Morgan Stanley
  • At Scale Podcast
  • Dec 7, 2021

Trees as Essential Infrastructure


Vivek Shandas: They're filtering the air, they're absorbing the rainwater, they're cooling the surrounding area. They're even providing a lot of aesthetics and they have been shown to reduce our blood pressure, help our mental health. They work on so many layers, sometimes not even in some ways, measurable.

Audrey Choi: Vivek Shandas studies climate adaptation at Portland State University. And he's talking about the incredible power of trees.

Vivek Shandas: I mean, we tend to think of pipes and roadways and the power lines, et cetera, as essential infrastructure, though, trees are a very quiet and highly, highly beneficial infrastructure in and around our neighborhoods.

Audrey Choi: But too often we see them as extras, luxuries, or worse, a nuisance. In the United States, we lose about 36 million urban trees annually. Globally, it's 10 million hectares of deforestation. That's about the size of Portugal each year. And it doesn't stop there. Clear cutting forest, largely for agricultural use, accounts for almost a quarter of global greenhouse gas emissions. And those are big losses, especially if you consider what trees do for us. One study showed that in the United States, urban trees save 1200 lives a year during heat waves, and they offer more than $18 billion in economic savings by reducing air pollution and energy use as well as sequestering carbon.

But there is growing recognition about the value of trees. I just returned from the recent COP26 meetings in Glasgow where world leaders came together and pledged billions of dollars to halt and reverse global deforestation. So what's it going to take for us to see the forest for trees? I'm Audrey Choi, Chief Sustainability Officer at Morgan Stanley and CEO of the Institute for Sustainable Investing. This season on At Scale, we're taking a close up look at things that may seem insignificant things we may take for granted, but if we invest in them, they could have a big impact on the way we live, the flow of capital and the future of our planet. Today, we start with a walk in a community that's determined to bring its trees back.

Gretchen Bradfo...: So while we are walking, the sun is hitting us. Normally when you are walking, if you're in a shaded area, you got a nice breezy walk, you got shade, no sunburn. But now because of the lack of trees, we have a lot of sun that hits us. And also some people have replanted, but they're very small trees because they're still trying to establish themselves from Hurricane Katrina 16 years later.

Audrey Choi: Gretchen Bradford is walking us around her neighborhood, Ponchartrain Park, a suburb of New Orleans, Louisiana. Gretchen's parents bought a house here in 1958. It was one of the first neighborhoods built specifically so middle class black Americans could become homeowners and trees were part of the design.

Gretchen Bradfo...: I have here lived in my entire life. And what I can remember when I was a child, we had trees planted in front of every home and they cascaded across the street, almost dancing together. It was just a nice, wonderful atmosphere. We always felt happy during that time.

Audrey Choi: Today, Gretchen is the president of Ponchartrain Park Neighborhood Association. Over the years, she's watched her community change.

Gretchen Bradfo...:         Hurricane Katrina is the one that wiped out our trees. If you see that third house, that third house to... Wait, well, that's the fourth. One, two , three, four. When we came home, they had the biggest tree laid in the middle of his house. The whole tree, the root was like this and it just slammed into his house.

Audrey Choi:In fact, New Orleans lost about 100,000 trees to hurricane Katrina and the storm put sections of Ponchartrain under 20 feet of water.

Gretchen Bradfo...:Over the years, this neighborhood never flooded. So Hurricane Katrina was an outlier. But we started getting more water in our streets and I think the trees had something to do with stopping that flow. And look around, can you see anybody with trees? Very few, right? And so we want to bring that back.

Audrey Choi: Gretchen is right. Trees can play important role in absorbing water and preventing flooding. So bringing them back is key for many reasons, but especially because the storms keep coming.

Gretchen Bradfo...: Just a few weeks ago, we had Hurricane Ida. So I'm walking through the neighborhood now just to kind of scan it to see. And one of the things I'm looking at that my heart hurts for is the amount of tree debris that I see. And at SOUL organization the reason why I'm so happy with partnering with them is because not only are they going to plant a tree in front each resident, but they're going to also water it for a whole year.

