Introduction

According to Costanza et. al, 2017, “Ecosystem services’ (ES) are the ecological characteristics, functions, or processes that directly or indirectly contribute to human wellbeing: that is, the benefits that people derive from functioning ecosystems”. Moreover, the idea that natural ecosystems provide benefits that support human welfare is as old as humans themselves. Ecosystem services cannot be defined independently as they only exist if they contribute to human well-being as they benefit people consciously or unconsciously, directly or indirectly. The term ecosystem services first appeared in Ehrlich and Ehrlich in 1981 (Costanza et. al, 2017). Urban parks can be described as green spaces that provide a variety of ecosystem services that are beneficial to city dwellers’ well-being, and they are also seen as a natural solution to a variety of urban issues. It’s been difficult to put a precise monetary value on ecosystems and the benefits of their services in a world where, unfortunately, money indicates value. Part of the complexity stems from the fact that some people perceive ecosystems as priceless and essential parts of life.

This project helps in assigning a dollar value to urban parks in that it helps us to assess the benefits to individuals and the whole community that is otherwise not well perceived. Also, most people understand values expressed in monetary units and are often a common denominator to express the contributions made by various ecosystems. The monetary valuation of ecosystem services like urban parks is a promising approach for highlighting the importance of ES to society and the economy, as well as for developing cost-effective policy instruments for nature restoration and management and for use in cost-benefit analyses. However, it is a misconception that valuing ecosystem services in monetary units is the same as privatizing them or commodifying them to carry out trades. Privatization would work poorly for urban parks as they are public goods or common pools.

McArthur Park

McArthur Island Park, on the north bank of the Thompson River, is a popular park in Kamloops, British Columbia. It is in the Thompson Shuswap region of British Columbia. The Park is a recreation, relaxation, activity, and sightseeing hub catering to the young and old in the community. Many of Kamloops’ sports and recreation facilities are located on McArthur Island. The 51-hectare (126-acre) island boasts a variety of sports fields, a golf course, an indoor sports center, bicycle paths, parks and picnic areas, a lagoon, a wild flora and fauna reserve, a BMX track, walking trails, and much more (McArthur Island Park – Kamloops, 2022). The McArthur Island loop path is also a part of the larger Rivers Trail, which spans 40 kilometres. A trail that takes you through Kamloops’ neighborhoods’, lakes, rivers, wetlands, and more (McArthur Island Park – Kamloops, 2022). McArthur Island Park also serves as a venue for sporting events such as tournaments.

Methodology

Putting a value on urban open space is one approach to assessing the importance of green infrastructure in cities. Contingency valuation, choice experiments, hedonic pricing, travel cost, and benefits transfer have all been used to determine the value of annual ecosystem services provided by urban parks. This paper aims to use the holistic approach proposed by Sutton and Anderson (2016). Sutton and Anderson (2016) assumed that the park generates a return in the form of ecosystem services, much like any other type of capital (e.g., human, constructed, financial). A well-diversified financial asset portfolio has historically yielded a 5% return. The land value is an accurate reflection of the urban park’s value as it represents an ‘opportunity cost’ for the real estate in which MacArthur Park is situated. Secondary data collected from BC Assessment (2022) on the value of the land, the buildings, the year the house was built, and the size of land in square feet as utilized will aid us in putting the value to the park.

Results

Table 1 shows the descriptive statistics of 143 residential houses by McArthur Island Park. The data was accrued from BC Assessment (2020) and various variables like land value, building value, year built, size of household and land value per ha were scrutinized. The average land value is $248,350 for 143 residential houses surrounding the park. The highest land value was $690,000 and the lowest was $145,000, giving us the range of $545,000. The 3rd Quartile for land value is $273,000 which suggests that 75% of the land value lies below the $273,000 point. Moreover, the average land size of households is 8,528.83 ft2. The highest land size of a house was 59,667ft2 and the lowest was 2,160ft2.  Moreover, the island can be accessed through roads from the eastern and northeastern sides which explains the location of commercial buildings like Gymnasium and Elementary school on that side of the park. This also explains the high density of buildings on both sides of MacKenzie Avenue.

