated with health care, pollution removal, flood mitigation and energy consumption among others. Valuations of these economic benefits have taken place on relatively small scale interventions but few, if any, exist at the city wide scale. An exception is the estimates of expected savings predicted as a result of investment in green infrastructure in New York City ($1.5 billion over the next 20 years). Taking a natural capital approach to urban planning is very new, and at present there are few examples of business plans focused on the return on investment for delivering improvements in urban GI. A good example of how GI can create added value in the economy is through increases in property prices. There is now a good deal of evidence showing that proximity to, and views of, well-managed greenspace increases property prices. Research conducted in Aberdeen found the average premium for properties in close proximity to city parks was 2.6% for amenity greenspaces and increased to 9.0% for local parks and 10.1% for city parks (Dunse et al. 2007). Greener areas have also been shown to have a better image and attract and retain more visitors, industries, businesses and workers, although there is not as much evidence for this as for the increases in property prices (Saraev 2012). Investment in GI can also create job opportunities through their creation, maintenance and management.

2.5 Summary There is a wealth of evidence for the benefits that urban GI can deliver, ranging from health and well-being benefits through recreational opportunities and pollution reduction, to reducing the impacts of climate change. There is also increasing evidence that these benefits can reduce the costs of some of the pressing challenges that urban centres face, e.g. public health issues, pollution, increased flood risk, higher temperatures, and create added value in the economy. Clearly, the role that GI can play is being recognised in Scottish policy, with its use being encouraged in urban planning to help meet The Scottish Government visions and targets. Integrating GI into the urban form to maximise environmental, social and economic benefits is vital for successful urban planning, and the natural capital approach is key to revealing these.

Natural Capital Solutions Ltd 28 Alive with Nature: The benefits of investing in the natural environment in Stirling 3. Natural capital asset register

3.1 Creating a natural capital (habitat) basemap Before the flow or value of ecosystem services can be calculated and mapped, it is necessary to obtain an accurate assessment of the natural capital assets currently present in the study area and how these would change under the planned investments. The most important component of this was to create a habitat basemap for the current situation and a comparable map for the proposed investments. The habitat basemap was created using EcoServ GIS, a toolkit developed by The Wildlife Trusts, with a number of bespoke modifications. This approach uses MasterMap polygons as the underlying mapping unit and then utilises a series of different data sets to classify each polygon to a detailed habitat type and to associate a range of additional data with each polygon. The data that was used to classify habitats is shown in Box 4.

Box 4: Data used to classify habitats in the basemap:

• MasterMap topography layer • Stirling Council open space topology data • OS VectorMap District data • National Forest Inventory Scotland 2016 • Habitat Map of Scotland (HabMoS) • Scottish Native Woodland Survey • EUNIS Land Cover Scotland dataset • Ancient Woodland Inventory data • Corrine European habitat data • Layer that identified urban areas • OS Open Greenspace data • DTM based on OS Terrain 5 data

Polygons were classified into Phase 1 habitat types and were also classified into broader habitat groups. Multiple modifications were made to the EcoServ programme code to enable improved classification of habitats. Furthermore, upon initial completion the basemap was carefully checked and manual alterations were made in a number of places where miss-classifications had occurred. Note, however, that the final map was not ground truthed for accuracy, hence some misclassifications are inevitable. The basemap was produced to cover the whole of the Stirling City area plus an additional buffer zone of 500m to ensure that all maps were accurate right to the edge of the main study area. The final basemap contained c. 64,000 polygons, each of which was classified to an appropriate habitat type.

3.2 Baseline habitats and green infrastructure A map showing the key habitats across the city of Stirling, under the baseline (2017) situation is shown on the next page (Map 2). The area of each broad habitat type across the city, as well as in the City Park and River Project areas, is shown in Table 3. The Stirling city boundary area is 3091 ha in size and the habitat types that occupy the largest area are improved (agricultural) grassland, generally found towards the periphery of the built-up areas, and amenity grassland, making up 22.1% and 15.3% of the area respectively. Built-up areas and infrastructure (roads, railways, paths and pavements) take up a combined 23% of Stirling, with gardens an additional 12.7%. The remaining area consists of woodland, trees and scrub (12.0%), cultivated land (predominantly arable farmland) (7.1%), and a variety of other habitat types occupying smaller areas.

Natural Capital Solutions Ltd 29 Alive with Nature: The benefits of investing in the natural environment in Stirling

Map 2: Key habitats present under the baseline (pre-investment) condition at Stirling

Natural Capital Solutions Ltd 30 Alive with Nature: The benefits of investing in the natural environment in Stirling

The City Park area (243 ha) is just outside the core built-up area and is currently dominated by ‘improved’ grassland (113 ha or 46.4% of the total area) and amenity grassland (71 ha, 29.3%), with the majority of the latter being a golf course (Stirling Golf Club). Built-up areas and infrastructure currently occupy 16.7 ha (6.8%), while woodland, trees and scrub take up 32.6 ha (13.4%) of the site. Water occupies just 1.1 ha or 0.4% of the area at present. The River Project is similar in size to the City Park (259 ha) and also contains considerable amounts of improved grassland (90.5 ha, 35%), but unsurprisingly, water features occupy 79.4 ha or 30.7% of the area. Arable farmland is the next largest land use, taking up 18.3 ha (9.7%), with built-up areas and infrastructure taking up 22.8 ha (8.9%) and amenity grassland 21.2 ha (5.6%) of the area. Woodland, trees and scrub form just 8.9 ha (3.5%) of the habitats in the area under the baseline.

Table 3: Baseline asset register, showing the area and percentage cover of broad habitat types for the whole of Stirling City, the City Park and the River Project prior to investment. Broad habitat type Stirling City Park River Project Area (ha) % cover Area (ha) % cover Area (ha) % cover Cultivated land 220.8 7.1 0.0 0.0 18.3 9.7 ‘Improved’ grassland 683.3 22.1 112.7 46.4 90.5 35.0 Amenity grassland 471.8 15.3 71.2 29.3 21.2 5.6 Semi-natural grassland 39.1 1.3 2.9 1.2 2.6 1.0 Unknown & marshy grassland 11.9 0.4 0.6 0.3 3.1 1.2 Trees / Parkland 63.3 2.0 7.4 3.1 1.9 0.7 Scrub 34.7 1.1 11.7 4.8 0.9 0.4 Broadleaved woodland 148.2 4.8 13.4 5.5 6.1 2.4 Coniferous woodland 83.0 2.7 0.1 0.0 0.0 0.0 Mixed woodland 40.7 1.3 0.0 0.0 0.0 0.0 Water 98.0 3.2 1.1 0.4 79.4 30.7 Built up areas 403.3 13.0 6.4 2.6 17.2 6.7 Infrastructure 310.4 10.0 10.3 4.2 5.6 2.2 Garden 393.2 12.7 3.4 1.4 0.9 0.3 Mixed habitats 38.8 1.3 1.4 0.6 0.0 0.0 Other habitats 50.6 1.6 0.5 0.2 10.8 4.2 TOTAL 3091.0 100.0 243.0 100.0 258.6 100.0

There are two Sites of Special Scientific Interest (SSSIs) within Stirling, Abbey Craig and Balquhidderock Wood (which is also a local nature reserve), which together take up 14.5 ha (0.5% of Stirling). These are both woodland sites and are not in the City Park or River Project areas. However, approximately half of the river, amounting to 39.7 ha (15.4%) of the total area of the River Project, is designated as a Special Area of Conservation (SAC). This is part of the River Teith SAC, which starts many kilometres upstream of Stirling and extends to the railway bridge that crosses the River Forth in the centre of Stirling, and indicates that the site is of European importance, especially for its fish population. No other areas are subject to any other national or international nature conservation designations, although the Firth of Forth Special Protection Area (SPA) is downstream of the city and is designated as a site of international importance for its assemblage of wetland birds and overwintering wildfowl. Kings Park Wood, which is a strip of woodland occupying the steep slopes at the edge of Kings Park and within the City Park project boundary, is a proposed Local Nature Conservation Site (pLNCS). According to the Land Capability for Agriculture in Scotland maps, most of the agricultural areas around Stirling, including all the agricultural areas in the City Park and River Projects, are classified as Class 3.2 land,

Natural Capital Solutions Ltd 31 Alive with Nature: The benefits of investing in the natural environment in Stirling indicating that it is of moderate quality, capable of supporting mixed agriculture. A smaller area around Stirling is classified as Class 4.1, which is a slightly poorer quality. Stirling sits in the catchment of the River Forth, a little downstream of the confluence of the Forth with the River Teith and Allan Water. Through Stirling the overall condition of the river has been classified under the Water Framework Directive as moderate. The Bannock Burn also flows through the south and east of the city before entering the Forth and has been classified as being in poor condition. In total, 642 ha of Stirling, or 20.8 of the total area can be classified as public green infrastructure (excludes private gardens) under the 2017 baseline (Table 4). The various types of green infrastructure represented are shown in Table 4, with natural and semi-natural greenspaces, institutional grounds and sports facilities covering the greatest area. Out of this total, 387 ha (12.5% of Stirling) are fully accessible to the general public, whereas 255 ha (8.3%) are not. Green infrastructure that is not fully accessible to the public includes golf courses, allotments, and institutional (e.g. school) grounds.

Table 4: Type and accessibility of green infrastructure under the 2017 baseline, showing the area and percentage cover for the whole of Stirling City, the City Park and the River Project prior to investment.

Green infrastructure Stirling City Park River Project Type Area (ha) % cover Area (ha) % cover Area (ha) % cover Allotment or community farm 1.8 0.1 0.0 0.0 0.0 0.0 Amenity greenspace 83.4 2.7 6.1 2.5 11.4 4.4 Cemetery 15.5 0.5 7.0 2.9 0.0 0.0 Institutional Grounds 134.9 4.4 0.0 0.0 0.0 0.0 Park or public garden 36.6 1.2 13.3 5.5 0.1 0.0 Play facilities 5.6 0.2 0.0 0.0 0.3 0.1 Natural and semi-natural greenspace 229.6 7.4 19.3 7.9 5.4 2.1 Sports facilities 134.9 4.4 62.6 25.7 2.1 0.8 TOTAL 642.3 20.8 108.3 44.6 19.3 7.4

Accessibility Accessible greenspace 386.9 12.5 49.5 20.4 17.6 6.8 Not fully accessible public greenspace 255.4 8.3 58.8 24.2 1.6 0.6 TOTAL 642.3 20.8 108.3 44.6 19.3 7.4

Currently, 44.6% of the City Park consists of green infrastructure, of which just over half is not publicly accessible. The largest component of this is Stirling Golf Club. In contrast, only 7.4% of the River Project area is currently classified as green infrastructure, although most of this is publicly accessible.

3.3 Creating an investment map To analyse the physical and monetary flow of ecosystem services after the planned investments it was important to create a map of the habitats under the proposals in exactly the same format as the basemap. To accomplish this, the maps presented in the Stirling City Deal Masterplan (Stirling Council 2016a) document were used, together with the supporting framework documents provided by Stirling Council (Stirling Council 2016c, 2017) which provided additional descriptive detail. The maps in the masterplan were georeferenced in GIS and then traced over to create new polygons. Each polygon was classified into a detailed habitat type, compatible with the original version of the basemap. These habitats were assigned

Natural Capital Solutions Ltd 32 Alive with Nature: The benefits of investing in the natural environment in Stirling based on the investment proposals, supplemented by ecological knowledge of the most appropriate habitats to achieve the desired end points. New bridges, roads, paths, other infrastructure and buildings were also added to the new map. In addition to the habitats and infrastructure shown in the masterplan document, new habitats were also inserted at regular intervals along the river in accordance with the framework document (Stirling Council 2017). This included: • a 30m wide wildflower meadow over much of the length of the river, • small groups of trees at 200m intervals throughout its length, • 5 community orchards placed every 500m in four of the riverside neighbourhoods. Underlying polygons were altered or erased, and the new polygons were then merged to the original basemap to create a new GIS version of the basemap. Creating a fully compatible GIS version of the proposed investments was one of the most time-consuming parts of the assessment process.

3.4 Investment habitats Maps 3 and 4 (overleaf) shows the key habitats projected under the proposed investments, compared to the baseline, for the City Park and River Project areas. The area of each broad habitat type and the change in area compared to the baseline is shown in Table 5 for the City Park, and Table 6 for the River Project. Under the proposed City Park investment, the area of improved grassland would fall considerably to 56 ha or 23% of the total site area – a loss of 56.6 ha or 23.4% of the total land area. No other habitats decline by any significant amount. The majority of the new City Park habitats would be amenity grassland, which would increase by 28.5 ha to 99.7 ha, or 28.4% of the site (an increase of 40%). Broadleaved woodland would also increase by 8.1 ha to 21.5 ha or 8.1% of the area. Built-up areas (the new visitor centre and car parks) and infrastructure (roads, pavements and paths) would together make up 24.9 ha, which is 10.3% of the land area. There would also be smaller increase in the amount of semi-natural grassland (the proposed wildflower meadow), water (the mini loch and pond), cultivated land (maize maze planned as part of the City Farm) and reedbed (adjacent to the mini loch).

Table 5: Area and percentage cover of broad habitat types for the City Park before and after the proposed investments. Broad habitat type Baseline Investment Change Area (ha) % cover Area (ha) % cover Area (ha) Cultivated land 0.0 0.0 4.9 2.0 4.9 ‘Improved’ grassland 112.7 46.4 56.0 23.0 -56.6 Amenity grassland 71.2 29.3 99.7 41.0 28.4 Semi-natural grassland 2.9 1.2 6.1 2.5 3.2 Unknown & marshy grassland 0.6 0.3 0.6 0.3 0.0 Trees / Parkland 7.4 3.1 7.2 3.0 -0.2 Scrub 11.7 4.8 11.7 4.8 0.0 Broadleaved woodland 13.4 5.5 21.5 8.9 8.1 Coniferous woodland 0.1 0.0 0.1 0.0 0.0 Mixed woodland 0.0 0.0 0.0 0.0 0.0 Water 1.1 0.4 4.6 1.9 3.6 Built up areas 6.4 2.6 10.4 4.3 4.0 Infrastructure 10.3 4.2 14.5 6.0 4.3 Garden 3.4 1.4 3.2 1.3 -0.2 Mixed habitats 1.4 0.6 1.4 0.6 0.0 Other habitats 0.5 0.2 1.2 0.5 0.7

Natural Capital Solutions Ltd 33 Alive with Nature: The benefits of investing in the natural environment in Stirling

Map 3: Key habitats present under the baseline for the City Park and River Project areas.

Map 4: Key habitats present after the proposed investments for the City Park and River Project areas.

Natural Capital Solutions Ltd 34 Alive with Nature: The benefits of investing in the natural environment in Stirling

The River Project proposals would see a loss of 22.1 ha of improved grassland and 18.1 ha of cultivated land, which is 21.4% of the total area. There would also be a small loss of amenity grassland (1.6 ha). These would be largely replaced by semi-natural grassland (the riverside loop wildlife sanctuary and wildflower strips along much of the river banks), which would increase by 34.5 ha, increasing from 1.0% to 14.3% of the total area. There would also be small increases in broadleaved woodland (1.8 ha) and marshy grassland (0.7 ha). There would be a significant increase in the amount of built infrastructure, including three new footbridges over the River Forth and many kilometres of accessible footpaths and cycleways along the riverside. This would nearly double the amount of land taken up by infrastructure in the River project area, with an additional 5.0 ha predicted.

Table 6: Area and percentage cover of broad habitat types for the River Project before and after the proposed investments.

Broad habitat type Baseline Investment Change Area (ha) % cover Area (ha) % cover Area (ha) Cultivated land 18.3 9.7 0.2 0.1 -18.1 ‘Improved’ grassland 90.5 35.0 68.5 26.4 -22.1 Amenity grassland 21.2 5.6 19.6 7.6 -1.6 Semi-natural grassland 2.6 1.0 37.1 14.3 34.5 Unknown & marshy grassland 3.1 1.2 3.8 1.5 0.7 Trees / Parkland 1.9 0.7 1.8 0.7 -0.1 Scrub 0.9 0.4 0.9 0.4 0.0 Broadleaved woodland 6.1 2.4 8.0 3.1 1.8 Coniferous woodland 0.0 0.0 0.0 0.0 0.0 Mixed woodland 0.0 0.0 0.0 0.0 0.0 Water 79.4 30.7 79.6 30.7 0.1 Built up areas 17.2 6.7 17.2 6.6 0.0 Infrastructure 5.6 2.2 10.6 4.1 5.0 Garden 0.9 0.3 0.9 0.3 0.0 Mixed habitats 0.0 0.0 0.0 0.0 0.0 Other habitats 10.8 4.2 10.8 4.2 0.0

The proposed investments would have a significant impact on publicly accessible green infrastructure. In the City Park, this would increase from 49.5 ha (20% of the site) to 119.6 ha (49% of the site), an increase of 70.1 ha. The overall amount of GI would therefore increase from 44.6 to 73.5% of the site. For the River Project, overall GI would increase from 19.3 ha (7.4% of the site) to 91.7 ha (35.5%), an increase of 72.5 ha. This excludes the river itself, which would also be more accessible. All the new GI would be fully publicly accessible.

3.5 Impact on biodiversity Biodiversity is part of natural capital and performs important functions within ecosystems. It plays particularly important roles in relation to ecosystem services, although the complexities of the relationship between them is not fully understood. When considering the valuation of ecosystem services, biodiversity is important in a number of ways: (i) as a factor that regulates the ecosystem processes that underpin ecosystem services, (ii) as a final ecosystem service that contributes directly to some goods and their values, and (iii) it can itself be the good that has value.