Audrey Choi: Soul stands for Sustaining Our Urban Landscape. It's a local nonprofit. Their goal, create a more resilient and environmentally equitable New Orleans through urban reforestation. They're working with city officials on a plan to increase tree canopy to cover 50% in New Orleans by 2030. Planting and maintaining 700 trees in Ponchartrain Park is part of that initiative.

Gretchen Bradfo...: So the responsibility is not going to lie with the resident. They're going to help that tree to take root and to survive the first year of planting. So that's what I really like about what they're doing.

Audrey Choi: Those differences make a big impact. There are a lot of seniors who can't plant or maintain their own trees. And that watering and care gives the young trees a better chance of survival. SOUL also offers a community a carefully thought out plan. A tree here and there doesn't do much. But by strategically planting 700 trees, Cypress, Oaks and Magnolias, and helping them grow to maturity over 30 years, they'll be able to absorb up to 616,000 gallons[11] of water per day. Imagine the amount of water in an Olympic size swimming pool. That's what we're talking about. In addition to improving storm resiliency, Gretchen sees trees as a solid investment in many other ways.

Gretchen Bradfo...: To me personally, I think it would bring the value of the homes up. If I'm looking at a house and a beautiful tree is in front of it, I could imagine me growing a family there. I could say, well, you know what? This is a really nice neighborhood. The quality of life will become better for people, which means I'm breathing better air, which means I won't be sick, which means I can go to work, I can contribute to the economy, I can make you money and myself money.

Audrey Choi: Gretchen's right. Mature trees can add an average of 10%[12] to your homes value. Plus when they're properly placed around your house, they can reduce your air conditioning needs by 30% and save 20 to 50% in heating costs[13]. Nationwide, trees add more than $31.5[14] billion to private home properties every year. And then there's the heat and health factor. Gretchen loves to walk for exercise, but can't in her own neighborhood because there's not much shade.

Gretchen Bradfo...: But on the other hand, if I go to a city park or Audubon Park, it's lined with Oak trees. Oak trees just everywhere. And I walk through the park and I don't necessarily feel any of the heat.

Audrey Choi: We feel the heat most in places without a lot of shade or green space, places with a lot of pavement and buildings. Those places are known as heat islands. Even within cities, there can be pockets where the temperature is significantly higher, up to 20 degrees higher[15]. New Orleans recently ranked as the American city with the most intense heat islands[16]. And when you have tropical storms that cut energy lines and critical air conditioning, a naturally shadier cooler neighborhood could be life saving. For Gretchen the benefits are clear and the neighborhood and SOUL have worked hard to communicate them to the community. So far they've raised $50,000 of the 175,000 needed to start planting this fall.

Gretchen Bradfo...: I like trees. But if the majority of the residents did not want this, then we would've never partnered with them. So I talk about a tree like it's a living being, so it has to work in collaboration with the human being. That way we can be in one happy place.

Audrey Choi: But how do we create more of that kind of collaboration? How do we scale what's happening in Ponchartrain Park? Vivek Shandas has been and asking these questions for years and he's studied and advised cities and communities around the world. It's work that was inspired by his first happy place.

Vivek Shandas: I grew up in south India. I was born about eight degrees above the equator where it's very lush. And one of the trees I really spent a lot of time with is a mango tree that was right next to our house. I used to climb that every day as a child, I remember, and just hang out in it for hours. Similar to a tree house, but without the infrastructure of boards and planks and things like that and rather just the branches that really held me pretty safely, I thought, throughout my first 10 years of life.

Audrey Choi: Wow, that's amazing. How did that kind of incredibly intimate experience that you had with trees growing up, lead you to the work you do today?

Vivek Shandas: In a nutshell, it really was that tree, but that tree represented something much broader in the landscape that I would call home. On my walk to school, for example, there would be cows, there'd be chickens, there'd be monkeys in the trees. There would be so many creatures in and around my very urban environment. And I kind of grew up thinking that cities are really a place where multiple species come together, both flora and fauna. And so when we moved to the US and this real hard divide between where the cows are allowed to be and where the people are allowed to be and where the chickens were and so on.

