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Commercial Real Estate

What is the Economic Cost of Urban Heat in Dallas?

All signs point toward the importance of expanding tree coverage to not only reduce ambient air temperatures in Dallas but also improve the general well-being of our residents, says AECOM's Steven Duong.
trinity river dallas
Justin Terveen

When the inevitable heatwaves arrive in Dallas, community discussions around the need to mitigate our urban heat island effect and expand our tree canopy coverage arrive with it. For good reason too, whether it’s studies such as the EPA’s 2017 urban heat island study for Dallas, the city’s 2020 Comprehensive Environmental and Climate Action Plan or the 2021 Urban Forestry Plan, all signs point toward the importance of expanding tree coverage to not only reduce ambient air temperatures in Dallas but also improve the general well-being of our residents.

The discussion around urban heat generally revolves around public health. However, it also impacts other critical urbanism issues in Dallas such as walkability, bikeability, our ability to recreate and our attractiveness to new residents and businesses. Our team at AECOM worked with The Nature Conservancy in Phoenix to expand our conversation around the economic impacts of urban heat, allowing us to articulate some of its negative impacts in dollar values in addition to environmental or public health indicators.  

Steven Duong, principal of AECOM's Urbanism + Planning practice

While not exactly the same, there are enough similarities between the Phoenix metro and Dallas metro areas that many of our findings and lessons learned are translatable.  Our goal was to estimate the economic consequences to the Phoenix metro from failing to take action against extreme heat while evaluating the costs and benefits of solutions designed to address these issues such as implementation of cool roofs and expanding the urban tree canopy.  To do this, projected climate conditions were compared to baseline conditions in the Phoenix metro to estimate how the cost of inaction would impact the Dallas metro based on five indicators of human and economic well-being: mortality, morbidity, labor productivity, infrastructure and critical services with a focus on energy demand.  

After quantifying the cost of inaction for both metros, solutions selected for their importance and viability in the region were evaluated using benefit-cost analysis.

Our team found that in the Phoenix metro, key strategies such as expanding urban tree canopy coverage to 25% (Dallas is currently at 32%, according to Texas Trees Foundation), could have a cost-benefit ratio of 3.78, which is to say that for every dollar spent on expanding canopy coverage, the Phoenix metro would reap $3.78 worth of benefit. This is an enormous benefit that is likely similar in the Dallas region and underscores how dealing with an urban “heat island” here may not only make public health sense but also financial sense. The potential cost-benefit ratio of a strategy like “cool roofs” is even greater, with a ratio potential of over 5.0 in the Phoenix region, emphasizing the potential financial argument for incorporating more sustainable design into our buildings and roofs.  

Benefit-Cost Analysis Results for Solution Scenarios Analyzed

Solution ScenarioBenefitsCostsBenefit-Cost Ratio
100% Cool Roofs$7.9B$1.5B5.24
25% Urban Tree Canopy$15.3B$4B3.78
Note: Shown in $2021 over the period of analysis (2020-2019) with a 5% discount rate. Figures are rounded. Note that the benefits quantified in this analysis are limited to the five indicators included in the cost of inaction, and do not include other potential benefits that these solutions might offer–such as aesthetic benefits, air quality improvements, greenhouse gas emissions reductions, or reduced stormwater runoff.

There are many other tangential benefits of these solutions that are difficult to quantify financially, such as air quality improvement or increased non-single occupancy vehicle usage that would only serve to make the cost-benefit ratio even greater than what we’ve studied so far. It is very easy for us to wave our hands in Dallas and say that the solutions required to improve our communities are too expensive to implement and that the benefit may not outweigh the cost.  However, our findings indicate there is a legitimate economic case to be had with investing more significantly in mitigation of urban heat in addition to our policy and societal goals.

Steven Duong is a principal and oversees the Urbanism + Planning practice for AECOM in the western United States.

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