Natural Capital Solutions Ltd 35 Alive with Nature: The benefits of investing in the natural environment in Stirling

Here we have not attempted to value biodiversity separately, as its different roles in the ecosystem services are already embedded in the value of the ecosystem service flow, and this would risk double-counting. However, it is important to note that the planned investments would have an impact on biodiversity, both positive and negative, and that this should be the subject of a separate impact assessment. A brief qualitative assessment is provided here, but this is in no way a comprehensive analysis. In the City Park area, a few notable bird species have been recorded, along with red squirrel, and otters have been recorded just outside the boundary on one of the small channels that drains away to the west (Stirling City Council 2018). The impact on these species (and others) would need to be assessed. In addition, there is concern at the loss of existing habitats that have value for invertebrates and plants (RSPB, pers. comm.). On the other hand, almost all of the habitat that would be lost is improved grassland that is likely to hold little biodiversity value, and some would be replaced with water and wetland habitats and a wildflower meadow, which have intrinsically greater value for biodiversity if managed appropriately. However, the dominant habitat currently planned is amenity grassland, which usually holds little interest, particularly if there are large numbers of visitors and their dogs. There is scope to enhance the biodiversity value of the new investment if higher quality habitats were created in place of some of the amenity grassland (see Section 7.4 for recommendations) and this is something that could be explored further in an ecological impact assessment. In the River Project area, notable fish species include eel and sea lamprey, which are an important part of its designation as a Special Area of Conservation (SAC), as well as salmon, sea and brown trout. Soprano and common pipistrelle bat species have been recorded along the river, as has otter (Stirling Council 2018). Again, the investment plans should be subject to an ecological impact assessment (and appropriate assessment) that considers the impact of the proposals on biodiversity and the designated features, especially in light of its status as a SAC. It should be acknowledged that even where habitats are not adversely impacted, there is the potential for impacts through disturbance due to the increased access throughout the length of the river, and this would include both bankside and direct water access. On a more positive note, replacing arable and improved grassland with strips of wildflower meadow and additional tree planting has the potential to provide habitat for biodiversity (including insect pollinators) and also to enhance water quality through reducing pollutant runoff reaching the river, thereby benefiting aquatic biodiversity. Overall, the investments would be likely to provide benefits for biodiversity through extensive habitat creation, creating some potentially high quality new habitats on land that is largely agricultural and of poor biodiversity value at present. Most of the new habitat would also be publicly accessible, allowing for enhanced public engagement with nature. However, the increased access may cause disturbance along the river and more could be done to enhance biodiversity further, particularly through the creation of more habitats of high biodiversity value. This should be the subject of a further assessment.

Natural Capital Solutions Ltd 36 Alive with Nature: The benefits of investing in the natural environment in Stirling 4. Physical flow account: Modelling and mapping ecosystem services before and after investment

4.1 Approach Once a detailed habitat basemap had been created for both the baseline and following the proposed investment, it was then possible to quantify and map the benefits that this natural capital provides to people. The following natural capital benefits (ecosystem services) have been assessed for this project: • Carbon storage (stock) • Water quality regulation • Carbon sequestration • Agricultural production • Agricultural emissions • Timber/woodfuel production • Air quality regulation • Accessible nature • Noise regulation • Recreation • Local climate (urban heat) regulation • Physical health • Water flow (flood) regulation • Property enhancement The list of services assessed was considered to capture all of the most important services provided by the natural environment in Stirling. A variety of methods were used, and these are described for each individual ecosystem service in the sections below. In all cases the models were applied at a 10m by 10m resolution to provide fine scale mapping across the area. The models are based on the detailed habitat information determined in the basemaps, together with a variety of other external data sets (e.g. digital terrain model, UK census data 2011, open space data, and many other data sets and models mentioned in the methods for each ecosystem service). Note, however, that several of the models are indicative (showing that certain areas have higher capacity or demand than other areas) and are not process-based mathematical models (e.g. hydrological models). For the indicative models and maps the capacity for ecosystem services is mapped and scored relative to the values present within the wider Stirling City study area. For every ecosystem service listed, the capacity of the natural environment to deliver that service – or the current supply – was mapped. For air purification, local climate regulation, and accessible nature, it was also possible to map the local demand (the beneficiaries) for these services. The importance and value of ecosystem services can often be dependent upon its location in relation to the demand for that service, hence capturing this information provided useful additional insight. Mapping demand was not, however, possible, for the other services where there was no obvious method to apply, or local demand is not relevant, such as food or timber production. All models of ecosystem service capacity were run under baseline conditions and then repeated using the habitats following investment. For the latter assessment, it was assumed that the City Park and River Project investments described in Section 1.1 were complete, and that all new habitats had established successfully. The following sections focus on the City Park and River Project areas and the change from baseline to the investment condition. A baseline natural capital assessment for the wider City of Stirling, including maps at this broader scale, is presented in Annex 1.

Natural Capital Solutions Ltd 37 Alive with Nature: The benefits of investing in the natural environment in Stirling 4.2 Carbon storage capacity (stock)

What is it and why is it important? Carbon storage capacity indicates the amount of carbon stored naturally in soil and vegetation (the stock of carbon). The importance of managing land as a carbon store has been recognised by the UK and Scottish Governments, and land use has a major role to play in national carbon accounting. Changing land use from one type to another can lead to significant changes in carbon storage, as can restoration of degraded habitats.

How is it measured? The EcoServ GIS carbon storage model was used. This model estimates the amount of carbon stored in the vegetation and top 30cm of soil. It applies average values for each habitat type taken from a review of a large number of previous studies in the scientific literature. As such it does not take into account habitat condition or management, which can cause variation in amounts of carbon stored. It is calculated for each 10m by 10m cell across the study area. Carbon storage was summed to calculate the total storage over the City Park and River Project study areas.

In all the ecosystem services maps that follow, the highest amounts of service provision (hotspots) are shown in red, with a gradient of colour to blue, which shows the lowest amounts (coldspots). Maps were created based on both the existing habitat and on the habitat projected to occur under the proposed City Park and River Project investments.

Results Maps 5 and 6 (overleaf) show carbon storage capacity per hectare for the City Park and River Project areas for the baseline and investment proposals respectively. The predominant carbon store in the Stirling area is provided by woodland, with broadleaved woodland, shown in red on the maps, typically storing more carbon than coniferous woodland. Arable farmland provides the least capacity for carbon storage and is shown in light blue on the maps. Urban sealed surfaces (roads, buildings) are not assessed and are shown as blank on the map as there is a lack of information on the storage capacity of such areas, although research has shown that they will contribute at least some additional storage. In the baseline area, the woodland on the steep slopes around Stirling Castle and King’s Park, and smaller strips adjacent to the river are apparent as the most significant carbon store, with much of the remaining area providing moderate capacity as it is dominated by improved and amenity grasslands. Under the proposed investments, new areas of woodland would be planted in the City Park area providing increased storage potential, but these would be counterbalanced by increases in sealed surfaces (especially car parking), water features and arable farmland. In the River Project area, converting arable farmland into a wildlife sanctuary consisting of semi-natural and marshy grassland, with some trees, would have the largest impact on carbon storage, while new tree plantings would also increase storage. Overall, the City Park is predicted to have a tiny fall in storage capacity (essentially exactly the same) following development (Table 7), while carbon storage would be expected to increase by 7.1% due to the River Project investment. The estimate for carbon storage for the City Park investment scenario is likely to be an underestimate as some storage would still occur underneath the car parks and other sealed surfaces. Table 7: Total carbon storage in the City Park and River Project baseline and investment scenarios Carbon storage Baseline Investment Change % Change (tonnes carbon)

City Park 29,949 29,938 -11 -0.04 River Project 30,968 33,172 2204 7.1

Natural Capital Solutions Ltd 38 Alive with Nature: The benefits of investing in the natural environment in Stirling

Map 5: Carbon storage capacity per hectare for the baseline (pre-investment) condition in Stirling

Map 6: Carbon storage capacity per hectare under the proposed City Park and River Project investments

Natural Capital Solutions Ltd 39 Alive with Nature: The benefits of investing in the natural environment in Stirling 4.3 Carbon sequestration (annual flow)

What is it and why is it important? Carbon sequestration is the uptake of carbon by plants as they grow. While carbon storage (Section 4.2) measures the stock of carbon in the natural environment, carbon sequestration measures its annual flow. Woodland is known to be particularly effective at carbon sequestration, as are peatlands. Little is known about how carbon sequestration occurs in other habitats or through soil respiration, and plants that are harvested annually (e.g. arable crops, improved grassland) will be approximately carbon neutral over the course of a year as the sequestered carbon is immediately harvested. Therefore, estimates are solely based on carbon sequestration in woodland habitats.

How is it measured? Carbon sequestration from the woodland areas in Stirling were calculated following the UK Woodland Carbon Code methodology and look-up tables (Woodland Carbon Code 2012a,b). The species mix of deciduous and coniferous woodland was taken from the National Inventory of Woodland and Trees Scotland Central Region (2000): • Broadleaved woodland consisted predominantly of oak, sycamore, ash and birch woodland. • Coniferous was dominated by Sitka spruce, with smaller areas of larch, Norway spruce and Scots pine. • For areas of mixed woodland, a 50:50 split was used between Scots Pine and a sycamore, ash and birch mix.

The calculations included areas of parkland with trees and scrub. The former sites were assessed to, on average, have 20% tree cover with a broadleaved mix of sycamore, ash and birch. Areas of scrub were calculated at half the sequestration rates of deciduous woodland of the same species mix.

The average yield class was used for each species, as well as an average spacing between trees, and it was assumed that deciduous woodland was not thinned, but coniferous areas were. The sequestration rates were averaged over a 60-year period for coniferous plantations and 100 years for the deciduous woodlands, to reflect the likely rotation length of the different types of woodland. The average annual sequestration rates were then multiplied by the area of each woodland type and added together to give the total sequestration estimate for woodland in the City Park and River Project areas for the baseline and for the habitats projected to occur following investment. The annual average sequestration rates were also mapped in GIS.

Results The same woodland areas highlighted in Section 4.2 for carbon storage are also providing carbon sequestration services (Maps 7 and 8). Most of this woodland is broadleaved, which is sequestering

(capturing) carbon at a rate of approximately 5.79 tonnes of CO2 per hectare per year. There are also large areas of scrub near Stirling Castle, with an average sequestration rate of 3.9 tCO2/year. Under the proposed investments, new areas of broadleaved woodland would provide increased carbon sequestration capacity. Overall, the changes in habitat with the investment would increase the capacity of the City Park and River Project sites to sequester carbon by 38.5 % and 26.1% respectively (Table 8). The City Park investment would include a larger area of woodland than the River Project (4.5 times more), hence the higher increase.

Table 8: Annual physical flows of the carbon sequestration service from woodland assets in the City Park and River Project baseline and investment scenarios Carbon sequestration Baseline Investment Change % Change (tC02/year)

City Park 168.30 231.17 + 62.87 + 37.4 River Project 54.17 68.29 + 14.12 + 26.1

Natural Capital Solutions Ltd 40 Alive with Nature: The benefits of investing in the natural environment in Stirling

Map 7: Carbon sequestration capacity per hectare for the baseline for the City Park and River Projects

Map 8: Carbon sequestration capacity per hectare under the proposed investments

Natural Capital Solutions Ltd 41 Alive with Nature: The benefits of investing in the natural environment in Stirling 4.4 Agricultural emissions

What is it and why is it important?

Agricultural activities release CO2 and other greenhouse gasses such as methane and NO2 into the atmosphere, with emissions depending upon the type of farming practices employed. This repreents a cost to society that is not currently captured by the market, but is accounted for in climate change reporting. The Climate Change (Scotland) Act sets a long-term target to reduce emissions of greenhouse gases (GHGs) by at least 80% in 2050 relative to 1990, with an interim target to reduce emissions by 42% in 2020. Emissions from agriculture and from the land use, land use change and forestry (LULUCF) sector have an important role to play in this. In the context of the City Deal investments, changing land use would have a potential impact on emissions, which can be included in the overall assessment of impact.

How is it measured? Crop areas and livestock numbers were calculated as described in Section 4.15. The GHG emissions associated with this agricultural production were calculated by multiplying the crop areas and livestock numbers by emissions figures for each crop and livestock type, as in Bateman et al. (2013). Three types of agricultural emissions were assessed:

1. Emissions from typical farming practices (e.g. tillage, sowing, spraying, harvesting, and the production, storage and transportation of fertilizers and pesticides)

2. Emissions of N2O from fertilizers

3. Emissions of N2O and methane from livestock, caused by enteric fermentation and the production of manure.

Emissions were summed across land and livestock to provide a total emission value (calculated in tonnes of CO2 equivalent). Emissions per ha were calculated by dividing the total emissions by the farmed area. This was used to calculate the emissions forgone when moving from the City Park and River Project baseline to the investment scenarios.

Results Approximately 46% of the City Park area is currently farmed for livestock, with no arable farming at present, and 35% of the River project area is down to livestock and 9.7% arable. Emissions from arable farming are estimated to be around 1.32 tCO2e/ha/year for the Stirling area, with some variation depending on the crop type. Emissions associated with livestock farming are higher, due primarily to the release of methane through enteric fermentation, with emissions around Stirling estimated at 1.98 tCO2e/ha/year on average. Under the investment scenario, the area of agricultural land would decrease in both the City Park and the River Project sites to 23% and 26.5% of each area respectively. This means that there would be a concurrent reduction in the GHG emissions associated with agricultural production. The City Park investment scenario shows a reduction of 106.6 tCO2e per year, and the River Project a reduction of 67.6 tCO2e per year (Table 9).

Table 9: Annual agricultural emissions in the City Park and River Project baseline and investment scenarios Agricultural emissions Baseline Investment Change % Change (tC02e/year)

City Park - 223.1 - 116.5 + 106.6 + 47.8 River Project - 203.4 - 135.8 + 67.6 + 33.2 NB. Emissions are indicated by a negative sign as this is a disservice. A smaller negative figure represents a reduction in emissions, which is a desirable result for this service

Natural Capital Solutions Ltd 42 Alive with Nature: The benefits of investing in the natural environment in Stirling 4.5 Overall carbon budget (greenhouse gas balance)

What is it and why is it important? The overall carbon budget is simply the balance between greenhouse gas emissions from the land and carbon sequestration from woodland. The greenhouse gas balance reported here represents the agriculture and land use, land use change and forestry (LULUCF) sectors for which national emissions information is collected. For Scotland as a whole, agricultural emissions were 8.3 M tonnes CO2 equivalent in 2015, whereas LULUCF was a net carbon sink, sequestering 2.8 MtCO2e (Committee on Climate Change 2017). Note that the overall carbon budget reported here considers land-based activities but does not take into account transport or other sources of emissions.

How is it measured? Overall greenhouse gas balance was simply calculated as sequestration minus emissions for the two study areas, with negative values indicating net emissions and positive values indicating net sequestration.

Results Agricultural emissions per hectare are on average lower than the rate of sequestration per hectare in woodlands. However, under the baseline, as there is far more agricultural land than woodland across both study areas, both project areas are net emitters of CO2, with an average emission of 0.25 tCO2e per hectare per year for the City Park and 0.58 tCO2e/ha/year for the River Project area. Following investment, however, the City Park would become a net sequester of CO2 (Table 10), meaning that the area would absorb more CO2 than it emits. The River Project area would remain a net emitter, but at a much reduced rate. Overall both areas would emit less greenhouse gasses and sequester more following investment, with total reductions of 169.5 and 81.7 tCO2e per year for the City Park and River Projects respectively.

Table 10: Annual carbon budget (greenhouse gas balance) in the City Park and River Project baseline and investment scenarios, taking into account carbon sequestration and agricultural emissions. Overall carbon budget Baseline Investment Change (tC02e/year)

City Park - 54.8 + 114.7 + 169.5 River Project - 149.2 - 67.5 + 81.7 NB. -ve (red) carbon budget signifies net emissions, +ve (black) signifies net sequestration.

Natural Capital Solutions Ltd 43 Alive with Nature: The benefits of investing in the natural environment in Stirling 4.6 Air quality regulation capacity

What is it and why is it important? Vegetation can be effective at mitigating the effects of air pollution, primarily by intercepting particulates, especially PM10 (particulate matter 10 micrometres or less in diameter), but also by absorbing ozone, SO2 and NOx. Trees are much more effective than grass or low-lying vegetation, although effectiveness varies greatly depending on the species. The ability of the woodland and grassland habitats of the baseline and the planned investments to absorb two of these key pollutants, PM10 and sulphur dioxide SO2, was quantified.

How is it measured? Calculations of absorption were based on Powe & Willis (2004) and the method in ONS (2016). Deposition rates for

PM10 and SO2 in coniferous and deciduous woodland and grassland were taken from Powe & Willis (2004). Average background pollution concentration in 2015 (most recent year available at the time of analyses) was calculated using Defra 1 x 1 km resolution maps clipped to the Stirling area using GIS (Modelling of Ambient Air Quality (MAAQ) https://uk-air.defra.gov.uk/data/pcm-data). These points were interpolated across the Stirling project area to derive background air pollution values for each polygon. The surface area index of coniferous and deciduous woodlands and grassland in on-leaf and off-leaf periods was taken from Powe & Willis (2004). The proportion of dry days (rainfall <1mm) for the Stirling region was estimated using MET office data for East Scotland (http://www.metoffice.gov.uk/climate/uk/summaries/datasets). The proportion of on-leaf relative to off-leaf days was estimated at the UK level using the average number of bare leaf days for five of the most common broadleaf tree species (ash, beech, horse chestnut, oak, silver birch) in the UK using The Woodland Trust data averages tool (http://www.naturescalendar.org.uk/findings/dataaverages.htm).

The calculations included areas of parkland with trees, and scrub. The former sites were assessed, on average, to have 20% broadleaved tree cover, while areas of scrub were calculated at half the absorption rates of deciduous woodland.

Results Woodland is by far the best habitat at intercepting and absorbing air pollution, and these areas are clearly identifiable on Maps 9 and 10. The very highest absorption rates occur in coniferous forests. Fifty-five percent of the PM10, and 40% of the SO2 absorption in the baseline for the City Park is achieved through the broadleaved woodland habitat. The rest is through the improved, amenity and semi-natural grassland habitats, which dominate (77% of the area) the site. The new habitats created as part of the proposed City Park investment, particularly the increased area of woodland, would absorb an additional

139 kg of PM10 and 0.61 kg of SO2 compared to the baseline habitats (Table 11). Sixty-three percent of the PM10 and 77% of the SO2 absorption in the baseline for the River Project is achieved through the grassland habitats, which dominate the non-water habitats. The new habitats created as part of the proposed River Project investment would absorb an extra 74 kg of PM10 and 0.83 kg of SO2 (Table 11). This is due to a small increase in the area of deciduous woodland that would be planted.