And it really got me thinking about how these homes, these driveways, these roads, this gray infrastructure really, in many ways, doesn't accommodate a lot of different things except really the cars and some people. And then the social justice part of it is when you look at these ecosystems, you start seeing that people who have trees next to their homes, like the mango tree next to mine growing up, or people who have parks that are near their homes, they have very different sociodemographic characteristics than those who live in another part of town where trees may not, or parks may not even. And it's the separation of those trees from people that, in my opinion, has really led to a number of the public health challenges that we're experiencing today.

Audrey Choi: Mm-hmm (affirmative). Well, we just had a conversation with Gretchen Bradford in Ponchartrain in New Orleans, which is this suburb created for the black community. And initially trees were planted as part of that community, but they were lost over the is because of lack of maintenance and storms. And so they're trying to replant. But you're nodding a lot. I mean, how common is that story that I've just summarized?

Vivek Shandas: It's remarkably common. Trees are often a secondary thought to a lot of municipal planning agencies, and they're also secondary and concerning thought to a lot of private residences, a lot of places, particularly like in New Orleans and many parts of the south and southeast, there's a great deal of development. They want to see more houses. And that is often to the detriment of trees because they're often seen as something that's, again, a luxury, something that not really an essential part of our urban landscape.

Audrey Choi: Getting cities to invest in trees isn't easy. One initiative from UK based Dark Matter Labs[17] is creating a platform to help cities see trees as more than decorative lamp posts.

Carlotta Conte: Historically, trees had been accounted as costs rather than assets that provide future benefits in the city council budgets combined with the fact that trees have roots that can affect our green infrastructure. They become costly as they grow in time, or they can affect the foundation of nearby houses. Still, we never accounted for all the positive and long lasting benefits that trees provide, such as carbon sequestration, cooling effect, quality improvement, and many other healthcare benefits.

Audrey Choi: Carlotta Conte is the mission keeper of Trees as Infrastructure or Trees AI for short. It's an open source financial platform that helps cities put a dollar value on all the benefits that trees offer.

Carlotta Conte: Trees AI really addresses and recognizing that green infrastructure nature-based solutions are not only carbon storage facilities and thus shouldn't be financed through the carbon market or public budgets alone, but instead through a wider ecosystem of beneficiaries, and this requires us to connect different parties interested in preserving and protecting the delivery of ecosystem services. To help achieve this the platform will offer robust and trustable data monitoring and impact calculation mechanisms. So organizations can track the environmental impact and return. So you start to see the massive potential of what this could achieve once you look at the scaling from a city's wide lens.

Audrey Choi: Earlier this year, Trees AI was selected by Morgan Stanley Sustainable Solution Collaborative. This is an initiative to work with breakthrough thinkers and innovators to truly scale their ideas, to create a more sustainable world. And according to Vivek, getting cities to see trees as critical infrastructure with real economic benefit, that could be a game changer.

Vivek Shandas: One of the most important things is we have so many policies in place that preclude trees from even being considered. Commercial developments or industrial developments, large swaths of cities that require no trees. There's no expectation for trees to be there.

Audrey Choi: They have parking requirements though.

Vivek Shandas: They have parking requirements, right? How many parking spaces do you have for each person you expect to come into your store? But there's really no tree requirements in that regard.

Audrey Choi: Well, it's so interesting, we regulate the setback and the density, but we don't actually put in trees, which could be one of the best things to meet some of those public policy goals around livability. And it reminds me, just last episode, we were talking about honey bees and what important effect honey bees have on crops and whatnot, and yet farm subsidies and other things to support agriculture have no, for the most part, no explicit requirements around the flowers and things that are needed to maintain healthy honey bees so that you can have healthy crops. So we're subsidizing other pieces, but not that piece.

Vivek Shandas: That's a great point. Right now we're subsidizing roads. The gasoline tax for example, goes right to the roads that we drive on and walk on. And so we've seen research that roads that have trees alongside them actually have a longer life than roads that are direct side light and exposure and wear and tear. And so there are these benefits that we have been able to quantify, and not only in the short term like with the roads, but also in the long terms of human health. If we really bring human health in there, we've seen, for example, an abundance of trees can really have a long term effect on health of a population. So for one modestly little city in the Pacific Northwest, Portland, Oregon, we've been able to estimate that the current tree canopy provides, for example, $25 million of healthcare benefits.

