Urban heat regulating: what’s the value of nature-based cooling in cities?

With extreme heat becoming more common in the UK, nature-based urban cooling from green spaces and bodies of water can create economic value by protecting productivity and lowering expenditure on air conditioning. This is a measurable example of how natural capital supports economic activity.

Cities often experience higher temperatures than rural areas. This ‘urban heat island’ effect is an increasing risk, with the average number of hot days (28°C or above) in the UK in a ten-year window having doubled between 2005-14 and 2015-24 (Office for National Statistics, ONS, Natural Capital Accounts, 2025).

Green spaces –like parks, woodlands and grassland – and blue spaces – like rivers, lakes and reservoirs – in urban areas provide cooling on hot days. This cooling effect can reduce productivity losses and air-conditioning costs, contributing to the economy and society. This offers a measurable example of how natural capital supports economic activity.

The ONS Natural Capital Accounts include estimates of this cooling effect for Great Britain, England, Scotland, Wales and each local authority area across Great Britain, and the economic value that it provides. Our term for this is urban heat regulating.

What are the natural capital accounts?

Natural capital includes natural resources and processes that support human life, society and the economy. For example, woodlands provide benefits such as timber, health benefits from cleaner air, recreational spaces, shade on hot days and more. Our team at the ONS estimates such benefits in our natural capital accounts (NCA). We publish these annually for the UK as a whole and its four nations, alongside habitat-level publication a couple of times a year.

We measure 16 ‘ecosystem services’ – the contributions of natural assets to the economy and society in the UK. As outlined in the UN framework, we follow the system of environment-economic accounting: ecosystem accounting.

Urban heat regulating from green and blue spaces is one of these services, alongside others such as timber from woodlands (a provisioning service), air pollution removal by vegetation (a regulating service) and recreation health benefits (a cultural service).

Natural capital accounting enables us to understand the role of nature’s services in our economies, and track changes over time. This is necessary for assessing environmental sustainability, and offers a way to estimate the impact of policies on natural capital. As a Treasury-commissioned review of the economics of biodiversity by Partha Dasgupta in 2021 outlined, it is not an attempt to estimate the intrinsic ‘value’ of nature.

Aside from the natural capital accounts, the ONS also publishes a variety of environmental economic statistics including greenhouse gas emissions, environmental goods and services, and green jobs. These statistics are explored alongside wider trends in our recent environment, climate and nature insights article.

What is the effect of urban cooling from green and blue spaces?

Urban blue spaces contribute to local temperature regulation through evaporation, heat absorption and the movement of water. Each of these phenonema can transfer heat away from a given area, according to evidence from Eftec (2018). Water bodies can moderate nearby air temperatures because they generally warm and cool more slowly than built surfaces.

Urban green spaces also contribute to temperature regulation through:

Shading – by reducing incoming solar radiation reaching built surfaces.

Evapo-transpiration – with the release of water vapour through leaves into the air, which cools the surrounding environment as the water evaporates.

Reduced heat absorption – where vegetated surfaces absorb and store less heat than impervious surfaces, reducing surface temperatures and supporting thermal comfort.

The size and extent of this cooling effect are influenced by the type, size, quality and configuration of green and blue spaces. For example, larger urban parks and woodlands may provide stronger and more extensive cooling benefits than smaller, isolated sites.

These benefits are also not necessarily confined to the boundaries of the asset itself. Cooler air can extend into adjacent areas, particularly where green spaces are connected through corridors such as tree-lined streets, river corridors or networks of parks. Reviews of the evidence indicate that vegetation structure, canopy cover and water availability are all important determinants of the scale of the cooling effect (Aram et al, 2019; Lin and Li, 2025).

How to value the benefits of urban cooling?

In our natural capital accounts, we estimate the economic costs – from reduced productivity caused by heat or expenditure on air conditioning – that are avoided by cooling provided by nature.

We measure two components: avoided work productivity losses on hot days; and avoided air-conditioning cost.