Table 11: Annual physical flows of the air quality regulation service from woodland and grassland assets in the City Park and River Project baseline and investment scenarios. Air quality regulation (kg/year) Baseline Investment Change % Change

PM10 City Park 1047.9 1187.3 + 139.4 13.3 River Project 468.0 542.2 + 74.2 15.9

S02 City Park 12.08 12.69 + 0.61 5.0 River Project 6.09 6.92 + 0.83 5.6

Natural Capital Solutions Ltd 44 Alive with Nature: The benefits of investing in the natural environment in Stirling

Map 9: Air quality regulation (absorption of PM10) for the baseline for the City Park and River Projects.

Map 10: Air quality regulation (absorption of PM10) under the proposed investments

Natural Capital Solutions Ltd 45 Alive with Nature: The benefits of investing in the natural environment in Stirling

4.7 Air quality regulation demand

What is it and how is it measured? Air quality regulation demand estimates societal and environmental need for ecosystems that can absorb and ameliorate air pollution. Demand is assumed to be highest in areas where there are likely to be high air pollution levels and where there are lots of people who could benefit from the air quality regulation service. This is an indicative model that combines two indicators of air pollution sources (log distance to roads, and % cover of sealed surfaces) and two indicators of societal need for air purification (population density, and Index of Multiple Deprivation health score). The scores for each indicator were normalised and combined with equal weighting. The final score was then projected on a 0 to 100 scale, relative to values present within the study area.

Results Air quality regulation demand is highest in urban centres as these have both higher air pollution levels and higher populations that would benefit from better air quality. The main road network is also clearly visible as a major pollution source, and where these main roads pass through built up areas, there is the highest demand for air quality regulation. On Map 11, the main orange/yellow area denotes the built-up parts of Stirling3. In the City Park area there is only limited demand for air quality regulation as very few people live directly in this area. Demand is focussed along the M9 on the western perimeter, the A811 that passes though the centre of the site, around Kings Park to the south and east, and particularly along the A84 and the edge of Raploch along the north-east edge of the site. There is greater demand in the River Project area, which passes through a number of communities, including Raploch, Riverside, Cornton and Causewayhead. Note that traffic is likely to increase under the proposed investments, potentially increasing demand for air quality regulation. The promotion of sustainable modes of transport should help to mitigate or eliminate this impact but considering this further is beyond the scope of the current project.

Balancing supply and demand for air quality regulation services By considering both the air quality regulation supply and demand maps (Maps 9-11), it is clear that planting (or maintaining) trees and woodland close to main roads and other pollution sources in built-up areas would be highly beneficial, with considerable benefits to society possible. Air pollution can be very localised, hence it is also important to consider the specific location of trees to gain the maximum benefit of this service. Trees are effective at mitigating the effects of air pollution. However, there are major difference in the ability of different species to intercept pollution. The location of trees relative to pollution sources also determines how effective they are at removing pollutants, with trees close to sources being the most effective. Urban woodland is particularly effective as it has high capacity to absorb pollution and is also situated in locations likely to have high demand for the service. Street trees can be very important at absorbing air pollution adjacent to busy urban roads at a local level. Planting of additional trees is an important consideration, particularly if traffic, and hence demand for this service, increases following the investments.

3 Note that the demand maps are shown at a broader scale than the previous supply maps, to highlight demand across the landscape and particularly in relation to the wider city of Stirling.

Natural Capital Solutions Ltd 46 Alive with Nature: The benefits of investing in the natural environment in Stirling

It is important that the right types of trees are planted in the right places, and databases are available that indicate the effectiveness of different species at absorbing air pollution. Other factors should also be taken into account when planting street trees, such as carbon sequestration ability, resilience to urban conditions, growth form and so on. Planting of trees also needs to be balanced against the desire for views of Stirling Castle.

Map 11: Air quality regulation demand across Stirling City.

Natural Capital Solutions Ltd 47 Alive with Nature: The benefits of investing in the natural environment in Stirling 4.8 Noise regulation capacity

What is it and why is it important? Noise regulation capacity is the capacity of the land to diffuse and absorb noise pollution. Noise can impact on health, well-being, productivity and the natural environment and the World Health Organisation (WHO) have identified environmental noise as the second largest environmental health risk in Western Europe (after air pollution). Major roads, railways, airports and industrial areas can be sources of considerable noise, but use of vegetation can screen and reduce the effects on surrounding neighbourhoods. Complex vegetation cover such as woodland, trees and scrub is considered to be most effective, although any vegetation cover is more effective than artificial sealed surfaces, and the effectiveness of vegetation increases with width.

How is it measured? The EcoServ noise regulation model was used, with some modifications. This is an indicative model, scored out of 100, rather than a mathematical model estimating noise levels. First, the capacity of the natural environment is mapped by assigning a noise regulation score to vegetation types based on height, density, permeability and year- round cover. Next, the noise absorption score in 30m and 100m radii around each point was modelled and the scores combined, which results in wider belts of vegetation receiving a higher score. The score was calculated for each 10m by 10m cell across the study area, and is scaled on a 0 to 100 scale, relative to values present within the mapped area. High values (red) indicate areas that have the highest capacity to absorb noise pollution.

Results Woodland is by far the most effective habitat at absorbing noise. However, the effects are modest, with reductions of 2-4 dB typically recorded across dense tree belts. The woodland belts on the slopes around Stirling Castle and Kings Park are the most effective areas at absorbing noise pollution under the baseline condition (Map 12). The trees present along the river are generally in thin belts, meaning that they are not particularly effective at regulating noise levels and overall baseline noise absorption levels are low in the River Project area. The new woodlands planned for the City Park would increase noise absorption, although the effect is predicted to be small (Map 13). The new tree plantings along the river are likely to be too small to have any real impact on noise levels, and other changes would have limited net impact. Overall, therefore, the noise regulation capacity of the landscape is expected to increase following the City Park investments and remain almost identical (very slight decrease) following the River Project investments (Table 12). Note that these scores show the average noise regulation capacity across each study area and is out of a maximum possible of 100 (in this case, if the whole area was covered in coniferous woodland). Hence this is not a physical flow, unlike the previous services, but is an indicative score.

Table 12: Mean noise regulation capacity score for the City Park and River Project baseline and investment scenarios. Noise regulation capacity Baseline Investment % Change (indicative score)

City Park 14.6 15.5 6.5 River Project 5.4 5.3 - 2.0

Natural Capital Solutions Ltd 48 Alive with Nature: The benefits of investing in the natural environment in Stirling

Map 12: Noise regulation capacity for the baseline condition for the City Park and River Projects.

Map 13: Noise regulation capacity under the proposed investments

Natural Capital Solutions Ltd 49 Alive with Nature: The benefits of investing in the natural environment in Stirling 4.9 Local climate regulation capacity

What is it and why is it important? Land use can have a significant effect on local temperatures. Urban areas tend to be warmer than surrounding rural land due to a process known as the “urban heat island effect”. This is caused by urban hard surfaces absorbing more heat, which is then released back into the environment, coupled with energy released by human activity such as lighting, heating, vehicles and industry. Climate change impacts are predicted to make the overheating of urban areas and urban buildings a major environmental, health and economic issue over the coming years. Natural vegetation, especially trees / woodland and rivers, are able to have a moderating effect on local climate. Local climate regulation capacity estimates the capacity of natural habitats to cool the local environment and cause a reduction in urban heat maxima.

How is it measured? EcoServ was used to model local climate regulation capacity. The model calculates the proportion of the landscape that is covered by woodland / scrub and water features within a 200m radius around each 10m by 10m cell across the study area. However, temperature regulating effects of woodland and water will also occur in nearby adjacent areas, with the distance of the effect dependent on the patch size of the natural area. To incorporate this effect, a buffer was applied around each woodland / water patch, with wider buffers modelled around larger natural sites. Note that this model only includes woodland / scrub and water features. All greenspace is beneficial compared to artificial sealed surfaces, but there is no information available on the relative contribution of different types of natural surfaces to local climate regulation. The model therefore focuses on the natural features with the most significant effects.

The score was calculated for each 10m by 10m cell across the study area, and is scaled on a 0 to 100 scale, relative to values present within the mapped area. Hence it is an indicative score. High values (red) indicate areas that have the highest capacity to regulate temperatures, keeping them cooler in the summer and warmer in the winter.

Results This model is based around woodland / scrub and water features, which are the most effective habitats at regulating local climate, hence the maps (Maps 14 & 15) highlight these features, with larger patches and the adjacent benefitting areas receiving the highest scores (shown as red). Under the baseline (Map 13), there are two distinct patches of woodland that are providing benefits in the City Park Area. Much of the River Project area is providing some benefit and it should be noted that the River Forth is effective at bringing local climate regulating services into the heart of the urban areas.

Under the investment plans for the City Park, there is a substantial increase in this service due to the addition of both water and tree features (Map 14). Local climate capacity increases slightly in the River Project area, predominantly due to the riverside loop wildlife sanctuary and additional tree planting. Overall, the indicative scores for the City Park increase by 40.8% (Table 13), one of the largest increase in any ecosystem service, although from a low baseline. The increase for the River Project is a more modest 2.7%. Table 13: Mean local climate regulation capacity score for the City Park and River Project baseline and investment scenarios. Local climate regulation capacity Baseline Investment % Change (indicative score)

City Park 10.9 15.4 40.8 River Project 19.9 20.4 2.7

Natural Capital Solutions Ltd 50 Alive with Nature: The benefits of investing in the natural environment in Stirling

Map 14: Local climate regulation capacity for the baseline condition for the City Park and River Projects.

Map 15: Local climate regulation capacity under the proposed investments.

Natural Capital Solutions Ltd 51 Alive with Nature: The benefits of investing in the natural environment in Stirling

4.10 Local climate regulation demand

What is it and how is it measured? Local climate regulation demand estimates societal and environmental need for ecosystems that can regulate local temperatures and reduce the effects of the urban heat island. Local climate regulation demand combines one indicator showing the location of areas suffering from the urban heat island effect (the proportion of sealed surfaces), with two indicators showing societal need for local climate abatement (population density, and proportion of the population in the highest risk age categories – defined as under 10 and over 65). Scores are on a 1 to 100 scale, relative to values present within the study area.

Results The map of local climate regulation demand (Map 16) clearly highlights the areas over which there is demand. In Stirling, demand is generally greatest in the more densely built-up areas, with patterns of demand influenced by urban layout and the presence of parks, the river corridor, and other greenspaces. Demand within the City Park area is very low due to the lack of houses within the boundary, although there is some demand around the periphery of the study area. Demand within the River Project area is also quite low due to the tightly defined boundary line used, but there is high demand from the adjacent community of Raploch and to a lesser extent from Riverside, Cornton and Causewayhead. The City Deal investments are unlikely to have much impact on demand as new sealed surfaces (e.g. car parks) are not being built close to existing housing areas.

Balancing supply and demand for local climate regulation services Demand for this service is focussed around the larger, more densely populated communities. The River Forth is particularly beneficial with respect to local climate regulating services as it is able to bring moderating conditions into the heart of the city and close to such communities, where there is high demand. Installing water features and planting trees in areas away from the river would be the most effective way to extend these benefits to other areas, particularly when these are installed close to or within built-up areas. Although regulating local climate and moderating the impacts of the urban heat island effect may be considered to be a relatively low priority in Scotland at present, its importance is likely to increase over time due to climate change and an increasing (and ageing) population in Stirling.

Natural Capital Solutions Ltd 52 Alive with Nature: The benefits of investing in the natural environment in Stirling

Map 16: Local climate regulation demand across Stirling City.

Natural Capital Solutions Ltd 53 Alive with Nature: The benefits of investing in the natural environment in Stirling 4.11 Water flow regulation

What is it and why is it important? Water flow regulation is the capacity of the land to slow water runoff and thereby potentially reduce flood risk downstream. Following a number of recent flooding events in the UK and the expectation that these will become more frequent over the coming years due to climate change, there is growing interest in working with natural process to reduce downstream flood risk. These projects aim to “slow the flow” and retain water in the upper catchments for as long as possible. Maps of water flow regulation can be used to assess relative risk and help identify areas where land use can be changed.

How is it measured? A bespoke model was developed, building on an existing EcoServ model and incorporating some of the features used in SEPA’s natural flood management (runoff reduction) maps (SEPA 2013). Runoff was assessed based on the following two factors: • Roughness score – Manning’s Roughness Coefficient provides a score for each land use type based on how much the land use will slow overland flow. • Slope score – based on a detailed digital terrain model, slope was re-classified into a number of classes based on the British Land Capability Classification and others. Each indicator was normalised from 0-1, then multiplied together and projected on a 0 to 100 scale, as for the other ecosystem services. Note that this is an indicative map, showing areas that have generally high or low capacity and is not a hydrological model. High values (red) indicate areas that have the highest capacity to slow water runoff.

Results The best locations for slowing water runoff are areas of woodland on flat land. The worst areas (blue on the map) are areas of impermeable surface and very steep slopes. In the baseline (Map 17), much of the City Park and River Project areas provide moderate levels of service provision, with the worst areas being the steep slopes around Stirling Castle and at the edge of King’s Park, and the industrial estate to the east of the railway station. Although note that the steep slopes are covered by woodland, so have the lowest runoff that can be achieved given the topography. The small patches of woodland on flat land next to the river are the best areas. Under the proposed investments (Map 18), the new areas of woodland on the flatter areas of the City Park increase the capacity of the land to slow water runoff, although this is partially offset by the increase in sealed surfaces due to the car parks and new infrastructure. Note that the model does not take into account the use of permeable paving, green roofs and other SuDS features that would reduce runoff if installed. Along the river, the new patches of trees increase capacity and show up on the map as red dots, but these are offset by the extensive new paths. Again, if permeable paving was used for the paths, this negative impact would be reduced. Overall, the indicative capacity for slowing water runoff following the City Deal investments is expected to show a slight increase in the City Park and a very slight decrease in the River Project area (Table 14).

Table 14: Mean water flow regulation for the City Park and River Project baseline and investment scenarios Water flow regulation Baseline Investment % Change (indicative score)

City Park 38.3 39.2 0.9 River Project 27.1 26.1 - 1.0

Natural Capital Solutions Ltd 54 Alive with Nature: The benefits of investing in the natural environment in Stirling

Map 17: Water flow regulation for the baseline condition for the City Park and River Projects.

Map 18: Water flow capacity under the proposed investments.

Natural Capital Solutions Ltd 55 Alive with Nature: The benefits of investing in the natural environment in Stirling 4.12 Water quality (soil erosion) regulation

What is it and why is it important? Water quality regulation maps the risk of surface runoff water becoming contaminated with high pollutant and sediment loads before entering a watercourse, with a higher water quality capacity indicating that water is likely to be less contaminated. Note that the focus is on sedimentation risk from agricultural diffuse pollution, hence built-up areas are not well accounted for in the existing model.

How is it measured? A modified version of an EcoServ model was developed, which assesses fine-scale erosion / sedimentation risk. It uses a modification of the Universal Soil Loss Equation (USLE) to determine the rate of soil loss for each cell. This is based on the following three factors:

• Distance to watercourse – using a least cost distance analysis, taking topography into account. • Slope length – using a flow accumulation grid and equations from the scientific literature. Longer slopes lead to greater amounts of runoff. • Land use erosion risk – certain land uses have a higher susceptibility to erosion and standard risk factors were applied from the literature. Bare soil is particularly prone to erosion.

Each of the three indicators were normalised from 0-1, then added together and projected on a 0 to 100 scale. As previously, this is an indicative map, showing areas that have generally high or low capacity and is not a process-based model. High values (red) indicate areas that have the greatest capacity to deliver high water quality.

Results Arable fields, and especially those close to watercourses score least well for this ecosystem service. The City Park achieves a high score under the baseline (Map 19) as much of it is not close to a watercourse and none is currently arable or bare ground. Woodland is the highest scoring feature. The River Project area scores less well as it is all obviously close to a watercourse, although only a few of the adjacent fields are arable. Under the proposed investments (Map 20), the water quality regulation score decreases (which means that sedimentation risk increases) (Table 15), in the City Park, as new water features have been added which means that the distance to watercourses has decreased. Also, the proposed maize maze is apparent on the map (Map 20) as a lower scoring yellow patch, as this field is likely to be bare (and therefore more prone to erosion), in the autumn months. On the other hand, water quality regulation is projected to increase slightly for the River Project (Table 15), predominantly due to the riverside loop wildlife sanctuary, where low scoring arable fields are being replaced with semi-natural habitats with year-round cover. In addition, in other locations where arable fields are adjacent to the river, wildflower strips are being created close to the river, which would reduce and trap runoff.

Table 15: Mean water quality (soil erosion) regulation score for the City Park and River Project baseline and investment scenarios. Water quality regulation Baseline Investment % Change (indicative score)

City Park 85.9 80.6 - 5.3 River Project 64.0 65.4 1.4

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Map 19: Water quality regulation for the baseline condition for the City Park and River Projects.

Map 20: Water quality regulation under the proposed investments

Natural Capital Solutions Ltd 57 Alive with Nature: The benefits of investing in the natural environment in Stirling 4.13 Agricultural production

What is it and why is it important? Agricultural production is measured as the capacity of the land to produce food under current farming practices. Livestock and arable agriculture are important land uses for providing food in the Stirling area. The City Park and River Project investments would result in changes in land use away from agriculture, so it is important that this impact is taken into account.

4.15.2 How is it measured? The number of livestock and the area of each crop type for the Stirling baseline were obtained from the Economic Report on Scottish Agriculture’s (2017) Agricultural Census. The proportions of each crop and livestock type were taken from the sub-region ‘East Central’. We assume, where land use is agricultural in the baseline and investment sites, it would have been farmed with a crops and livestock mix typical of this wider sub-region.