Table 1: Descriptive statistics of 143 residential houses by McArthur Park

McArthur went through a huge transformation during the 1960s and 1970s with the introduction of the Sports Plan in 1957, in which recreational playgrounds were to be built (Wallace, 2018). This explains the burgeoning of houses during that period. Out of 143 residential houses, 115 houses were built between 1960 and 1979 i.e., 80.41% of houses in our sample were built during that time- period. The oldest house dates to 1930 while the most recent one was built in 2020. Some of the older houses are found along Cambridge Cres, Barrie drive, Stewart Avenue and Kenora Road, which were built in the 1960s and 1970s. They are on the north and eastern flank of the island. Out of 143 houses, 7 were built in the 2000s. They are located along Happyvale Avenue and Holy St on the western flank of the park. The land value of these new houses varies from $4 to $5 million per hectare, which is high compared to other houses, but they have a small land size (between 3000-4000 ft2). The new houses have high building value and low land value which can be contributed to the building design.

The land values from BC Assessment were converted on a per hectare basis and averaged to get a unit price. This unit price was then multiplied by the 51 hectares of park size to determine the park’s estimated valuation which came out to 197 million. Moreover, Sutton and Anderson (2016) assumed a 5% return from the value of the park to represent the annual ecosystem services. The annual ecosystem services from McArthur Park are $9,850,000.

Conclusion

One of the goals of this research was to demonstrate the value people place on McArthur Park as a form of capital that is being preserved for the benefits it provides; the urban park has the characteristics of a public good in that it is nonrival, provided there is no congestion, and non-excludable. Furthermore, the estimated non-market values for these ecosystem services frequently relate to use or non-use values rather than exchange values. Knowing the value of ecosystem services is helpful in their effective management and carrying out the cost and benefit analysis that will help us to formulate better policies for the betterment of the park. Another goal is to provide information to local administrative units so that they can account for a cost-benefit analysis of the environmental losses caused by the removal of natural resources in the area. The annual ecosystem services from McArthur are priced at $9,850,000. Moreover, there is a limited scope of real estate development around McArthur Park as it is surrounded by water on three sides. However, the city has opened a new playground on McArthur Island (Wallace, 2021). It’s behind the mini-golf course and is part of the city’s long-term plan to turn the former McArthur Island Golf Course into a passive park (Wallace, 2021). This might see a huge influx of people into the park and might increase the benefits of the park to the community.

References

Costanza, R., De Groot, R., Braat, L., Kubiszewski, I., Fioramonti, L., Sutton, P, & Grasso, M. (2017). Twenty years of ecosystem services: how far have we come and how far do we still need to go?. Ecosystem services, 28, 1-16. https://doi.org/10.1016/j.ecoser.2017.09.008

BC Assessment – Independent, uniform and efficient property assessment. Bcassessment.ca. (2022). Retrieved 3 April 2022, from https://www.bcassessment.ca/.

McArthur Island Park – Kamloops. (2022). Eh Canada Travel. https://www.ehcanadatravel.com/british-columbia/thompson-shuswap/kamloops/parks-trails/3437-mcarthurislandpark.html

Sutton, P. C., & Anderson, S. J. (2016). Holistic valuation of urban ecosystem services in New York City’s Central Park. Ecosystem Services, 19, 87-91. https://doi.org/10.1016/j.ecoser.2016.04.003

Wallace, J. (2021, October 9). New playground opens on McArthur Island. Kamloops This Week. https://www.kamloopsthisweek.com/local-news/new-playground-opens-on-mcarthur-island-4500986

Wallace, J. (2018, November 30). From sewage lagoons to sports mecca. Kamloops This Week. https://www.kamloopsthisweek.com/local-news/from-sewage-lagoons-to-sports-mecca-4374695