Measuring the monetary value of environmental externalities derived from urban underground facilities: Towards a better understanding of sustainable underground spaces

Highlights

• Environmental impacts of urban underground facilities were analyzed.

• A model for the monetary valuation of environmental externalities was developed.

• Applications of the model to typical underground projects were presented.

Abstract

The development of underground spaces has been regarded as a major contributor to urban environmental sustainability. However, insufficient attention has been paid to the environmental externalities of urban underground facilities (UUFs) due to the lack of a bespoke tool for the identification and monetary valuation of such externalities, resulting in the irrational use of underground spaces. To this end, this study systematically explores the categories of environmental externalities tailored to UUFs, considering both environmental contributions and losses. Furthermore, the framework of the replacement/restoration cost method (RCM) was employed to measure the environmental externalities of UUFs in monetary terms, and the framework was then applied to a series of representative UUFs in China as a case study. The results indicate that the monetary value of the environmental externalities derived from UUFs is non-negligible compared to its construction cost, and the positive externalities dramatically outweigh the negative ones. In addition, there are apparent differences in the constituents of externalities among different types of UUFs. It is found that the effects of energy conservation, air pollution and noise pollution prevention proved to be the main contributions of UUFs to sustainability. This study aims to provide a useful model for the identification and measurement of the environmental externalities derived from UUFs, thus aiding in the decision support of underground space planning, as well as obtaining a sound understanding of the role of underground spaces in sustainable development.

Introduction

Currently, cities around the world are suffering from severe environmental issues accompanied by considerable economic losses and serious social concerns. As such, energy-efficient and environmentally friendly development models are gaining popularity [1], [2], consistent with the United Nations (UN) Sustainable Development Goals (SDGs) [3]. It has been widely recognised that the reduction of energy consumption in the transportation and building sectors would definitely facilitate sustainable development [4]. [5] analysed the relationship between urban built form and energy performance in London, indicating that high-rise buildings with greater plan depths achieve higher energy efficiency. In this regard, urban underground facilities (UUFs) perform well because of the superior thermal properties of soils and rocks in shallow ground, which significantly reduces energy consumption of housing sector to sustain comfortable indoor temperature [6], [7]. Geothermal energy can be more efficient once combined with other energy sources such as solar system, and such energy systems are commonly used in residential buildings and public buildings [8], [9]. In a broad sense, UUF, defined as the artificial buildings and structures constructed beneath the city surface such as underground buildings and tunnels, is the basic component of urban underground space (UUS). In addition to the energy conservation, UUS development around the world also contribute to the mitigation of other urban environmental issues such as traffic congestion, air pollution and noise [10], [11].

Regarding environmental sustainability, the underground use of appropriate urban infrastructure can extensively influence the sustainability of those located above ground, as both environmental and economic conditions for sustainable urban development are improved [12]. The preservation of resources and assets preservation is also a critical issue for environmental sustainability. Space, geomaterials, groundwater, and geothermal energy were identified as four basic elements of underground spaces in relation to sustainability [13], and the development of UUF will inevitably exert positive and negative influences on these elements. The influence of UUF development that affects consumer utility outside the market mechanism could be defined as environmental externalities, which is an economic concept of uncompensated environmental effects of production and consumption [14].

Despite the significance of underground sustainability, the monetary valuation of the environmental externalities of UUF is still overlooked by policy developers and urban planners. For one thing, it is difficult to recognise and evaluate the externality of UUFs using a reasonable and unified technical framework. For another, the tremendous land saving benefits and construction expense of subspace development have jointly weakened the understanding of long-term environmental benefits derived from UUFs [15], [16]. Accompanied by sustainable development, urban planners begin to lay stress on the comprehensive externalities of UUFs, and such concepts have been incorporated into underground space planning techniques such as geographic-information-system-based resource assessment [17], [18] and environmental impact analysis [19]. UUFs have been confirmed to generate enormous indirect benefits, covering various fields such as environment protection, disaster prevention, air defence, and social management [20], [21]. Among the different benefits of UUFs, environmental externality is tightly linked to sustainable urban development and is underestimated or neglected in most cases. In this study, the environmental externalities refer to the impact of the development and construction of UUF on the physical environment necessary for the proper functioning of the city, while issues about spatial psychology and disaster prevention are not considered. In recent years, environmental awareness has been gradually raised in developing countries such as China, where stricter environmental protection policies and regulations have been undertaken to alleviate environmental issues during urban development [22]. As such, a reliable and practical monetary valuation model to appraise the environmental externalities of UUF is urgently needed to optimise and promote sustainable underground development.

By nature, UUFs function similarly to public/quasi-public welfare facilities, and their primary value is external rather than intrinsic. In other words, the utility function provided by UUFs is almost non-profitable when omitting rental and sales income, and such values are deemed as externalities [23]. With regard to environmental impacts, the externalities derived from UUF are more dominant, whereas the incomplete market and imperfect information make it difficult to measure such externalities [24]. Various classic monetary valuation methods, such as willingness to pay (WTP) method, hedonic pricing method, contingent valuation method, and shadow prices, have been successfully adopted to measure the externalities of public facilities [25], [26], [27], [28]. Regarding UUF development, only a handful of studies have made initial attempts to evaluate the overall externalities in monetary terms for underground storage facilities [29], underground complex [30], and rail transit [31]. These studies have indicated that the UUF development is supposed to make significant contributions to the energy-efficient and sustainable development [29]. Nevertheless, these studies have been limited due to the lack of a systematic and comprehensive investigation. First, previous studies are tailored to a specific UUF, and the comprehensive environmental impacts on various UUFs were not investigated. Second, the focus of these studies has been confined to the positive environmental benefits of UUFs such as low carbon effects [30] and air pollution reduction [31], whereas the potential negative impacts were neglected. Lastly, the relationship between the application of the evaluation model and underground space planning was rarely discussed, resulting in insufficient awareness of underground sustainability.

This study aims to fill this research gap and elucidate an effective and bespoke monetary valuation method. Based on the environmental impact analysis of conventional UUFs (including underground buildings, metros, underground roads, underground parking lots, and utility tunnels), this study developed a replacement/restoration cost method (RCM) to identify and measure the monetary value of the environmental externalities derived from UUFs. Applications of RCM to different categories of UUFs were presented and analysed to yield a more holistic understanding of sustainable underground spaces.

The remainder of this paper is organised as follows. Section 2 systematically summarises both environmental contributions (positive environmental impacts) and environmental losses (negative environmental impacts) triggered by UUF development. Section 3 illustrates the framework of RCM in detail. Section 4 discusses the case study of the model application to a series of typical UUFs in China. The implications on sustainable development, recommendations for underground space planning, limitations and prospects of the proposed model, are further discussed in Section 5. Conclusions are presented in Section 6.