Results Approximately 46% of the City Park (112.7 ha) is currently under agricultural production, all of it under livestock, with no arable (Table 16). In the River Project area, 35% is currently grazed and 9.7% is under arable. The area of agricultural land would decrease under the investment scenario in both the City Park and the River Project sites. The number of livestock would also decline in a pattern that reflects the loss of grazing land, with a 50% decline in the City Park and a 24% decline in the River Project area.

Table 16: Agricultural production in the City Park and River Project baseline and investment scenarios. Agricultural production Baseline Investment Change % Change Arable (ha) City Park 0.0 0.0 0 0 River Project 18.3 0.2 - 18.1 - 98.9 Grazed (ha) City Park 112.7 56.0 - 56.6 - 50.3 River Project 90.5 68.5 - 22.0 - 24.3

Natural Capital Solutions Ltd 58 Alive with Nature: The benefits of investing in the natural environment in Stirling 4.14 Forest products – timber and wood fuel

What is it and why is it important? Forestry remains an important component of the rural economy and many areas of woodland are still valued primarily on their timber value. Timber is an important product of woodlands and is the raw resource of the timber industry. Sustainable managed woodland produces timber which is important in contributing to processing mills and factories that produce wood-based products, and also produces woodfuel for the generation of renewable heat and electricity.

How is it measured? Information on the species mix and yield class for different types of woodland in the Stirling area was collated, as described in the carbon sequestration section (Section 4.3). The physical flow of timber production was estimated using the average yield classes for each species, multiplied by the area of the woodland. There is no coniferous woodland in the City Park and River Project sites. The annual average yield of timber per hectare for each woodland type was also mapped in GIS.

Results The locations that could provide timber and woodfuel before and after investment (Maps 21 and 22) are the same woodlands as identified in previous sections. Most of this woodland, and all of the new woodland planned, is broadleaved, which can typically produce approximately 6 m3 of timber or woodfuel per ha per year in the Stirling area (averaged over 100 years). It was assumed that this woodland would not be actively managed for timber, but could still be periodically harvested for woodfuel, or used as woodchip following routine maintenance. The increase in the size of woodland habitat in the City Park and River Project following the City Deal investments drives an increase in the timber / woodfuel production service. As mentioned in the carbon sequestration section, the area of new trees planned for the City Park investment is 4.5 times higher than in the River Project investment, hence the bigger increase in timber production. Overall, the timber / woodfuel capacity of the City Park would double following investment, while the capacity of the River Project would increase by 28% compared to the (low) baseline.

Table 17: Annual physical flows of the timber / wood fuel production service in the City Park and River Project baselines and investment scenarios Timber production Baseline Investment Change % Change (m3 /year)

City Park 96.12 144.54 + 48.42 50.4 River Project 39.06 49.97 + 10.91 27.9

Natural Capital Solutions Ltd 59 Alive with Nature: The benefits of investing in the natural environment in Stirling

Map 21: Timber production capacity for the baseline condition at for the City Park and River Projects.

Map 22: Timber production capacity under the proposed investments.

Natural Capital Solutions Ltd 60 Alive with Nature: The benefits of investing in the natural environment in Stirling 4.15 Accessible nature capacity

What is it and why is it important? Access to greenspace is being increasingly recognised for the multiple benefits that it can provide to people (see Section 2). Research has also shown that there is a link between well-being and perceptions of biodiversity and naturalness. The Scottish Government and others have published guidelines that promote the enhancement of access, naturalness and connectivity of greenspaces. The two key components of accessible nature capacity are therefore public access and perceived naturalness. Both of these components are captured in the model, which maps the availability of natural areas and scores them by their perceived level of “naturalness”.

How is it measured? An EcoServ model was used to map accessible nature capacity. In the first step, accessible greenspaces were mapped. These were determined from OS Open Greenspace data, Stirling Council’s Open Space Audit, and data sets on local nature reserves, accessible woodlands and others, and a summary of the results is shown in Table 4 (Section 2.1). Greenspaces that did not have full public access (e.g. golf courses, institutional grounds) were removed from further analysis. The retained areas were then scored for their perceived level of naturalness, with scores taken from the scientific literature. Naturalness was scored in a 300m radius around each point, representing the visitors experience within a short walk of each point. The resulting map shows accessible areas, with high values representing areas where habitats have a higher perceived naturalness score. Scores are on a 1 to 100 scale, relative to values present within the study area. White space shows built areas or areas with no public access. Larger continuous blocks of more natural habitat types will have higher scores than smaller isolated sites of the same habitat type. One consequence is that linear routes that pass through land with no other access will not score highly.

Results Under the current situation, there is fairly limited public access across either site (Map 23). In the City Park, although most of the area is greenspace, the majority is farmland and golf course, without full public access. Full public access is currently limited to the Back Walk and Gowanhill areas surrounding Stirling Castle, and the public park in King’s Park to the south of the site. There is even less access in the River Project area, apart from some linear strips along Riverside, Raploch and behind the railway station. These are relatively narrow strips of habitat, hence they show as blue on the maps. Accessible nature would increase substantially under the City Deal proposals (Table 18). In the City Park, the whole central part of the site would provide a substantial new area of public access to greenspace (Map 24). In the River Project area, the riverside loop wildlife sanctuary would provide entirely new access, and access will be improved throughout the length of the river, especially around the meander loops at the upstream (north-west) end of the site. Overall, accessible nature capacity would be expected to increase by 42% for the City Park and more than triple (albeit from a low base) for the River Project.

Table 18: Mean accessible nature capacity score for the City Park and River Project baseline and investment scenarios. Accessible nature capacity Baseline Investment % Change (indicative score)

City Park 28.9 41.1 42.0 River Project 8.8 29.0 229.6

Natural Capital Solutions Ltd 61 Alive with Nature: The benefits of investing in the natural environment in Stirling

Map 23: Accessible nature capacity for the baseline condition for the City Park and River Projects.

Map 24: Accessible nature capacity under the proposed investments.

Natural Capital Solutions Ltd 62 Alive with Nature: The benefits of investing in the natural environment in Stirling

4.16 Accessible nature demand

What is it and why is it important? This indicates where there is greatest demand for accessible nature, which is strongly related to where people live. Research, including large surveys such as Scotland’s People and Nature Survey (SPANS), have shown that there is greatest demand for accessible greenspace close to people’s homes, especially for sites within walking distance.

How is it measured?

This model maps sources of demand, taking no account of habitat, based on three indicators: population density (based on 2011 census data), health scores (from the Index of Multiple Deprivation), and distance to footpaths and access points. The three indicators are calculated at two different scales, as demand is strongly related to distance. The Stirling Open Space Strategy 2012-17 (Stirling Council 2012) and results from SPANS (TNS 2014) were used to determine appropriate distances. The distances chosen (and rationale) were: 500m (Stirling Council benchmark – all residential properties should have access to semi-natural areas / green corridors within this distance), and 3.2 km (typical distance travelled by all visitors using all modes of transport to greenspaces). The three indicators were normalised from 0-1, then combined with equal weighting at each scale and then the two different scales of analysis were combined and projected on a 0 to 100 scale. High values (red) indicate areas (sources) that generate the greatest demand for accessible nature.

Results Demand for accessible nature is focussed around where people live, hence demand is centred around the built-up parts of Stirling (Map 25). Demand in the City Park Area is moderate, as parts are within easy walking distance of the surrounding communities, especially Raploch, Kings Park and Cambusbarron East, but the central and north-western parts of the site are more distant. Much of the River Project area has high demand, with the exception of the most upstream and downstream sections. This demand is driven by the close proximity of the communities of Raploch, Riverside, Cornton and Causewayhead, and these communities are predicted to gain the most from enhancing access to greenspaces along the river.

Balancing supply and demand for accessible nature Much research has shown that people travel most frequently to greenspaces very close to their homes, and Stirling Council (and others) recommend that everyone should have access to at least some open space within 300m (5 minutes walk) and access to semi-natural areas / green corridors within 500m. Furthermore, surveys in both England and Scotland have shown that the median distance that people will travel to visit even high quality greenspace is typically about 3.2 km (2 miles). The River Project, in particular, is ideally placed to cater for local demand as it passes directly alongside several different communities within Stirling, offering the chance for access to high quality green and blue space right on peoples’ doorsteps. The City Park also has a role to play in meeting local demand, but in addition is expected to attract people from further afield as it becomes both a destination greenspace in its own right and the main gateway into the city. There is now a vast amount of evidence showing the benefits of greenspace, particularly in built-up areas (see Section 2). Furthermore, research has shown that people gain greater well-being from visiting sites that they perceive to be more natural and richer in biodiversity. This shows that as well as providing access to green and blue space as part of the City Deal investments, it is important that the greenspace is of a high quality and as natural as possible. Much of the City Park is currently planned to be amenity grassland,

Natural Capital Solutions Ltd 63 Alive with Nature: The benefits of investing in the natural environment in Stirling which is intermediate in terms of its perceived naturalness, hence there is scope to enhance this score and the phycological well-being benefits that this area provides, by planting areas of more natural habitats such as additional woodland, semi-natural grassland and wetland habitats.

Map 25: Accessible nature demand across Stirling City

Natural Capital Solutions Ltd 64 Alive with Nature: The benefits of investing in the natural environment in Stirling 4.17 Recreation

What is it and why is it important? The importance of access to greenspace in urban environments is increasingly recognised, as outlined for accessible nature (Section 4.15). Visits to natural areas have been shown to enhance physical and mental health and well-being, increase social cohesion and contribute greatly to the local economy. This service is related to that of accessible nature, as both are based around accessible greenspaces, but recreation is concerned with estimating the annual number of visits, whereas accessible nature is concerned with the naturalness of the sites.

How is it measured?

To calculate the physical flow of the recreation service in the baseline and investment scenarios, we used data from the Scotland’s People and Nature Survey (SPANS) 2013-14. The total number of visits (6,332,800 or 1.6% of the total visits across Scotland) to the outdoors in the Stirling Local Authority area were derived from question REC12 of SPANS (TNS 2014). This area was much larger than the city area of Stirling on which this study is focused. The visit estimate was, therefore, adjusted to the smaller area based on the population of Stirling City being 48% of the population across Stirling Local Authority. In order to estimate the number of visits to the City Park and River Project baseline and investment scenarios, the number of visits per hectare of publicly accessible greenspace in the Stirling baseline was calculated, and then applied to the areas of publicly accessible greenspace in the City Park and River Project baseline and investment scenarios.

Results The number of outdoor visits within Stirling city was estimated as 3,090,406 per annum. The number of visits to the City Park and River Projects under the baseline are shown in Table 19 and the accessible areas are shown in Map 23 (note that the colour does not indicate visit numbers). The increase in accessible greenspace in both the City Park and River project investment scenario (Map 24) drives an increase in the number of visits to these areas. The River Project has a greater increase in accessible greenspace than the City Park under the investment scenario, hence a slightly bigger increase in the number of visits (Table 19). It is important to note that the estimate of recreation used here is crude as it is based on average greenspace use in Stirling and does not take into account the quality of the space, the surrounding population, or displacement and substitution effects. As such, it should be treated with caution. However, the City Park, in particular, is expected to be a high-quality destination greenspace, potentially attracting people from further afield than average local greenspaces. It is therefore quite possible that the visit numbers presented here are an underestimate.

Table 19: Annual physical flows of the recreation service in the City Park and River Project baselines and investment scenarios Recreation (visits) Baseline Investment Change % Change

City Park 395,406 955,365 + 559,959 142 River Project 140,589 720,518 + 579,929 412

Natural Capital Solutions Ltd 65 Alive with Nature: The benefits of investing in the natural environment in Stirling 4.18 Physical health

What is it and why is it important? There is a growing body of evidence to show the positive effect that the natural environment can have on mental and physical health and well-being. The opportunities for physical exercise that the natural environment provides has been shown to reduce diseases related to lack of exercise (for example, heart disease, stroke, diabetes and certain types of cancers). However, there is still a limited understanding of how spatial location, access and different types of natural capital and its quality will affect the number of visitors to greenspaces.

How is it measured?

The physical flow of health was measured by calculating the quality of life years (QALYs) from active visits to Stirling City. This is a similar approach to White et al. (2016), a study of the implications to health of recreational physical activity in England. National data on active visits to local greenspace was obtained from the Scotland’s People and Nature Survey (SPANS) 2013-14. The proportion of national visits were applied to the Stirling city level, as the demographic structure of Stirling city is similar to that of the whole of Scotland. Visits to local greenspaces were used, instead of data across a whole range of habitats, as this seemed the most appropriate reflection of how greenspace might be used in an urban context. It was not possible to extract data on active visits to urban greenspaces alone due to small sample sizes. SPANS data enables us to be certain that all respondents that reported they had met the physical activity guidelines (completed 150 mins of physical activity in a week), did so in green open spaces.

Results Across the city of Stirling it was calculated that 5014 individuals met physical activity guidelines in local greenspaces. To ensure that they were likely to have completed this exercise within the local greenspaces, only the proportion of people who visited local greenspaces several times a week, every day and more than once a day, were used in the valuation of this service. In total, these active visits result in 267.7 QALYs per year. There were no data on the number of people who would meet physical activity guidelines within the City Park site and River Project baseline or investment scenarios. Assumptions were, therefore made, based on an understanding that 61% of people that live within 5 mins of a greenspace will visit it more than once a week (Greenspace Scotland, SNH, Central Scotland Green Network Trust 2017), and that 18.62% of these frequent local greenspace visitors will meet activity guidelines (SPANS 2013-14). To understand the impact of the City Park and River Project investments on the physical well-being benefits the number of houses that would be within 300m (5 mins walk) of the nearest 2 ha greenspace was calculated in GIS, and then multiplied by the average number of people per household in Stirling from the 2011 census (2.29). This resulted in 133 extra people that would be within 5 mins walk of a greenspace in the City Park area, and 2295 for the River Project area following investment. This is 0.81 and 13.92 QALYS per year respectively. This is a very conservative estimate, the increase in visitors to greenspaces that meet physical activity guidelines is likely to be higher. In particular, as a destination greenspace, the City Park is likely to attract many more people than just those living within 5 minutes walk, some of whom would meet their activity guidelines in the park. However, there is no effective way to make this estimate, hence we have taken a cautious approach focusing on local use. Also, increasing access to greenspace alone, is unlikely to significantly increase physical activity within them. Physically active visitors would only increase if initiatives are put in place to deal with the social issues that underlie physical inactivity, as well as schemes that encourage people to visit their local greenspaces.

Natural Capital Solutions Ltd 66 Alive with Nature: The benefits of investing in the natural environment in Stirling 4.19 Property values

What is it and why is it important? The proximity of greenspace can have a positive effect on residential and commercial property values. House prices show significant positive price variations with greater proximity to greenspace and water considered separately and together (Moranto et al. 2011). Conversely, increasing distance to natural amenities is ‘unambiguously associated with a fall in prices’ (Moranto et al. 2011). Estimates of the effect on capital value of residences of distance from and type/quality of greenspace vary considerably in the research literature, mostly ranging between about 2% and 7% of capital value. The strength of the effects reflects particular socio-demographic and housing characteristics (Luther & Gruehn 2001, Dunse et al. 2007, Brander & Koeste 2010), and the types of greenspace and environmental features (Luttik 2000, Panduro & Veie 2013, Schlapfer et al. 2015). In some cases, however, proximity to greenspace may depress property values if associated with anti-social behaviour (Rolls & Sunderland 2014). Furthermore, enhanced property prices could affect the affordability of housing and displace the type of residents who might gain most from the provision of greenspace (Wolch et al. 2015). In the commercial property market, while there is a perceived association between commercial rents and provision of green and open space, there is limited research evidence of the link. However, a survey of the commercial real estate sector indicated that over 95% of respondents expressed a willingness to pay at least 3% more for proximity to ‘open’ space, including city parks (Gensler/ ULI 2011).

How is it measured?

The physical flow of this service is simply the number of properties that lie at particular distances from the City Park and River Project sites. However, as several parts of these sites already contain greenspace, distances were measured only to new areas of greenspace created as a result of the investments. For the purpose here, the number of residential and commercial properties within incremental bands of radii of 0 - 100 m, 101- 250m and 251- 500m were extracted from the basemaps in GIS.

Results The City Park site already contains areas of publicly accessible greenspace close to a number of properties, in particular King’s Park and the Back Walk and Gowanhill areas surrounding Stirling Castle. Much of the new greenspace created is towards the centre of the site and is not immediately adjacent to many properties, hence the numbers of properties potentially affected is relatively low. In contrast, the River Project runs close to a large number of houses and industrial areas, although the change in habitats and views would be less significant than for the City Park (this is taken into account in the monetary valuation, described in Section 5.8). A total of 1048 residential properties and 173 commercial properties lie within 500 metres of the City Park, while 4412 residential and 1127 commercial properties lie within 500m of the River Project (Table 20).

Table 20: Number of residential and commercial properties within distance bands of the City Park and River Project. Number of properties Residential properties Commercial properties within distance bands (m) 0-100 101-250 251-500 0-100 101-250 251-500 City Park 54 171 823 55 50 68 River Project 1102 1519 1791 268 324 535

Natural Capital Solutions Ltd 67 Alive with Nature: The benefits of investing in the natural environment in Stirling 4.20 Overall results

The overall physical flow account and indicative scores for each ecosystem service are shown in Table 21 for the City Park and Table 22 for the River Project. Under the proposed investment for the City Park, the flow of most ecosystem services would increase, with the exception of water quality, which would decrease by a small amount, and agricultural production, which would decline by almost half. The stock of carbon stored in the soil and vegetation would also undergo an almost negligible decline, although this does not take into account the carbon that would be stored under the new roads and infrastructure, which would be likely to reverse this outcome. The largest increases are for net carbon budget (taking into account carbon sequestration and agricultural emissions) and recreation, with increases of 35-50% also recorded in many of the other services. The carbon budget shows that the City Park would move from being a net source of greenhouse gas emissions to a net sink following the investment. Overall, the City Park investment appears to have the potential to deliver net gain in natural capital benefits, although a number of simple measures could be taken to improve capacity further (see Section 7.3). The gain under the investment is driven predominantly by the planting of new woodland and the creation of new public access across a large area. Woodland is particularly good at delivering a wide range of benefits and enhancing public access on the edge of cities can provide benefits for a large number of people. In addition, almost all of the habitat that is lost following investment is improved grassland, which generally supplies few natural capital benefits, apart from agricultural production.