In our 2025 publication of the natural capital accounts, the annual value of urban heat regulation was estimated to be £486 million in Great Britain in 2024. For the first time, we also expanded our coverage and granularity of these estimates to all local authority areas in Great Britain.

Across England, Scotland and Wales, the local authority areas with the highest annual value from urban heat regulation in 2024 were urban settings like Westminster (London), Glasgow and Cardiff.

These local authority areas have high annual values because of greater economic production (measured as gross value added, GVA) within them and a higher number of hot days relative to other local authority areas in each country. Nature provides more cost savings in areas with higher GVA, through the avoided productivity losses on hot days and air-conditioning costs.

Figure 1. Number of hot days 28 degrees Celsius and above by local authority, 2024

Source: Centre for Environmental Data Analysis; Met Office; Office for National Statistics

Typically, London gets larger benefits from urban heat regulating than other parts of Great Britain. This is for two reasons: the number of hot days tends to be higher in the south (see Figure 1); and because of London’s relatively high GVA compared with elsewhere. The top five areas in Great Britain that get the most value from urban heat regulating are in London: Westminster, Hillingdon, the City of London, Hounslow and Camden.

Figures 2 and 3 show five local authorities in England, Scotland and Wales that get the most annual value from urban heat regulating. At the other end of the spectrum, the lowest values are seen in West Devon in England, Na h-Eileanan Siar (the Western Isles), the Orkney Islands and the Shetland Islands in Scotland, and then the Isle of Anglesey in Wales.

Figure 2. Top five English local authorities by annual value from urban heat regulating, 2024

Figure 3. Top five Scottish and Welsh local authorities by annual value from urban heat regulating, 2024

Source: Office for National Statistics Natural Capital Accounts

How do we estimate the economic value of urban cooling?

Estimating the economic value of urban cooling requires using both geophysical data and economic data.

We estimate the cooling impact from nature by multiplying the proportional extent of relevant green and blue spaces features within urban areas by the associated cooling effect values reported by Eftec.

We then estimate avoided work productivity losses by comparing two scenarios:

With urban cooling, representing current conditions in which green and blue spaces provide a cooling effect.

Without urban cooling, representing a counterfactual scenario in which the cooling effect of green and blue spaces is absent.

For each scenario, we estimate productivity losses using functions developed in previous research to relate work productivity to high-temperature bands across different work intensity categories and industrial sectors.

We calculate the avoided productivity loss as the difference between productivity losses under the two scenarios: productivity loss without urban cooling ‘minus’ productivity loss with urban cooling.

This difference represents the work productivity loss avoided as a result of urban cooling by green and blue spaces. In our accounts, we convert this into monetary terms by multiplying the derived avoided loss value by the number of hot days and local authority area- and industry-level GVA at constant prices.

We also estimate that the cooling effect of urban vegetation reduces air-conditioning use, resulting in lower costs. The modelled estimates from the original Eftec paper are only available for Greater London and are used as the basis for estimating values for local authorities across Great Britain. These estimates are scaled using relative air-conditioned floor area and the extent of green and blue space in each local authority.

Users can explore these data, and see how their own area compares with others, including interactive maps and charts highlighting differences between local authority areas, in our 2025 bulletin. This publication is updated on an annual basis with our next publication scheduled in November 2026.

Further details on the model parameters and methodology can be found in the Eftec scoping report (2018) and the data sources used for evaluation in our quality and methods guide.

Conclusion

Urban green and blue spaces provide benefits that can help urban areas to adapt to rising temperatures. By cooling urban areas, they reduce some of the economic costs associated with high temperatures, including productivity losses and air-conditioning use costs. In 2024, this service was estimated to be worth £486 million across Great Britain, with England recording the highest country-level value.

The natural capital accounts help to make these benefits visible by bringing environmental data and economic data together using international guidance. While the estimates do not capture the full value of nature, they show the economic and social value of nature resources to the UK’s economy and people.