Economic Assessment of Green Roof Construction in the city of Tehran (Case Study: District 9 of the Municipality): Cost-Benefit Analysis and Discrete Choice Experiment Method

The geographical location of Tehran, its position among the Alborz mountains and the large number of vehicles in circulation are among the factors that have endangered the comfort of residents and brought chaos to urban life. These issues have doubled the need for tranquility and access to nature. Due to the high value of land, the use of unused surfaces, including buildings’ roofs, is an appropriate way to expand green spaces. In this regard, the present study was conducted with the aim of investigating the economic and economic-environmental justification of the construction of a green roof in District 9 of Tehran Municipality. For this purpose, the Discrete Choice Experiment method is used for green roof evaluation. And also, three criteria of benefit to cost ratio (BCR), net present value (NPV), and internal rate of return (IRR) are used in order to accept or reject the investment plan in the framework of this analysis.
According to the results of calculating the willingness to pay, the highest amount that people are willing to pay is equal to 6.2 million rials per square meter and the lowest amount willing to pay equals to 4.69 million rials per square meter. It can also be said that people are willing to pay an average of 5.44 million rials per square meter for a green roof. Meanwhile, the highest willingness to pay with a figure equal to 6.2 million rials per square meter is related to the percentage of greenery more than 60% and the lowest willingness to pay is related to the percentage of greenery between 30% to 60%, which is equal to 4.69 million Rials per square meter. It is worth mentioning that due to the insignificance of the coefficients for the characteristics of the implementation method and the negation of the coefficients of the type of coating, these coefficients are not included in the analysis and as a result the willingness to pay is equal to the willingness of individuals to pay for green roof percentage. Finally, the results of economic evaluation indicators were calculated. These indicators are first calculated from an economic point of view, meaning that only the costs and economic benefits of a green roof are taken into account. Then, by introducing environmental benefits, the construction of a green roof has been examined from an economic-environmental point of view. From a purely economic point of view, the numbers related to financial indicators indicate that if we consider only the economic benefits and costs of building a green roof, this plan in this region is not justifiable. So that in the period under review, the net present value for this numerical region is less than zero and the internal rate of return is not defined for it. But these numbers improve with the introduction of environmental benefits. So that in the state of maximum willingness to pay, the net present value has reached 14.385 million rials. In this case, the internal rate of return reaches 61%. Taking into account the average willingness to pay the net present value reaches 11.349 million rials. In this case, the internal rate of return reaches 53%. Taking into account the minimum willingness to pay, the net present value reaches 8.353 million rials, in which case the internal rate of return will reach 46%.
The results showed that the construction of a green roof was unjustifiable only in terms of economic benefits and costs, so that the net present value was -10.385 million rials per square meter, which is less than zero, indicating unjustifiability, and therefore the internal rate of return is not defined for it. By adding environmental benefits and costs, taking into account the maximum willingness to pay, the net present value reaches 14.385 million rials. In this case, the internal rate of return is equal to 61%. Taking into account the average willingness to pay, the net present value reaches 11.349 million rials. In this case, the internal rate of return is 53%. Taking into account the minimum willingness to pay, the net present value reaches 8.353 million rials, in which case the internal rate of return will reach 46%. According to the theoretical foundations of the field of economic evaluation, the positive net present value, higher domestic rate of return than the current interest rate in the country (bank interest rate) and greater than one cost-benefit ratio, make a project economically justifiable, which Considering only two benefits (beauty, recreation, health and economic added value) among all the benefits of green roof, in District 9 of Tehran Municipality, this project is purely economically unjustifiable and is justified by the inclusion of environmental benefits. According to the results of collecting the questionnaire in the section of individual-economic attitude, the majority of people believe that in Tehran there is no culture of using green roofs collectively, so the need for culture in this area is felt and it is necessary to negotiate and consult with organizations such as The Environmental Protection Organization and the municipality should be trained and cultured in the field of using these common spaces. Also, the majority of people believe that using this technology is costly and its use requires the support of government organizations and the existence of incentives. Therefore, it is suggested that the district municipality take action through incentive policies in areas such as toll collection, completion of work, obtaining permits and density.