Table 21: Physical flow account for the City Park under the baseline and proposed investments and predicted changes.

Natural Capital benefit Units Baseline Investment Change % change Annual physical flows Carbon sequestration tCO2e per year 168.3 231.2 62.9 37.4 **Agricultural emissions tCO2e per year -223.1 -116.5 106.6 47.8 **Carbon budget tCO2e per year -59.9 109.6 169.5 283.0 Air quality regulation - PM10 kg PM10 per year 1047.9 1187.3 139.4 13.3 Air quality regulation - SO2 kg SO2 per year 12.08 12.69 0.61 5.0 Agricultural production Area (ha) per year 112.7 56.0 -56.6 -46.4 Timber / wood fuel m3 per year 96.1 144.5 48.4 50.4 Recreation No. visits per year 395,406 955,365 559,959 141.6 Physical health QALYs NA NA 0.81 -

Indicative scores Noise regulation Indicative 14.6 15.5 0.9 6.5 Local climate regulation Indicative 10.9 15.4 4.5 40.8 Water flow regulation Indicative 38.3 39.2 0.8 2.1 Water quality regulation Indicative 85.9 80.6 -5.3 -6.2 Accessible nature Indicative 28.9 41.1 12.2 42.0

Natural capital stocks Carbon storage tonnes carbon 29,949 29,938 -11 -0.04 **A negative figure for agricultural emissions and carbon budget indicates emissions, a positive figure indicates sequestration.

Natural Capital Solutions Ltd 68 Alive with Nature: The benefits of investing in the natural environment in Stirling

Under the proposed investment for the River Project, the flow of most natural capital benefits would also increase, although in most cases not quite as much as for the City Park. Recreation and accessible nature are the services that show much the greatest increases, and increase to an even greater degree than in the City Park, although this is primarily due to a lower baseline position. Three natural capital benefits would be likely to decline following investment: water flow regulation and noise regulation, which show a modest decline, and agricultural production, which would decline by 37%. Like the City Park, the proposed investments for the River Project have the potential to deliver net gain in natural capital benefits. Also like the City Park, the largest individual gains would be due to increasing public access to an area where access is fairly limited at present, and the greatest spread of benefits would be achieved by planting trees and orchards along the river. Virtually all of the habitat lost to the new investments would be cultivated land and improved grassland which provide agricultural production but few other benefits. The level of benefits provided by the River Project area under both the baseline and investment scenarios is lower than for the City Park in almost all cases. This is most likely because there are few trees or patches of woodland along the river and 30% of the area is taken up by the river itself. Although water provides a number of benefits, these are generally not as high as for many land-based benefits or are not captured by this assessment. One exception is local climate regulation, where water is good at moderating local air temperatures and the river brings this benefit right through the heart of the city, hence the River Project scores more highly for this service than the City Park.

Table 22: Physical flow account for the River Project under the baseline and proposed investments and predicted changes.

Natural Capital benefit Units Baseline Investment Change % change Annual physical flows Carbon sequestration tCO2e per year 54.2 68.3 14.1 26.1 **Agricultural emissions tCO2e per year -203.4 -135.8 67.6 33.2 **Carbon budget tCO2e per year -149.2 -67.5 81.7 54.8 Air quality regulation - PM10 kg PM10 per year 468.0 542.3 74.2 15.9 Air quality regulation - SO2 kg SO2 per year 6.09 6.92 0.83 13.6 Agricultural production Area (ha) per year 108.8 68.6 -40.2 -36.9 Timber / wood fuel m3 per year 39.1 50.0 10.9 27.9 Recreation No. visits per year 140,589 720,518 579,929 412.5 Physical health QALYs NA NA 13.92 -

Indicative scores Noise regulation Indicative 5.4 5.3 -0.1 -2.0 Local climate regulation Indicative 19.9 20.4 0.5 2.7 Water flow regulation Indicative 27.1 26.1 -1.0 -3.8 Water quality regulation Indicative 64.0 65.4 1.4 2.2 Accessible nature Indicative 8.8 29.0 20.2 229.6

Natural capital stocks Carbon storage tonnes carbon 30,968 33,172 2204 7.1 **A negative figure for agricultural emissions and carbon budget indicates emissions, a positive figure indicates sequestration.

Natural Capital Solutions Ltd 69 Alive with Nature: The benefits of investing in the natural environment in Stirling

As well as considering the impact of the proposed investments on natural capital benefits, it is also important to consider demand and location in relation to demand. Demand is not relevant for some services such as carbon sequestration, timber and agricultural production, but for others, demand can vary considerably depending on location. Demand for air quality (and noise) regulation, depends on the source of the pollution and the location of people who require the benefits. A woodland or strip of trees can be effective at mitigating the effects of air pollution, but it is delivering a greater benefit to people if it is located where people live and will be most effective when located close to the pollution source. The River Project would be potentially highly effective at delivering air quality, noise and local climate regulation services, as it passes right through a number of communities that would benefit directly from these services. Demand for accessible nature, recreation and physical health are also localised as most people will not travel far to visit greenspaces or to exercise in the outdoors. Whilst the City Park may be important at attracting people from further afield and tourists, the River Project may actually have a greater impact on local recreation and physical activity as it is located right on the doorstep of a larger local population. Locational factors and issues of equity are explored further in Section 8.2.

A brief note on flood risk The impact of the City Deal investment proposals on flood risk would be minimal, although this assessment excludes the proposals for a flood alleviation scheme, which is an entirely hard engineered proposal that does not utilise natural flood risk strategies. Flood risk in Stirling is dominated by the risk of flooding from the River Forth (fluvial flooding), and the catchment of the River Forth is extremely large compared to the size of the investment sites. Therefore, any reduction in runoff achieved as part of the City Park and River Projects would have a trivial impact on river water levels. The impact on pluvial (rainwater) flooding could be more significant and the indicative water flow (runoff) model described in Section 4.11 shows a small reduction in runoff for the City Park project, which would be larger if permeable paving and green roofs were installed. However, most of the City Park actually drains into small streams to the west of the site, before entering the Forth upstream of Stirling, rather than flowing through the city. Any impact on people and property is therefore likely to be limited. Note, however, that the visitor centre and one of the main car parks planned for the City Park, is in a zone that is considered at high risk of surface water flooding, hence this would need to be taken into account during detailed planning.

Natural Capital Solutions Ltd 70 Alive with Nature: The benefits of investing in the natural environment in Stirling 5. Monetary flow account: Annual monetary value of natural capital benefits before and after investment

The annual monetary value of eight natural capital benefits were calculated for the City Park and River Project baseline and investment scenarios. The monetary flow account is constructed using the data from the physical flow account (Section 4) and shows the economic value of the private and public benefits that flow from the natural capital assets of these sites. A summary of the approach taken and the benefits that have been valued is provided in Table 23.

Table 23: Summary of the natural capital benefits that have been valued and the links between the physical flows and monetary flows for each benefit.

Natural capital benefit Physical flow Monetary valuation

Carbon sequestration Quantity of CO2 sequestered £/tonne of CO2

Greenhouse gas emissions from Tonnes CO2e/ha £ /ha/year agriculture

Air quality regulation Tonnes of PM10 and SO2 Costs avoided £/tonne of absorbed PM10 and SO2 /year

Agricultural production Yield/ha £ /ha/year

Timber/woodfuel production m3/ha £/m3/year

Recreation Number of visits Welfare gain/visit/year (£)

Physical health No. of active visits & £/QUALY/year Quality adjusted life years

Property value Number of residential & Increase in property values commercial properties within (£) buffer distances

In addition, the value of increased tourism was also calculated and is included in Section 5.9. This is not purely a natural capital benefit, but It is impossible to determine the relative role that enhancing natural capital and environmental image would play in attracting visitors to Stirling, compared to the impact of new grey infrastructure, facilities and events. Increased tourist numbers would likely be due to a complex interaction of a number of factors including natural capital, is predicted to be an important benefit of the investments and should be captured in the analysis.

5.1 Carbon sequestration Carbon is increasingly being given a monetary value and forms the basis of Payments for Ecosystem Services (PES) schemes such as the Woodland Carbon Code. Monetary flows were calculated using the UK Government’s low, central and high non-traded carbon prices for 2017 (£32, £64, £96) (HM Treasury 2017). This approach reflects the estimated costs of abating carbon emissions to meet national policy objectives. The present value (PV) of the ability of the woodland created to sequester carbon into the future was

Natural Capital Solutions Ltd 71 Alive with Nature: The benefits of investing in the natural environment in Stirling calculated over a 50-year period, using the discount rates suggested in HM Treasury (2011), and the formula in ONS (2016). An averaged value of carbon sequestration that accounts for change over time was used and it was assumed that the area of woodland remains static. The projected prices of carbon over the time period were used. The increase in the woodland habitat due to the investment at the City Park and River Project sites would increase the annual value of the carbon sequestration service, and, therefore, the overall value of the natural capital asset (Table 24). The spatial location and percentage change in habitats are fully described and mapped in Section 4 and the asset values (present value) are shown as part of the Economic Appraisal (Section 6).

Table 24: Central annual monetary flows of the carbon sequestration service provided by the woodland assets of the City Park and River Project baseline and investment scenarios (£ 2017). Carbon sequestration Baseline Investment Change (£ / year) City Park 10,771 14,795 + 4,024 River Project 3,467 4,371 + 904

5.2 Agricultural emissions

The physical flows of agricultural (greenhouse gas) emissions were measured in terms of CO2 equivalents, hence they could be valued using the UK Government’s non-traded carbon prices in exactly the same way as described above. The PV (present value) was estimated over a 50 year period, using projected prices of carbon over that time period. The area of agricultural land would decrease substantially under the investment scenario in the City Park and the River Project sites. This means there would be a concurrent reduction in the agricultural emissions associated with agricultural production. The City Park investment scenario shows a reduction of 106.6 tCO2e per year, and the River Project a reduction of 67.6 tCO2e per year, with the associated change in monetary value as costs avoided (Table 25).

Table 25: Annual monetary flows of agricultural emissions in the City Park and River Project baseline and investment scenarios (£ 2017). Agricultural emissions Baseline Investment Change (£ / year) City Park - 14,276 - 7,456 + 6,820 River Project - 13,014 - 8,691 + 4,323

5.3 Air quality regulation The air quality regulation service was valued using guidance from Defra that provides estimates of the damage costs per tonne of emissions across the UK (Defra 2015b). These are social damage costs based on avoided mortality and morbidity. Therefore, it was assumed that the value of each tonne of absorbed pollutant by the woodland and grassland assets was equal to the average damage cost of that pollutant.

The PM10 damage cost estimates depend on the location (urban or rural) and source of pollution. Stirling is classified as urban, but it is difficult to categorise it into the size of urban for which damage costs are quoted by Defra (2015b). Therefore, an average was taken across small – big sizes for low, central and high

Natural Capital Solutions Ltd 72 Alive with Nature: The benefits of investing in the natural environment in Stirling estimates (2015 prices per tonne of PM10: low = £58,139, central = £74,256, high = £84,382) adjusted to

2017 prices. The low, central and high average damage cost for SO2 across all locations was used (2015: £1581, £1956, £2224), adjusted to 2017 prices. The present value (PV) of the ability of the woodland and grassland to provide air quality regulation services into the future was calculated over a 50 year period as above. It was assumed that the rate of absorption and damage cost of PM10 and SO2 would be constant over time, as well as the area of woodland and grassland habitats. The increase in the woodland habitat due to the investment at the City Park and River Project sites would increase the annual value of the air pollution regulation service for both PM10 and SO2 (Table 26), and increase the overall value of the natural capital assets.

Table 26: Central annual monetary flows of the air quality regulation service (PM10 and SO2) of the woodland and grassland assets of the City Park and River Project baseline and investment scenarios (£ 2017). Air quality regulation Baseline Investment Change (£ / year)

PM10 City Park 80,800 91,546 + 10,746 River Project 36,086 41,810 + 5,724

S02 City Park 24.5 25.8 + 1.3 River Project 12.4 14.1 + 1.7

5.4 Agricultural production With respect to the value of provisioning ecosystem services from agricultural land, estimates were derived of the economic value of land, net of all non-land costs. Net Farm Income (NFI), the return to farm operators once all expenses have been deducted, were obtained from the Scottish Farm Business Survey for the main types of agricultural land use and farming systems in the Stirling area, namely for lowland cattle and sheep farms and arable (cereal) farms. This takes into account yields (for crops) and farm gate prices, to give gross output, and subtracts typical variable costs (e.g. fertilizers, seeds, sprays, husbandry, feed and forage costs) and fixed costs (labour, machinery, fuel, buildings). Annual NFI estimates were obtained for the period 2011/12 to 2015/16. These were then adjusted to remove the effects of Basic Farm Payments (income support), to remove any charges for imputed (unpaid) rent, to include charges for the imputed value of unpaid family labour, and to include financing charges. This gives a return (an economic rent) to the land resource itself after deducting all costs associated with production except for land ownership and rental costs, and excluding income support subsidies. The annual estimates of adjusted NFI were inflation adjusted to 2017 prices, and a mean estimate was derived for the period. The central estimate here, at £-76/ha/yr and £-80/ha/yr for lowland livestock and cereal farms respectively, excludes financing charges that are known to vary considerably according to farm circumstances (Table 27). It is noted that these central estimates are negative, reflecting the high dependency on income support. Low and high estimate are also given. There is considerable uncertainty regarding the support regime for agriculture following the UK departure from the European Union. The estimates of the economic added value of agricultural land were combined with estimates of grassland and arable land use areas (ha) for the baseline and the investment scenarios, drawing on observations of land use in the project area checked against Farm Business Survey data from Scotland’s East Central Region. For the City Park and River Project baseline and investment scenarios, all land areas remaining as arable and grazed land were assumed to maintain the same economic returns to agricultural land as the baseline.

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Table 27: Estimated economic value of agricultural production from farm land in the vicinity of Stirling City. Agricultural production Lowland cattle Cereals (£ / ha / year) & sheep Net Farm Income 157 42 minus Basic Farm Payment revenues 212 179 plus imputed rent 72 122 minus imputed family labour 92 65 minus financing charges 42 17 Adjustment to NFI -275 -140 Value added by agricultural land -118 -97 Central value (excluding financing) -76 -80 Low value -118 -97 High value 137 99 Based on mean inflation adjusted values for 2011/12 to 2015/16 Scottish Government Farm Business Survey 2015-16, released 27th April 2017

The area of agricultural land decreases under the investment scenario in the City Park and the River Project sites and, given agriculture's dependency on income subsidies, this results in a small economic gain (Table 28). The small areas and sums involved are unlikely to result in significant wider economic impacts and therefore are not subject to further assessment.

Table 28: Annual monetary flows of agricultural production in the City Park and River Project baseline and investment scenarios (£ 2017).

Agricultural Production Baseline Investment Change (£ / year) City Park - 8,562 - 4,595 + 3,967 River Project - 8,341 - 5,217 + 3,124

5.5 Forest products – timber & woodfuel The monetary flows of timber production were calculated using the following formula: Unit value of timber (£/m3) x Annual volume of timber (m3/ year) The price for softwood in 2017 was taken from the Forestry Commissions Coniferous Standing Sales Price Index (Forestry Commission 2017) and was £19.05/m3. The price for broadleaved timber ranges from £15/m3 to high quality timber reaching £250/m3 standing (ABC 2015). It is assumed that most of the wood produced in the urban area would be used for woodfuel, so a conservative estimate is made using the lower price inflated to 2017 prices. The present asset value of the ability of the woodland created to provide timber into the future was calculated over a 50 year period, using the discount rates suggested in HM Treasury (2011), and the formula in ONS (2016). It was assumed that the management and extraction rate does not change over time and that the area of woodland remains static. The unit price is also assumed to be constant. The increase in the woodland habitat due to the investment at the City Park and River Project sites would increase the annual value of the timber production service, and, therefore, the overall value of the natural capital asset (Table 29).

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Table 29: Annual monetary flows of timber / wood fuel production the City Park and River Project baseline and investment scenarios (£ 2017). Timber production Baseline Investment Change (£ / year) City Park 1,512 2,266 + 754 River Project 609 779 + 170

5.6 Recreation To calculate the monetary flow of this service we used three levels (low, central and high) of per person per trip values from Sen et al. (2014), which is itself a meta-analysis of about 300 values taken from c. 100 relevant studies. In Sen et al. (2014) these values were related to visits to specific habitats. Data were not available to link visits to specific habitats at the City Park or River Project sites. The central value is, therefore, an average taken across the different habitat types. Note that the value of recreation is a measure of welfare gain associated with local informal visits to greenspaces. It does not include non-local tourist visits, or expenditure whilst visiting, which is included in the tourism estimate (Section 5.9). It also does not include impact on health expenditure, which is included in the next section. The City Park and River Project investments are specifically targeted at creating quality greenspaces, and increasing access to them. The increase in the number of visits to these sites as a result of the investment is likely to increase the value of this service and the natural capital assets considerably (Table 30). The annual monetary flow for the City Park is 2.4 times higher under the investment scenario, and just over 5 times higher for the River Project.