Audrey Choi: And that's just one city. The benefits are wide ranging. A recent German study found that living within 100 meters of a tree, any tree, was associated with lower use of anti dip presence. Finished researchers found that transforming gravel playgrounds into mini forests gave children stronger immune systems within a month. And we can't forget how trees help to keep us cool. In the United States, extreme heat kills more people than any other kind of natural disaster. And heat wave events like the one that rocked Portland and the Pacific Northwest this past summer are going to be more frequent and more intense. So in light of all this, shouldn't we be encouraging massive tree planting efforts like the ones we read about a lot these days?

Vivek Shandas: I love those big tree planting commitments at face value. Symbolically they represent something that is really usual from how a city's approached this. A mayor of LA, our city, will say we want 90,000 trees as part of the green new deal. And then the question becomes, how? And as having worked with LA and trying to get 90,000 trees into a concrete jungle of LA has been really sobering in many ways in part because those are very expensive proposals to put on the table and say, we're going to tear up a bunch of concrete on this perfectly fine road and put a bunch of trees in it.

The local community is upset. The planners and policy makers, many of them are upset. And so those challenges are real. And there's [00:17:30] something that we, I think, need to take into account when we're making these big claims about trillion or a million or 90,000 trees is that it has to get all the bureaus on board. We have to get the community engaged in this process. We have to grow the trees and get them big enough so when they are planted, they establish and can have a higher likelihood of success.

Audrey Choi: Absolutely. I mean, is there any sort of rule of thumb to understand what kind of commitment this requires?

Vivek Shandas: I mean, when we are thinking about putting one tree into the ground, we've been able to estimate that's somewhere between 1500 to $2,500. That's the labor, that's the digging up, that's the establishment and care for the first two years. You're talking about several hundred thousand trees and that adds up really fast just for the tree itself. And now the cost that we're not taking in account is, of course, the after two years of establishment, how do we care for that tree? And if we can weigh that with the overall public health benefits in the short, medium and long term, I think it would be a no brain. Even if it's tens of millions of dollars to go into establishing a set of trees.

Audrey Choi: But how long are we talking about to get those returns, especially when it takes some trees, 20, 30, 40 years to mature?

Vivek Shandas: The amazing thing about green infrastructure is that it's not a depreciating commodity or asset, it's actually appreciating over time. We can really start seeing benefits start accruing even within the first two years, even within the first year. And certainly within the first five, 10 and 20 years, if it's well cared for.

Audrey Choi: Tree planting in urban settings is one thing. What happens when you're trying to reforest in developing economies where you can't always plant your way out of a problem?

Paul Smith: There is a tendency to think, well, all we have to do is plant the trees and the rest will take care of itself. This is not the case.

Audrey Choi: Paul Smith is secretary general of Botanic Gardens Conservation International. And Paul says that with so many large scale tree planting efforts today, there is a rush to plant as many trees as possible, but it may be creating more problems than actually solving anything.

Paul Smith: Carbon is driving tree planting at the moment, because of course it's a carbon offset and there's a price on it. So if you plant your trees and they capture carbon, then you can get monetary benefits for that, or they offset your carbon emissions. The problem is that we don't just want carbon in the ground. There are other impacts of planting trees. If you get the wrong tree in the wrong place, those trees will not be there in four or five years time. It's much more complicated than that.

Audrey Choi: To help guide countries of the complications, Paul and his colleagues created a list of 10 golden reforestation rules. One of the big ones is actually not about planting trees at all. In the right settings, like farmland that used to be a forest, it's about getting out of the way.

Paul Smith: Using natural regeneration, wherever possible. And there's a good economic reason for that. Natural regeneration is where you don't actually need to plant trees. If you keep livestock off, for example, then the trees will come back themselves from the soil seed bank. Now, unfortunately that's not the case with all habitats, but in some habitats that is possible. And it's a lot cheaper than planting trees. You're going to get a lot more biodiversity. And in many cases, much more carbon in the ground if you allow that to happen.

Audrey Choi: Natural regeneration is one of the best practices Paul recently presented at COP26. And while he's seen deforestation pledges fail in the past, he's hoping that rules and the biodiversity standard for tree planting will lead truly sustainable global standards because currently he's seeing a lot of misguided efforts.