Table 30: Annual monetary flows for recreation in the City Park and River Project baseline and investment scenarios (£ 2017). Recreation Baseline Investment Change (£ / year) City Park 1,633,027 3,945,657 + 2,312,630 River Project 580,632 2,975,738 + 2,395,106

5.7 Physical health Monetising the benefits from physical health remains a challenge. Understanding the links between physical inactivity and its costs is a developing area, but reliable values remain limited. The active visitors (estimated in Section 4.18) were all given the maximum QALY score of 5 (as they had completed 150 minutes of exercise weekly), which equates to an annual QALY gain per year of 0.053385 (Beale et al. 2007, White et al. 2016). We used an estimate of £20,000 per QALY (as in White et al. 2016), to capture the monetary flow of physical health. This implies that up to £20,000 in health care costs can be saved if health is enhanced by one QALY. When accounting for the extra visitors that meet physical activity guidelines due to the investment in the City Park and the River Project we estimate the monetary flow would increase by about £16,000 and £278,000 respectively. These are not more significant gains, due to the issues around estimating the physical flows of this service. However, the baseline monetary flow for Stirling is high (see Annex 1), and demonstrates the importance of this service. This is a conservative estimate and the value of this service is

Natural Capital Solutions Ltd 75 Alive with Nature: The benefits of investing in the natural environment in Stirling likely to be higher, especially if indirect costs of physical inactivity, such as losses to the economy of absences from work due to ill health, can be captured in the future. Arriving at this indicative figure has involved making some broad assumptions and should therefore be used with caution. As mentioned above, gaps in evidence mean that valuing this benefit remains a challenge. Limitations inherent in this estimation are that it is based on data where it has been assumed that the respondents were reporting the type, duration and frequency of their activities accurately. Where physical activity in nature is converted to QALY there are uncertainties in how to model benefits of exercise over time, or how to take into account injuries. However, as mentioned above, the value of the QALY used is reasonably conservative. A previous study (Natural England 2009) used a QALY value of £30,000 to value the health benefits from the ‘Walking for Health Initiative’.

5.8 Property values Drawing on evidence from research literature (see Section 4.19 above), we use the principle of hedonic pricing and evidence of increases in property values and rent as a means of reflecting the benefits of an enhanced environment for the occupants of residential and commercial properties. We are aware of the potential for double counting here: it is incorrect for example to value increases in property value if the benefit streams responsible for this increase have already been accounted for. It was our view here that because our assessment of local area environment benefits for local occupants was (i) incomplete and (ii) based on high level estimates of benefits transfer from other cases, a strong case could be made for including otherwise unquantified benefits (of the kind listed in Table 2 above) to residences and commercial properties associated with the environmental enhancement delivered by the City Deal Green Infrastructure Projects. In our view this would reflect, for example, the unmeasured benefits associated with visual aspect and amenity, relative tranquility, and general improvement in location- specific occupier conditions that, from evidence in the literature, find expression in property prices (beyond the ones we have identified). We also noted that the commitment to greenspace in the City Deal contains a form of assurance against alternative types of development, thereby securing the environmental benefits into the future: a designation premium. Furthermore, with respect to participatory recreation and health benefits, we note that there is an additional benefit to residents associated with proximity of access: a doorstep premium. The same general arguments can be applied to commercial lets that enjoy an improved working environment as a result of the project. In this context we adopted a tightly constrained estimate of hedonic price benefits for properties, in terms of the radial bands (as this affects number of properties) from core greenspaces and the % lift in property values. The numbers of residential and commercial properties within incremental radial bands of the City Park and River Project areas were estimated in Section 4.19. Based on aforementioned evidence (see Section 4.19), a simple relationship between distance (m) and % property value enhancement was assumed. For the City Park project, these banded estimates were 7%, 5%, and 2.5% respectively and for the River Project, these estimates were 5%, 2.5% and 0.5%. Different rates reflected difference in property characteristics, and in the case of the City Park, an element of benefit to property values associated with Park designation and the removal of potential future development pressure. Estimates of average residential property values for the City Park (£242k) and River Project (£161k) were obtained from Scottish Government House Sales in Stirlingshire for the respective areas. Annual rental charges for commercial properties ranging between £31/m2 and £41/m2 were obtained from commercial letting agency websites for the two areas, together with estimates of average sizes of commercial lets. Property rental values were assumed to increase by 3% for the 0-100m band, 1.5% for

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101-250 m and 0.5% for 251-500 m. We do not include tourist related increases in property values here as these are included in the tourism added value streams. Thus estimated increases in residential property capital values (City Park: £7.96 M, River Project: £16.45 M) and in commercial property annual rents (Park: £510k/yr and River £280k/yr) were estimated using the aforementioned distance: value relationships (Table 31).

Table 31: Estimated increases in residential and commercial property values in Stirling attributed to the City Park and River Project investments. Distance from Residential Commercial new green Number of Extra % Extra £M Number of Extra % Extra £M infrastructure properties capital capital sum properties rental value annual (m) value rental value City Park 0-100 54 7.0 0.91 55 3.0 0.31 101-250 171 5.0 2.07 50 1.5 0.14 251-500 823 2.5 4.98 68 0.5 0.06 TOTAL 7.96 0.51 River Project 0-100 1102 5.0 8.89 268 3.0 0.15 101-250 1519 2.5 6.12 324 1.5 0.09 251-500 1791 0.5 1.44 535 0.5 0.05 TOTAL 16.45 0.28

A further downward adjustment was made to allow for existing greenspace effects by applying a 25% reduction factor to enhanced property values. This gives a central estimate of £18.3 M for residential capital value and £592k/year for commercial rental value for the two projects. High and low estimates assumed 67% and 133% of the central estimate. Caution is required in the use of these estimates due to the possibility of double counting, whereby elements of recreational and health benefits already accounted for elsewhere in this assessment may be drivers of change in residential property values. Elements attributed to tourist GVA benefits could account for rising commercial property rents in tourist dependent sectors, and for this reason we have not included allowance for this here. Furthermore, increased market values of residential property could reduce the affordability of housing for the less well off, reducing potential social benefits.

5.9 Tourism The City Deal Business Case identified tourism as a major source of benefit linked to the City Park and River Project investments. Tourism here is taken to include travel, accommodation and spend to undertake recreation and leisure by non-residents visiting an area. The City Park and River Projects enhance attractiveness of Stirling’s natural and historical offerings, facilitating a range of land and water based activities, events and services throughout the year. The Case identified a central estimate for additional spend within the City of £20million/year for the combined City Park and River projects based on a combination of the number and average expenditure of extended stays by existing visitors and newly generated visits for national and international tourists.

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It is noted, however, that there is some uncertainty in the initial estimates for tourism contained in the Case documentation. These were given as £12 million and £20 million per year additional spend for the City Park and River Projects respectively, but there appears to be some double counting between the two projects. Based on the underlying estimates of visitor numbers and spend, an estimate of £19.7 million additional expenditure (in 2017 prices) was used here for the combined projects (Table 32).

Table 32: Estimated new and extended tourism visits per year associated with the City Park and River Project investments. Tourism Million visits New visits % Extended % Extra spend /year av. million/year increase day visits increase £ Million 2015/161 at full million /year 3 development2 /year2

Day visits 2.11 0.40 19% 14.9 Overnight stays 0.34 0.10 30% 4.8 Total Visitors 2.44 0.50 20% 0.5 20% 19.7 Notes: 1Invest in Stirling: http://www.investinstirling.com 2Masterplan: combined City Park and River Projects 3Masterpan: based on unit expenditure by visit type, including tax

The main tourist attractions for the City Park are linked to seasonal events and festivals in the vicinity of the Castle area. For the River Project they are associated with water based recreational and sporting activities, and the historical significance of the Stirling Bridge conservation area. It is assumed that total additional tourist benefits are apportioned 40% and 60% to the City Park and River Projects respectively. The estimate of additional tourism spend was adjusted for Value Added Tax (VAT) at 20% and multiplied by 0.56 to estimate the GVA in the economy for every £ spent by tourists (see Section 6). The resulting estimate was then increased by 1.5 to reflect the multiplier effect of further 0.5 GVA injection into the local economy (see Section 6). Thus a central estimate of £19.7 M/year expenditure becomes £13.7 M/year after adjustments (£19.7 M x (1/1+0.2) x 0.56 x 1.5), apportioned between the two projects. High and Low estimates were taken at +/- 30% of the central estimate. Given the focus on the benefits of green infrastructure to the Stirling City economy, the valuation method used assesses benefits from tourism rather than benefits to tourists. This justifies the use of an expenditure based method for valuation rather than one based on increased welfare (ie increased consumer surplus) to tourists. This is especially relevant because many tourists come from afar, including overseas countries. Our focus here, therefore, is on the extra net economic gains to the local economy arising from tourism and attributable to the extra green investments. Furthermore, the generation of benefits from tourism lies at the heart of the Stirling City Deal Case. In our view, the estimated benefits from tourism are direct benefits that would not occur in the absence of the investments. This also justifies the use of tourist expenditure: GVA based estimates and multipliers that reflect wider effects through the local economy. The benefits from tourism are of course predicated on investments in supporting sectors such as retailing and accommodation. These costs and margins are, however, incorporated within GVA estimates.

Natural Capital Solutions Ltd 78 Alive with Nature: The benefits of investing in the natural environment in Stirling 5.10 Overall results A summary of the annual monetary flow account for the two proposed investments is provided in Table 33. This excludes property values, as these were not annualised amounts. The account shows that the City Park and River projects result in a positive monetary flow across all the services that can be monetised. Even changes to agricultural production, which show the greatest decline in physical flows, result in a positive monetary flow due to the reliance of the agricultural sector on income subsidies. The monetary flow account also highlights the large range in value of different natural capital benefits. The value of recreation is by far the largest benefit when placed in monetary terms, and is several orders of magnitude greater than most of the other benefits. The value of physical health is also high for the River Project and, due to the reasons given in Sections 4.18 and 5.7, this is likely to be a significant underestimate. The impact on property values is also likely to be significant.

Table 33: Monetary flow account for the City Park and River Projects under the baseline and proposed investments and predicted changes.

Natural Capital benefit City Park (£ 2017) River Project (£ 2017) Baseline Investment Change Baseline Investment Change Carbon sequestration 10,771 14,795 4,024 3,467 4,371 904 Agricultural emissions - 14,276 - 7,456 6,820 - 13,014 - 8,691 4,323 Air quality regulation - PM10 80,800 91,546 10,746 36,086 41,810 5,724 - SO2 24.5 25.8 1.3 12.4 14.1 1.7 Agricultural production - 8,562 - 4,595 3,967 - 8,341 - 5,217 3,124 Timber / wood fuel 1,512 2,266 754 609 779 170 Recreation 1,633,027 3,945,657 2,312,630 580,632 2,975,738 2,395,106 Physical health NA NA 16,129 NA NA 278,318

Natural Capital Solutions Ltd 79 Alive with Nature: The benefits of investing in the natural environment in Stirling 6. Economic appraisal of the planned investments

6.1 Objectives The objectives of the economic valuation and appraisal are to (i) estimate the extra benefits and costs associated with investments in green/blue infrastructure associated with the City Park and River Projects within the Stirling City Deal Programme, (ii) quantify the expected economic Rates of Return for green /blue investments over 50 year and 30 year planning periods, including the sensitivity to key assumptions (iii) review these expected benefits and costs against the wider development objectives of the City Deal Programme

6.2 Method The approach to economic appraisal of the City Park and River Projects involved a number of steps: 1. The proposals and qualitative assessment of the two projects contained in the Draft Business Case for the Stirling City Deal were reviewed to identify the type, magnitude and likely significance of benefit and cost components. This was followed up by discussions with Stirling City officers. 2. The approach involved the assessment of the physical flows of selected ecosystem and related services and their valuation in monetary terms (Sections 4 & 5). This was done for the existing ‘without project’ baseline situation and for the future’ with project’ situation, in order to assess the changes attributable to project investments over a 50 year time horizon. 3. Estimates of additional capital and operation and maintenance costs were obtained from the City Deal documentation and expressed in 2017 prices using ONS GDP deflators. The assessment assumed constant 2017 prices throughout. 4. Estimates of extra benefits and costs, phased in accordance with project implementation during the first 10 years of project life (after which they are assumed constant), were compiled in constant 2017 prices to generate project cash flows over a 50 year period for the City Park and River Projects. Following HM Treasury Guidance, cash flows were discounted at the test discount rates to give estimates of Net Present Value (NPV) and Benefit:Cost ratios. Estimates of Internal Rates of Return were also derived. Except for initial up front (year zero capital spend), discounting assumes mid-year cash flows. 5. A sensitivity analysis identified the ‘switch’ values for key assumptions that would make the projects break even (NPV=0) at the test discount rate. In other words, this identifies how much each value would need to change before the investment decision is reversed. 6. A natural capital account was compiled to show the present values of assets and liabilities associated with the baseline and project development situations over a 50 year planning period. The net capital contribution of the project investments are thus shown in a balance sheet format. 7. It is noted that the analysis covers selected ecosystem services for which information is available. It does not claim to be a complete assessment of all possible benefits and costs, but the insights gained can be used to guide decisions. Attention is also drawn to cautions regarding potential optimism and attribution bias.

Natural Capital Solutions Ltd 80 Alive with Nature: The benefits of investing in the natural environment in Stirling 6.3 Gross value added (GVA) multipliers Estimates of Gross Value Added, the amount by which a given injection of income or expenditure can lead to an overall increase in economic activity and benefit in the wider economy, were estimated for the greenspace investments. Estimates of the ratio of business income generated to Gross Value Added were derived by sector from the Scottish Annual Survey of Business, 2008-2015. It was assumed that for the purpose here, business incomes equal expenditures by purchasers, net of tax, thus deriving an estimate of GVA/£ spent. This GVA was multiplied by ‘multipliers’ to determine the knock on effect of expenditure through the economy, based on Scottish Government input:output multipliers by sector for Stirlingshire (1998-2014). Drawing on Guidance provided by the Scottish Government (Scottish Enterprise, 2008), further adjustment was made for ‘additionality’ effects at the local and Scottish economy scale, namely for leakage of benefits outside the area, displacement of benefits elsewhere and substitution of existing or expected benefits (Table 34). The net effect at the local scale is that adjusted GVA increase factors range between 0.33 and 0.50 of initial spend (Table 34). For example, £1 spent on civil engineering infrastructure results in an estimated additional local economic gain of £0.33 (and £0.40 for Scotland’s economy). For tourism, the equivalent estimate is an additional £0.50 per £ spent locally, and £0.40 for the Scottish economy. These GVA increase factors were applied to the extra capital and operating costs of the projects, and also to tourism expenditure (net of tax).

Table 34: Estimates of GVA increase factors by sector for the local Stirling and the Scottish economy. Sectors Income: GVA: GVA Leakage 4 Displacement 5 Substitution 6 GVA increase GVA spend multiplier factor 7 Ratio1 ratio2 3 Local Scotland Local Scotland Local Scotland Local Scotland Ecological enhancement 2 0.50 1.60 0.25 0.05 0.00 0.20 0.20 0.20 0.48 0.49 Civils/infrastructure 2.4 0.42 2.00 0.5 0.25 0.00 0.20 0.20 0.20 0.33 0.40 Facilities 2.4 0.42 1.90 0.35 0.25 0.00 0.20 0.20 0.20 0.41 0.38 Other services 1.8 0.56 1.50 0.5 0.25 0.00 0.20 0.20 0.20 0.33 0.40 Tourism 1.8 0.56 1.50 0.25 0.15 0.15 0.25 0.05 0.25 0.50 0.40 Notes: 1 For Stirling by sector from Scottish Local Authority industry data for 2008-2015, Scottish Annual Business Statistics (SABS) 2 Income base ratio assumed equal to spend based ratio, net of taxes 3 output multipliers by sector: http://www.gov.scot/Topics/Statistics/Browse/Economy/Input-Output 4 leakage: proportion of benefits lost to the area, local or Scotland economy 5 displacement: proportion of benefits associated with displacing activities elsewhere 6 substitution: proportion of benefits associated with substituting for existing or proposed activities 7 Estimated GVA factor applied to estimate of initial increase in income or expenditure associated with development

6.4 Costs Capital expenditure Central estimates of capital costs for the City Park and River Projects were taken from the estimates given in the Stirling City Deal Case, updated to 2017 prices, and classified into ecological, facilities and infrastructure related categories (Tables 35 & 36). High and low estimates were assumed to be 0.9 and 1.33 times the central estimate respectively. Capital costs, including some pre-project committed costs, were phased over the project years 0 through to 5 in accordance with the schedules suggested in the Case documentation, assuming investments are committed at the beginning of a given project year. Allowance was made for replacement costs at 10% of initial capital cost in year 20 and also in year 30. No additional cost is assumed for project preparation. The GVA gain to the local economy associated with capital investments was assessed, applying the multipliers in Table 34 according to the type of capital elements. In essence, this serves to reduce the net economic cost of the capital investments.

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Table 35: Capital costs for City Park investments. Table 36: Capital costs for the River Project.

Capital cost elements £'000 % of Capital cost elements £'000 % of total* total* Ecological enhancement / Ecological enhancement / restoration restoration: Mini loch & attenuation ponds 4,068 community riverside enhancement 163 Community Orchard 645 riverside wildlife sanctuary 397 Arboretum Zones 2,082 biodiversity enhancement 239 Park Developments 8,357 landscaping 2,037 Contaminated land restoration 255 subtotal 2,836 6% subtotal 15,407 36% Facilities: Facilities sporting & recreation 1,049 Visitor Centre 6,713 performance and education area 876 Events Space 814 moorings and accommodation 9,725 Activity Zone 575 subtotal 11,650 23% City Farm 2,947 Infrastructure - historic/heritage: subtotal 11,048 26% historic Stirling Bridge 10,183 Infrastructure old harbour 1,731 Paths 1,203 Cambuskenneth Abbey 1,731 Roads Infrastructure 13,580 Infrastructure - transport and Parking areas (x3) 1,279 communications: subtotal 16,062 38% river crossings and paths 23,422 subtotal 37,067 72% Total 42,517 100% * Percentages rounded to the nearest whole number Total 51,553 100% * Percentages rounded to the nearest whole number

The estimated capital costs of establishing a City Farm as part of the City Park development were included in project costs. An indicative budget for the farm suggested that annual cash flows can be treated as revenue/cost neutral, and these have therefore been omitted. In the case of the River Project, because of uncertainty about the impact on river flows and ecology, the costs of river impoundment and hydropower installations have been omitted, together with any potential benefits. The costs of all other river infrastructure, including river bridges and crossings are included, the benefits to which are included under recreation and tourism. Sporting activities using these facilities are assumed revenue/cost neutral for the purposes here.

Operating expenditure Estimates of operations and maintenance costs (O&M) for existing green infrastructure were obtained from Stirling Council. For 2016/17 these total about £3.1 million annually, comprising Land Asset Management (including play areas and trees) £333k, Ranger Service £215k, Grass Service £841k, Grounds Core (excl cemeteries) £884k, Cemeteries £594k, and Fisheries £141k. The latter two components are funded through cost recovery. This informed estimates of additional annual Operations and Maintenance Costs attributable to the new developments, equivalent to about 5.5% of initial capital costs spent annually. This comprises annual capital maintenance at 2% of total initial capital costs. Additional annual operations costs are assumed at 3.5% of initial capital costs, equivalent to about £3.2 million/year at full development. This implies a doubling of current total greenspace annual expenditure to support the project activities, including the City

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Park and River Project environments. For the purpose of economic appraisal, allowance was made for the GVA gain to the local economy of incremental operating costs using the multipliers in Table 34 according to type of expenditure.

6.5 Return on Investment For the assumptions made, the economic appraisal of the City Park and River Project investments gives a central estimate of Net Present Values (NPV) at the test discount rate (DR) of £88 million (range £43 million to £173 million) and £130 million (range £46 million to £210 million) respectively over a 50 year life assuming zero remaining values (Table 37). Discounted Benefit:Cost ratios are 1.9 and 2.2 respectively. Central estimates for an assumed 30 year project life are £54 million and £85 million respectively. The City Park and River Projects generate an estimated economic Internal Rate of Return on investment equivalent to annual yields of 12.5% and 13.7% respectively over 50 years, and 11.8% and 12.9 % over 30 years. GVA from Tourism makes the largest contribution to total benefits (ranging between 53% and 59 % of total benefits for the City Park and River Project investments respectively) based on estimates of additional tourist spend identified in the City Deal Business Case. Ecosystem services (recreation, physical health, air quality regulation, carbon sequestration, and so on) account for about 19%- 23% of total benefits, followed by GVA gain to the local economy from project capital and operational works (about 16% -18%), and enhanced property values (about 5%-7%).

Table 37: Estimated benefits and costs: Stirling City Deal City Park and River Project proposed investments.

Benefits and costs City Park River Project £ 2017 prices Central Range2 Central Range estimate1 estimate £ million £ million £ million £ million Benefits Ecosystems services 41.0 31-52 46.8 35-58 Property enhancement 12.0 9-15 12.8 9-16 Tourism3 95.7 67-124 143.6 101-186 GVA gain from capex & opex 32.9 23-44 38.6 29-51 Total benefits 181.7 168-257 241.7 173-311

Costs Capital 44.1 40-59 53.2 45-71 O&M (at 5.5% of capital cost/year) 49.5 44-66 59.1 53-79 Total Costs 93.5 84-124 112.3 101-149

Net Present Value 50 years at test DR 88.1 43-173 129.5 46-210 Internal rate of Return (IRR)4 12.5% 6%-16% 13.7% 8%-20% B:C Ratio at Test discount rate (DR) 1.9 2.2 NPV at 3.5% DR for 30 years5 53.8 8-88 84.5 21-128 IRR% over 30 years 11.8% 5%-17% 12.9% 7%-18% Notes: 1 central estimate for 50 year project life, zero remaining values, discount rate (DR): yr 1-30 at 3.5%, yr 31-50 at 3% 2 based on expected range of low through to high values 3 estimated increase in total Tourism GVA is apportioned Park (40%) and River (60%) 4 range based on extremes of low benefits & high costs, and high benefits & low costs 5 assumed 30 year project life, zero remaining value, DR 3.5%

Details of the annual values and discounted and present values of incremental benefits and costs are given in Tables 38 and 39, including low, central and high estimates.

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Sensitivity Analysis For the purpose of sensitivity analysis, low, central and high estimates of benefits, costs, NPV and IRR were derived for the City Park (Table 38) and the River Project (Table 39). With respect to benefits, a 50% reduction in the estimated value of total benefits would make the projects breakeven. Project performance is particularly sensitive to assumptions about the value of tourism spend and GVA impact. The projects would each breakeven (NPV= 0 at the test discount rate) in the absence of tourism GVA benefits. The projects are moderately sensitive to the value of recreation and also of GVA benefits associated with capital and maintenance expenditures. For the assumptions made, NPV estimates are not sensitive to the value of provisioning and regulating ecosystem services.

Table 38: City Park investment: summary of incremental benefits and costs (50 years) City Park benefits and costs Annual flows at full PV £'000 at full development at Switch development £'000 test DR values* £ 2017 prices Low Central High Low Central High Central Benefits Ecosystem services Provisioning Agriculture 6.3 4.0 -7.3 127 81 -149 ns Timber 0.5 0.8 1.0 10 15 20 ns Regulating Atmospheric Carbon 5.6 11.0 16.6 113 224 337 ns

PM10 8.4 10.7 12.2 171 218 248 ns SO2 0.0 0.0 0.0 0 0 0 ns Cultural Recreation 1,735 2,313 2,891 30,152 40,202 50,253 -2.2 Physical health 12 16 20 210 280 350 ns Property Value Residential (capital sum) 2,987 4,458 5,928 -19.8 Commercial 255 381 506 6,086 7,564 9,041 -11.7 GVA additions Tourism 3,834 5,480 7,080 66,970 95,715 123,656 -0.9 Capex & Opex 561 779 1,037 23,712 32,934 43,802 -2.7 Total Incremental benefits 6,418 8,996 11,557 168,089 181,690 257,613 -0.5 Costs Capital 39,688 44,097 58,649 2.0 O&M 2,105 2,338 3,110 44,506 49,451 65,770 1.8 Total incremental costs 84,194 93,549 124,420 0.9 NPV at 3.5% 88,141 IRR% 12.3% * change in the value of the estimate to make NPV=0 at the test DR, e.g. multiplying the central estimate for GVA from tourism by -0.9 (ie a 90% reduction) makes the project breakeven at the test DR

NPV £ million estimates by low, central and high estimates for benefits and costs at 3.5% DR Benefits central low central low low high central high high Costs central high high central low high low central low NPV at test DR 88.1 43.7 57.3 74.5 83.9 133.2 97.5 164.1 173.4 IRR 12.3% 6.1% 9.4% 8.8% 9.9% 12.0% 13.5% 15.1% 16.4% B:C ratio 1.9 1.4 1.5 1.8 2.0 2.1 2.2 2.8 3.1

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Estimated NPV at the test discount rate is sensitive to estimated total cost. 100% and 120% increases in total costs from the central estimate would make the City Park and River Project investments breakeven respectively at the test discount rate. Considered separately, a two to threefold increase in either Capex or Opex would cause the projects to breakeven.

Table 39: River Project investment: summary of incremental benefits and costs (50 years) River Project benefits and costs Annual flows at full PV £'000 at full development at Switch development £'000 test DR values* £ 2017 prices Low Central High Low Central High Central Benefits Ecosystem services Provisioning Agriculture 4.4 3.1 -4.8 88 63 -98 ns Timber 0.1 0.2 0.2 2 3 4 ns Regulating Atmospheric Carbon 2.7 5.3 8.0 55 108 162 ns

PM10 4.5 5.7 6.5 91 116 132 ns SO2 0.0 0.0 0.0 0 0 0 ns Cultural Recreation 1,796 2,395 2,994 31,221 41,628 52,035 -3.1 Physical health 209 278 348 3,628 4,837 6,047 -26.8 Property Value Residential (capital sum) 6,174 9,214 12,255 -14.1 Commercial 142 212 281 3,512 3,591 3,670 -36.1 GVA additions Tourism 5,751 8,220 10,619 100,456 143,572 185,484 -0.9 Capex & Opex 680 945 1,257 27,800 38,611 51,353 -3.4 Total Incremental benefits 8,590 12,064 15,509 173,026 241,744 311,045 -0.5 Costs Capital 47,894 53,215 70,776 2.4 O&M 2552 2835 3771 53,156 59,062 78,553 2.2 Total incremental costs 101,050 112,278 149,329 1.2 NPV at 3.5% 129,467 IRR% 13.7% * change in the value of the estimate to make NPV=0 at the test DR, e.g. multiplying the central estimate for GVA from tourism by -0.9 (ie a 90% reduction) makes the project breakeven at the test DR

NPV £ million estimates by low, central and high estimates for benefits and costs at 3.5% DR Benefits central low central low low high central high high Costs central high high central low high low central low NPV at test DR 129.5 46.3 92.4 60.7 72.0 161.7 140.7 198.8 210.0 IRR 13.7% 7.2% 10.6% 10.1% 11.2% 13.3% 14.9% 16.6% 18.2% B:C ratio 2.2 1.2 1.6 1.5 1.7 2.1 2.4 2.8 3.1

Potential Optimism Bias on Tourism Benefits and Project O&M Costs The estimates of NPV and IRR could be subject to optimism bias particularly associated with (i) the attribution of Tourism GVA benefits to green infrastructure and (ii) the under estimation of recurrent Operation and Maintenance costs.

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Estimates of tourism GVA benefits are based on predictions of extra spend in the Stirling City Deal Business Case that are attributed to the City Park and River Project investments. Tourism benefits are predicated, however, on investments that would be required in other supporting sectors such as accommodation and heritage. While these latter costs are implicit in the Tourism GVA estimates, and green investments are considered to be a prerequisite for generating extra Tourism GVA, it may be optimistic to attribute all the tourism gain to the investment in the City Park and River Project investments alone. Reducing the portion attributed to Green infrastructure would reduce NPV and IRR estimates accordingly. A reduction in Tourism GVA by 50% of the central estimate, for example, would reduce IRR% to about 8.4 % and 9.3 % for the City Park and River Projects respectively. Optimism bias could also arise from assumptions regarding incremental Operation & Maintenance costs. Current spend on operations for green infrastructure in Stirling City and surrounds is about £3 million/year. It is not clear how much of this is attributable to the City areas that would be affected by the new green investments. Detailed estimates are not available of likely operating and maintenance costs to support the new initiatives. The maintenance of new physical assets is assumed at 2% of capital cost spent annually, which is probably reasonable (about £2 million/year for the two projects). ‘Incremental’ operating cost, over and above existing spend, is assumed at 3.5% of capital cost spent annually, at about £3.3 million/year for the two projects (approximately doubling existing reported costs for the City area). Together, these give an incremental annual O&M cost of about 5.5% of capital cost spent annually, equivalent to £5.3 million/year. These estimates of O&M costs and implications for project performance can be revisited once more detailed information is available. From a financing viewpoint, consideration can also be given to arrangements for recovery of O&M costs where appropriate and feasible. We noted earlier the possibility of some double counting of environmental benefits associated with property capital and rental values. We argue our estimates incorporate otherwise unquantified effects at the very local scale. Sensitivity analysis shows that projects feasibility is not sensitive to this estimate. Excluding enhanced property values would reduce NPV by about £12m and IRR by about 1% for each project case for the central estimate, well within the range of NPV and IRR% estimates shown.

6.6 Natural Capital Account Where feasible, estimates were obtained of the value of greenspace ecosystem services for the baseline, without project situation, and the investment with project situation. The two were compared to assess the change due to the projects, valued in terms of the present value of additional benefits and costs, discounted over 50 years. From this it is possible to construct an indicative ‘balance sheet’ to show how the value of natural capital, net of liabilities, compares for the two situations. The central estimate of the net capital value of greenspace assets considered here for the City Park area is estimated to increase from £73 million to £160 million in £2017 PV values due the project (Table 40), an increase of 220 %, excluding allowance for terminal values after 50 years. The River Project shows an indicative increase in net capital value from £74 million to £203 million, an increase of 275%. These estimates need cautious interpretation in accordance with the many assumptions and uncertainties involved in the estimation of baseline and change factors, not least the assumption that in the absence of project interventions, the future baseline situation would remain constant. It is noted that the assessment includes wider economic impacts associated with additional expenditure on green infrastructure and with increased economic activity in the environment supported tourism sector.

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Table 40: Indicative natural capital account for with and without City Park and River Project situations.

Natural Capital Balance City Park River Project Sheet Baseline Change Future with Baseline Change Future with £2017 PV without due to project without due to project project project £'000 project project £'000 £'000 £'000 £'000 £'000 Assets Ecosystem Services Provisioning (173) 96 (77) (190) 67 (123) Regulation 2,050 442 2,492 647 224 871 Cultural 40,242 40,483 80,725 17,650 46,465 64,115 Property 5,102 12,021 17,124 5,843 12,805 18,649 Tourism 49,268 95,715 144,983 73,902 143,572 217,474 Total 96,490 148,756 245,246 97,854 203,133 300,987

Liabilities Maintenance provisions 36,782 49,451 80,879 36,782 59,062 95,844 Capital provisions - 44,097 49,451 - 53,215 53,215 Less GVA contribution (12,874) (32,934) (45,808) (12,874) (38,611) (51,485) Total 23,908 60,615 84,523 23,908 73,666 97,575

Net Natural Capital Value 72,581 88,141 160,722 73,945 129,467 203,412 Based on PV of flows at the test discount rates over 50 years. Following standard accounting convention, figures in parentheses are negative.

Natural Capital Solutions Ltd 87 Alive with Nature: The benefits of investing in the natural environment in Stirling 7. Conclusions and recommendations

7.1 Key findings 1) If the right balance can be struck in key decisions, the Stirling City Region Deal represents a significant opportunity for Stirling to demonstrate leadership in implementing the Scottish Government’s commitment to increasing natural capital, improving health and well-being, and strengthening social inclusion. This kind of leadership could attract considerable attention internationally, which could in turn bring further benefits to Stirling.

2) In this analysis, the City Park and the River Project (as described in the published 2016 Masterplan, and excluding any impoundment options and renewable energy schemes) generate an estimated economic Internal Rate of Return (IRR) on investment equivalent to annual yields of 12.5% and 13.7% respectively over 50 years, and 11.8 % and 12.9% over 30 years. a) Some of the most deprived communities in Scotland are likely to gain some of the greatest benefits of the investments. b) There would be significant benefits in terms of recreation, health, mitigating the effects of air pollution, and reducing atmospheric carbon. c) Additional benefits of the green investments would include the value of timber production, water quality enhancements, reduction in surface water flooding risk, noise regulation, and local climate (urban heat) regulation. Maps show the change in the provision of these services and their spatial location before and after the investments. d) The investments would be likely to provide benefits for biodiversity through extensive habitat creation, creating some potentially high quality new habitats on land that is largely agricultural and of poor biodiversity value at present. Most of the new habitat would also be publicly accessible, allowing for enhanced public engagement with nature. However, the increased access may cause disturbance along the river and more could be done to enhance biodiversity further, particularly through the creation of more habitats of high biodiversity value. This should be the subject of a further assessment.

3) The river in Stirling is a significant natural capital asset which for a long period has been undervalued. The City Region Deal proposals include ambitious plans to put the river back at the heart of Stirling life and it will be therefore be important to protect this key natural asset. However, this analysis does not cover impoundment options, which are the subject of a separate options appraisal and Strategic Environmental Assessment.

4) The benefits of investing in natural capital are considerable and should be taken into account in decision-making. Incorporating the costs and benefits of natural capital into economic appraisal is now feasible and may secure higher returns on investment. Combined with evidence from a natural capital assessment, this will lead to a more inclusive evidence base that incorporates environmental, social and economic factors. 5) A summary version of this report, in the form of a Natural Capital Development Plan for Stirling, is available on the Scottish Forum on Natural Capital's website: naturalcapitalscotland.com

7.2 Social inclusion and placemaking Investing in green infrastructure is considered to be an essential part of placemaking and is a key aspect of Scotland’s planning policies (see Section 2). As has been demonstrated in this report, investments in green

Natural Capital Solutions Ltd 88 Alive with Nature: The benefits of investing in the natural environment in Stirling infrastructure can help reduce costs associated with health care, pollution removal, flood mitigation and energy consumption among others. Greener areas have been shown to be more desirable places to live, to have a better image and attract and retain more visitors, industries, businesses and workers. The aspects of the City Park and River Projects which have been taken into account in this analysis (with the caveat that the impoundment proposal requires separate consideration) would provide benefits for both local residents and visitors to Stirling, with many of these benefits expected to fall to those communities living close to the investment areas. The demand maps for air quality regulation, local climate regulation, and accessible nature (Section 4) have shown that there is high demand for these services in the nearby communities, most prominently Raploch, but also Riverside, Cornton and Causewayhead, and the River Project proposals in particular, fall into these areas of high demand. These communities therefore have the opportunity to gain significantly from this investment in natural capital (although see Section 7.4 for recommendations on how this can be enhanced further). Levels of social deprivation in Stirling are highly variable, with some wealthy neighbourhoods, but also neighbourhoods that contain some of the most deprived communities in Scotland, such as Raploch. Raploch is located between the proposed City Park and the river, meaning that it is likely to gain some of the greatest benefits from the investments. If the City Deal investments are funded, alongside programmes to encourage active use of the new greenspaces, there is a real opportunity to enhance health and well- being, sense of place and economic opportunities in this area. It is likely, therefore, that the investments would be beneficial in terms of social inclusion and equity.