Paul Smith: One of the things that we've seen is people cutting down trees to plant more trees, which just doesn't make any sense from a carbon perspective or from a biodiversity perspective. If you cut down the trees, then you can perhaps sell the timber, and then if you plant trees, then you're going to get perhaps carbon credits for planting those trees. If you are the land owner, you're going to get double income.

Audrey Choi: It takes good carbon policy, choosing trees wisely and working with a local community to make tree planting projects really impactful on many levels. Paul points to the Brackenhurst conservation project in Limuru, Kenya as a great example. Herbert Ongubo is a training officer at Brackenhurst where they've transformed this 40 Hector former tea plantation into a biodiverse forest now home to several hundred species, including a huge variety of native trees.

Herbert Ongubo: We are dealing with a place where we've lost some species and a loss of habitat for the species due to farming, illegal lumbering and other things.

Audrey Choi: Herbert's devotion to trees began in his early childhood.

Herbert Ongubo: I grew up in Delmonte, the pineapple farm that supplies pineapples all over the world. We used to go to play in the forest and such. So I knew most trees and species when I was a kid, not by name, but by interacting with them. So when I grew up, when I had cleared college, I found my passion and work in conservation.

Audrey Choi: Herbert says in conservation, the key to growing more sustainable, more resilient nature based infrastructure isn't planting as many trees as possible, but planting the right tree in the right place.

Herbert Ongubo: Select the right trees and species that can maximize the biodiversity. That's what we did. Make sure the trees are resilient to adapt to the changing climate, definitely. So that's when choosing your seeds choose from the extreme boundary of this kind of weather and climatic condition.

Audrey Choi: But Herbert knows there have to be incentives to get full buy-in from the local community members and to discourage land owners from clearing the forest for timber or developing their land. And those incentives need to be mostly financial to get people to invest in trees. And so the Brackenhurst conservation project has a variety of spinoff businesses, mostly in ecotourism, which are generating income and livelihoods for community members.

Herbert Ongubo: There's no way we'll ever promote a conservation without the manufacturer, make it pay. That's the biggest bond in the room. So eco tourism comes in and it's the major source of income from the forest. We have local guides who guide people. They go for tree walks. I was even doing medicinal walks. People come for photography. People do filming in the forest and they love it so much. Other than that, with the forest also, there's a pharma culture project behind me in the farm that is catching up. So the existence of this forest makes the owner feel like if I cut this forest or I convert it into a real estate, I wouldn't get as much money as I'm getting from it being an indigenous forest.

Audrey Choi: For Herbert trees will always be an asset with continuous growth in returns that can be directly felt in terms of health, ecology, and long term sustainability.

Herbert Ongubo: Very few people have tried to evaluate the financial benefits of a stable ecosystem. It's way beyond money. You can have a forest and get money of out of it.

Audrey Choi: Trees offer us a nature based solution to many of our problems, urban heat islands, carbon capture, and flood prevention. Their shade and cooling abilities prevent heat related deaths, reduce our energy consumption and create more resilient and livable places for all of us. We can maximize all these superpowers if we see trees as essential infrastructure for everyone and if we invest in them. Next time on At Scale... concrete. It’s the most widely used man-made substance, literally the foundation of our cities, homes and infrastructure… and that’s a problem… because it has a huge carbon footprint. We’ll find out rethinking concrete can help us build a more sustainable future. I'm Audrey Choi, Chief Sustainability Officer and Morgan Stanley and CEO of the Institute for Sustainable Investing. Thanks for listening.

Whether they’re cooling our cities, swallowing carbon, or protecting our neighborhoods from natural disasters...trees are much more than decorative lamp posts. In this episode we hear the argument for why trees should be considered essential infrastructure and why not every tree planting campaign can deliver what it promises.

Vivek Shandas, who studies climate adaptation at Portland State University, sits down with Audrey to talk trees. He and Carlotta Conte of Dark Matter Labs explain why trees are valuable assets for any city. We’ll also get a first-hand account from Gretchen Bradford who is leading a re-planting effort in her New Orleans neighborhood and we’ll have Paul Smith and Herbert Ongubo of Botanic Gardens Conservation International weigh in on whether more is actually better when it comes to tree-planting efforts.


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