7.3 Data gaps, assumptions and limitations The estimation of physical and monetary flows of ecosystem services from natural capital assets in the baseline and investment scenarios has indicated their direction of change, order of magnitude, and has allowed these to be compared across a broad suite of services. It was important to demonstrate the range of benefits that green infrastructure can provide in an urban context. However, these results need to be interpreted with care, and in the knowledge that whilst the highest quality and most readily available data were used, there are limitations and assumptions that need to be kept in mind. A range of assumptions have been made in assessing the physical and monetary flows of ecosystem services, the maintenance costs involved in maintaining the baseline situation, and the capital costs involved in investment projects. These assumptions have been outlined when describing the methodology in the physical and monetary flows sections and in the economic appraisal. For most ecosystem services these assumptions are minimal, as established production functions exist linking natural capital to ecosystem service production, and levels of production to monetary value. For some services, despite fast developing research in relevant areas, broad assumptions have to be made because these links are not clear. In addition, we were not able to easily provide estimates of some services for the City Park and the River Project investment scenarios, due to lack of data on which to base reasonable estimates of change. Where this occurred, we have ensured our estimates have been conservative. This is particularly the case for physical health, and this estimate should, therefore, be used with care. Throughout we have used low, central and high physical and monetary values, to illustrate the variability in estimates (as shown in Section 6). We have purposely included the potentially beneficial impacts on the wider Stirling economy of investments in green infrastructure and the direct benefits of associated increased tourism activity. Sensitivity and risk analyses have also been used in the economic appraisal of the investment projects

Natural Capital Solutions Ltd 89 Alive with Nature: The benefits of investing in the natural environment in Stirling 7.4 Recommendations for the Stirling City Deal proposals The current plans for the City Park and River Project areas (excluding any river impoundment options) are expected to deliver a net gain in natural capital benefits together with a good return on investment. These projects provide a good example of how investment in natural capital, alongside investments in built capital that open up access to these areas and provide facilities, can deliver positive economic, environmental and social outcomes. This is an example of sustainable development that has the potential to deliver multiple benefits to Stirling and the wider area and promote the city as both a primary tourist destination and one that follows an innovative approach to development. Although the investments are expected to deliver a net positive outcome for natural capital, there are a number of steps that could be taken to increase these benefits further:

• It is important to consider the specific location of elements such as trees in relation to demand. In particular, it would be highly beneficial to plant strips of woodland (or street trees) on both sides of the main roads that run through the City Park (the re-aligned A811, the A84 along the edge of Raploch, and potentially along the edge of the M9 motorway. This would have the potential to deliver a wide range of benefits including air pollution removal, enhancing water quality, reducing runoff, providing shelter and shade, enhancing aesthetics, and a whole range of health and well-being benefits. The economic value of these benefits can be considerable and are usually much greater than the costs of planting and maintenance. Care should be taken, however, to plant the right types of tree in the right location and it is important that only native species are planted. Note, however, that tree planting in these locations would need to be balanced against the desire to maintain views of Stirling Castle.

• All new paths, car parks and the visitor centre should be constructed using a full range of SuDS (Sustainable Drainage Systems) features (e.g. green roofs, rain gardens, permeable paving etc.) and the new access road from the M9 in the City Park should be buffered by SuDS features. These features would enhance the water quality and water retention features of both the City Park and River Project investments, which currently have room for improvement. • The biodiversity value of the City Deal investments have not been assessed separately here, but do contribute to many of the benefits assessments (see Section 3.5 for more details). However, it is clear that biodiversity value could be enhanced further and that this would also increase the value of some of the other natural capital benefits. Under the current plans for the City Park, there would be far more amenity grassland created than any other habitat type, which is usually of low biodiversity value. The most obvious way to enhance biodiversity would therefore be to create other habitats with a greater biodiversity value in place of some of this amenity grassland (e.g. more semi-natural grassland, an extended wetland around the mini loch, larger areas of woodland). These can be attractive habitats for people as well as for biodiversity, and there is evidence that this may enhance the psychological well- being of visitors, compared to amenity grassland. This should be the subject of a separate ecological impact assessment that considers the impact of the proposals on biodiversity, the designated sites, and on opportunities for further enhancement. • The monetary valuation of natural capital benefits (Section 5) has shown the importance of recreation and physical health. The potential benefits of increased physical activity could be further increased through programmes that actively encourage people to get out of their homes and exercise in the new areas created, and initiatives that tackle some of the social issues around inactivity. It is therefore recommended that such programmes and initiatives are put in place at the same time as the City Park and River Project investments become available to use. The monetary benefits of such initiatives can be very large in terms of savings to the NHS, reduced time off work, and enhanced quality of life.

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• This assessment has been one of the first in the UK to evaluate the impact of a major proposed investment on natural capital and to integrate this into an economic appraisal. As such it would be beneficial if monitoring was put in place to determine the accuracy of some of the results and to enable continued assessment as the project progresses. In particular, assumptions were made when estimating the number of visits and visitors to the new investments, and the value of the benefits that they would gain. Hence it would be beneficial if monitoring was put in place to count the number of visits that actually take place, along with surveys to assess where they come from, how often they use the sites, the number of active visits, the value that they place on their visit, and other aspects. This would provide data to Stirling Council to justify the costs of the project and could be used to test the accuracy of the models and improve them for the future. There is a real lack of evidence showing the actual costs and benefits of investments in green infrastructure, hence there is an opportunity to monitor that in Stirling to provide that evidence both to Stirling Council and to other cities and planning authorities. Stirling could become an exemplar case study for other cities. It would also be beneficial to re-run the models once the final versions of the proposals have been agreed. This could be used to determine if improvements had been made to the designs that further enhance the provision of natural capital benefits. Note that the models could also be used in an iterative way to assist with the process of deciding on the best designs.

• Stirling’s proposed investments in green infrastructure would help exploit the considerable potential for growth in tourism, with benefits for the wider local economy. The assessment shows that the City Park and River Projects would increase the space and capacity to extend the range of offerings that make the City an attractive and distinctive tourist destination, generating a large increase in economic activity. By integrating elements of both natural and cultural assets, the City Park and River Projects would further promote Stirling City’s sense of place and history, of benefit to residents and visitors. It will be important, however, to ensure that tourism development accords with the commitment to sustainability that is at the centre of Stirling’s green initiatives. • The river in Stirling is a significant natural capital asset which for a long period has been undervalued. The City Region Deal proposals include ambitious plans to put the river back at the heart of Stirling life, but it will be important to protect this key natural asset. • Some of the greatest benefits form the River Project come about as a result of the improved access, largely delivered by the footpaths, bridges and riverside loop wildlife sanctuary. However, there are other meanders on the river which could also be explored as locations for further habitat works and access improvements. In particular, the meander at the upstream (north-west) end of the project area could be improved as part of the nearby Kildean housing and employment development identified in the Local Development Plan (Stirling Council 2014). The other meander loops could also be considered, which could provide wildlife habitat and accessible greenspace for the nearby communities, as well as an enhanced attraction for visitors to Stirling.

7.5 Natural capital approaches in the planning and development process This project has demonstrated how a natural capital approach can be applied to the planning and development process and integrated into economic appraisal and decision-making in regard to a major planned investment. It has been useful at raising awareness and demonstrating the multiple benefits (economic, environmental and social) that can be achieved by investing in the natural environment. Bringing natural capital assessment into the planning and development process is an area being actively developed at present and best practice is yet to be determined. However, it is clear that the Scottish and

Natural Capital Solutions Ltd 91 Alive with Nature: The benefits of investing in the natural environment in Stirling

UK governments are moving to embrace these approaches and they will become standard practice over the next few years. Assessments can be carried out at a number of different stages of the planning process, including in options appraisal and overall project approval, at the outline masterplanning stage, or to support a full planning application. There are advantages and disadvantages to each, but in general it seems to be preferable to bring it into the process at a relatively early stage, so that the results can be used to guide decision-making and it can be used to enhance design. It can also be used in spatial planning, where an assessment of the current supply of, and demand for, ecosystem services across a wider area can provide valuable evidence to inform Local Development Plans, Green Infrastructure Delivery Plans and other spatial planning documents. Natural capital approaches do not, however negate the need for more traditional assessments and it is important to be clear about what they can and cannot deliver. They do not replace an ecological (or biodiversity) impact assessment or an assessment of the impact on designated features. Neither do they assess the impact of the built, transport, energy or lifecycle components of a development, which will require further analysis. But natural capital approaches do examine the green infrastructure and natural elements of a proposal or plan to determine the net impact of proposals on the natural environment and the benefits that it provides. This can reveal benefits and costs that are often overlooked, and when examined spatially, can show the distribution of the benefits in relation to demand, and can be used to suggest changes to enhance design. When stated in monetary terms, costs and benefits can then be used to feed into an economic appraisal (as here) thus providing a more complete and inclusive picture of return on investment to aid decision makers. It can also be used to engage with stakeholders, and to raise awareness of the importance and wider benefits of green infrastructure with developers, planners, decision makers and the general public.

7.6 Key principles of investing in natural capital

• The benefits of investing in natural capital are considerable and should be taken into account in decision-making. • Access to greenspace for people can be highly beneficial for physical and mental health and well- being. Benefits are numerous and include enhancing attention and cognitive function, improving mental health and well-being, improving pregnancy and birth outcomes, reducing mortality rates (especially related to cardiovascular and respiratory diseases), and encouraging physical activity. In addition, evidence suggests that in urban areas the presence of natural features can be used to deter crime and anti-social behaviour (Section 2 provides further details regarding all these benefits).

• The monetary value of these benefits can be extremely high and are generally much higher than all other benefits. Innovative public health initiatives that utilise green infrastructure (e.g. green and social prescribing, walking for health, reducing obesity, tackling air pollution through tree planting) can be promoted that have the potential for considerable cost-savings. Presently only some of the health and well-being benefits of green infrastructure can be given a monetary value, so the full value would be higher still.

• Green infrastructure can facilitate leverage of benefits from existing physical and cultural assets especially those associated with the historic and built environment. Green infrastructure can increase capacity for place-specific visitor-based tourist activities in support of the local economy and livelihoods.

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• Green infrastructure (GI) can also make important contributions to air quality regulation, climate change mitigation, natural flood risk management, water quality enhancements, local climate amelioration, and noise screening. GI is multi-functional, meaning that an investment focussing on one benefit (e.g. natural flood risk management), can deliver multiple additional benefits, hence offering excellent value for money. • The location and type of GI should be related to demand, which varies considerably across a city or region. Trees or woodland should be planted close to pollution sources, such as along main roads. Accessible greenspace should be created close to where people live. Mapping the spatial location and distribution of benefits (especially in relation to demand) provides valuable additional information. • Investing in green infrastructure can help to address issues of social inequality when located within or close to deprived communities. Capital works should be accompanied by programmes to encourage people from these communities to use the new assets created.

• All City Region Deals should consider and develop their natural capital assets and green infrastructure. This is fully supported by policy and is likely to lead to more sustainable outcomes. • Natural capital approaches, including quantifying, mapping, and valuing the supply and demand of benefits, can now be used to assess the baseline situation and the potential impact of proposals and plans, and natural capital accounting can be used to compare benefits to costs. Such approaches are being actively promoted by Scottish and UK policymakers and are likely to become a requirement of the planning and development process in due course. Natural capital (and environmental) net gain is being pursued as an objective for all new developments. • Natural capital costs and benefits can be given a monetary value that can then be fed into standard economic appraisals that calculate gross value added, return on investment and internal rates of return. Such assessments are more complete as they consider a wider range of costs and benefits than traditional economic analyses. It is hoped that this will lead to more joined up and sustainable decision-making.

7.7 Unlocking additional value from City Deal investments We hope that this report will be useful not only in Stirling but also in the context of other City Deals. Across the UK, City Deals and City Region Deals (agreements between central and local government designed to bring about long-term strategic approaches to improving regional economies) represent major opportunities to invest in natural capital. The following 10 steps summarise our recommendations to help increase return on investment: 1. Create a baseline by mapping the location of current natural capital assets such as wooded areas, greenspace and watercourses. 2. Quantify the benefits from these assets, such as recreational opportunities, air purification and flood protection. 3. Where possible, calculate a monetary value for these benefits, for example through increased tourism, reduced pollution and reduced costs of flooding. 4. Repeat steps 1–3 with any proposed land use change from investment to identify the potential impacts.

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5. Feed the monetary value of natural capital costs and benefits into standard economic appraisals to calculate gross value added, return on investment and internal rates of return. This will provide a fuller picture than traditional economic analysis and support more joined up decision-making, although other relevant factors will still need to be considered alongside the financial figures. 6. Consider ways to increase the benefits from natural capital by relating location and type of green infrastructure to demand, for example planting trees or woodland close to pollution sources, such as along main roads, and creating greenspace close to where people live. 7. Invest in green infrastructure within or close to deprived communities to help address issues of social inequality. Access to greenspace can be highly beneficial for physical and mental health and the economic value of these benefits can be particularly high. 8. Seek value for money through investment in multi-functional green infrastructure to help air quality regulation, climate change mitigation, natural flood risk management, water quality enhancements, local climate regulation, and noise screening. 9. Look for opportunities to create additional benefits from green infrastructure in connection with the historic and built environment. 10. Create important additional non-monetary value by adding natural features to support biodiversity.

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Natural Capital Solutions Ltd 98 Alive with Nature: The benefits of investing in the natural environment in Stirling Annexe 1: Natural Capital baseline assessment for Stirling City

The maps over the following pages show the flow of benefits derived from natural capital across the whole of the city and how the benefits are distributed spatially. These are the same maps shown in Section 4, but showing the results for the whole of Stirling and a buffer around the edge of the city boundary, for the baseline (pre-investment) condition. Please see Section 4 for a description of methods and further information on interpretation of the maps. A baseline natural capital account is shown below (Table A1). This shows the physical and monetary flow of benefits, for those benefits where it was possible to calculate a monetary value. In total this shows that natural capital assets are delivering £19.6M worth of benefits each year within the Stirling City boundary, and have a present value of £506M. This does not include the value of many additional benefits such as noise, water flow, water quality, or local climate regulation, hence is only a partial account and the true value of natural capital will be substantially higher. Please also see Annex 2 for a description and partial valuation of fishing and boating across the city.

Table A1: Annual physical flows, annual monetary flows and overall asset value of natural capital benefits for the City of Stirling under the 2017 baseline.

Natural capital benefit Physical flow Monetary flow

Annual amount Annual value Asset value (£ 2017) (£M 2017)

Carbon sequestration 3160 tonnes of CO2 202,227 11.28

Agricultural emissions 1642 tonnes CO2e -105,060 -5.86

Air quality regulation 18.22 tonnes PM10 1,404,578 38.85 0.168 tonnes SO2 341 0.0087 Agricultural production 902 ha -69,425 -1.77 Timber / wood fuel 2628 m3 45,956 1.17 Recreation 3,090,557 visits 12,764,000 325.75 Health and well-being 267.7 QALYs 5,350,000 136.63 TOTAL VALUE 19,593,000 506.05

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Natural Capital Solutions Ltd 109 Alive with Nature: The benefits of investing in the natural environment in Stirling Annex 2: Angling and boating in Stirling

The River Forth provides additional benefits that were not captured in the main assessment, two important examples of which are angling and boating. These were not included in the main assessment as it was not possible to determine the impact of the investments on their value, hence they did not fit with the structure of the assessment which focussed on the change in value following investment. Also, in the case of angling, the benefits are spread beyond the boundary of the River Project investments and it was not possible to distinguish between benefits derived inside and outwith the project boundary.

Angling Another important aspect of recreation supported by natural capital is angling. The River Forth fishery, owned by Stirling County Council, extends from the confluence of the Rivers Forth and Teith, where both banks can be fished, down to Riverside. From here the north bank only can be fished until Cambuskenneth. However, no fishing occurs in the city centre section of the River Forth (Stirling Council Fisheries Officer, pers. comm.). We have attempted to capture the physical and monetary flows of this service in two ways. The River Forth Fishery supports the fishing of salmon, sea trout and brown trout. The council sell permits to fish on the River Forth. In 2017, 104 permits (65 resident and 39 non-resident) were sold at a price of £200 each. This can be used to indicate one aspect of the expenditure of anglers and the value of the angling service. The price does vary with concession rates and for children, but it is best to assume the standard price for all due to the lack of data. The annual flow of income from permits is £20,800 (PV £530,845). An alternative approach to capturing more of the value of the angling service, is by calculating the daily expenditure of the anglers (which includes permit costs, but also other expenses such as accommodation) and multiplying this by the number of anglers and the number of days they have spent fishing on the River Forth. Local anglers of salmon and sea trout in Central Scotland spend an average of £60.84 (adjusted to 2017 prices) a day (Radford et al. 2004). This rate is higher for visitors to the fishery, £117.47 for Scottish visitors, and £136.27 for visitors outside Scotland (Radford et al. 2004). To capture the number of visits, we used an estimate of 61,646 angler days to the Central region of Scotland (Stirling, Falkirk and Clackmannanshire) during the fishing season (February – October) (Radford et al. 2004). There are only 4 main game rivers in this area (Forth, Teith, Allan and Loch Lomond). So assuming an even distribution across all of these this would give 15,412 angler days for the Forth. This is 148 fishing days per River Forth fishing license holder, which is relatively reasonable as there are approx. 237 fishing days available within the game fishing season. This means that an angler with a permit would be fishing just over half of the available time (3 days a week). This is reasonable for residents but obviously not for visitors. We have assumed that visitors would make one visit, or up to 12 on a 2 week fishing holiday. A quarter of visitors to the Forth are Scottish and the rest are non-Scottish, using the proportions of angler days that are made by Scottish and non-Scottish visitors in Radford et al. (2004). Based on these assumptions the annual monetary flow from the angling service in 2017 prices is £646,856 (PV £16.51M). The value of the angling service is significant and is a conservative estimate. Angler spend could include that of others in their party that, for example, may join them on the trip but spend their time in Stirling city centre. This can only be used to reflect the Stirling and River Project baselines. Increased access along the river is likely to impact on the angling service. However, this was difficult to estimate due to lack of data and due to the short timescale of the project.

Natural Capital Solutions Ltd 110 Alive with Nature: The benefits of investing in the natural environment in Stirling Boating The River Forth at Stirling is not navigable, so boating is not a major activity in this region. There is a canoe club that uses the river in Stirling, but this is a small group. It was not possible to extract membership fee information from this group. There are proposals for a water taxi service connecting key sites along the River Forth in Stirling (e.g. Stirling University to the Wallace Monument, Fort Valley College and Stirling Sports Village). This has the potential to be a very valuable service. However, there was no information on the plans for this service. We were unable to find economic analyses or business cases for water taxis on other Scottish or UK rivers from which to transfer the value of the benefits.

Reference Radford, A., Riddington, G. & Anderson, J. (2004) The economic impact of game and coarse angling in Scotland. Prepared for the Scottish Executive Environment and Rural Affairs Department. Crown Copyright.

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