Memorandum submitted by beacon dodsworth
EXECUTIVE SUMMARY
The UK generates a small percentage of the world's
CO2. The best role for the UK is to show the rest of
the world that pleasant environmentally friendly lifestyles are
possible. Economic mechanisms such as earmarked taxes are necessary
but it will be necessary to go beyond purely economic disciplines.
Large budgets for education and promotion are
necessary to gain public acceptance. So are large environmental
lifestyle projects such as model settlements. The finance can
be found within the planning system. It should be recognised that
the planning system creates very large amounts of wealth, which
can be traded on an international scale. It is possible that existing
development corporation legislation can be used to this effect.
1. Environmental leadership means drastic
changes in lifestyles
The UK generates a small percentage of the world's
CO2e, although, per capita, its citizens produce
much more than the world average. The useful role that the UK
can play is one of leadership to show the rest of the world that
pleasant yet sustainable lifestyles are possible. Sustainable
lifestyles might require a cut in the generation of CO2e
of a factor of three or more. Technological advances may help
but personal rationing of CO2e will be needed. If the
personal allowance is to be set at the level currently thought
to be necessary to achieve world sustainability significant changes
in lifestyle will be inevitable. The Fishergate Environmental
Panel is currently engaged in an assessment of a reasonable figure
for a daily ration of the individual production of CO2e.
The panel has accepted, for the time being, that 10 kg of CO2e
per day (3.65 tonnes CO2e per year) is a target that
fits with current thinking on climate change.
The panel is assessing the impact of everyday
goods and services against this daily ration, for example; champagne,
contained in a bottle weighing 1kg, represents a day's allowance.
A return car journey from York to London is approximately two
weeks' allowance. A return flight from London to Melbourne is
over three years' allowance (this figure takes account of the
fact that CO2 released in the upper atmosphere has
three times the effect as CO2 released at ground level).
Showing that pleasant lifestyles are possible
at such levels of CO2e ration is a challenge that will
require the deployment of skills that go beyond those that can
be provided by economists. It needs a new breed of planners who
can fit their work into an economic framework by postulating practical
models of lifestyles that are consistent with sustainability.
To this end, they will require the skills of environmental scientists,
sociologists, architects, transport planners, in short, the whole
gamut of specialisations that help to shape and control our society.
2. Earmarked taxes and campaigning needed
for public acceptance
Earmarked taxes, for well-meaning theoretical
reasons, have often been deprecated by economists. But, in important
cases, they have been used to gain public acceptance. The largest
example in the UK is National Insurance, which is widely recognised
as an earmarked tax. Another example is the National Lottery.
It raises funds for "good causes" and has widespread
acceptance. However, by certain cynics, it is called "The
Stupidity Tax". However, one typical lottery player, an intelligent
person, says: "The tax on the lottery is generally a good
thing, particularly when the money goes to good causes".
With an earmarked tax there is greater scope
for publicising the associated "good news" message.
For example, it is part of the National Lottery's pitch that it
raises money for good works. One of the main barriers to environmental
understanding is the size of advertising budgets promoting environmentally
unfriendly products and services such as cars, air-travel and
champagne. These budgets dwarf those for educational efforts by
governments or NGOs. If those administering earmarked environmental
taxes were able to explain the environmental benefits, using an
appropriate promotional budget, there may be some redress.
In general, public acceptance of "green"
taxation will be easier if the link between tax and expenditure
are conceptually linked or limited to a specific geographical
locality. The following are examples of possible earmarked taxes:
(a) Road tolls to subsidise local public
transport (i).
(b) A tax on supermarket car parks to give
a turnover subsidy to local and high street shops (ii).
(c) Air freight landing charge to finance
environmentally friendly development projects (overseas and in
the UK).
(d) Progressive taxation of electricity,
gas and oil consumption to subsidise building improvements (iii).
(e) Taxation of primary energy, based on
CO2e, to develop environmentally friendly energy sources(iv).
(g) A tax on wine bottles and a cut in the
tax on wine (v).
(e) A tax on new construction to subsidise
building conversion (vi).
NOTES
(i) In 2003, a study by York Council calculated
the impact of a £1 toll on three bridges in the centre of
York, and concluded that it could cut through traffic substantially.
The scheme would cost about £1 million to introduce, but
raise £7 million in revenue. Such revenues could transform
public transport in York.
(ii) The means of subsidy needs careful design
and testing. A subsidy on turnover is likely to be more effective
since it encourages the shops to boost their activity so that
more people walked to local shops or travelled on public transport
or bicycles to the high street.
(iii) In general, the affluent have a much larger
carbon footprint than the poor. With larger houses to heat and
more equipment to power, their use of energy within the home will
be greater. One way of cutting fuel use in a way that avoids "fuel
poverty" would to make an initial allocation of cheap fuel
but increase the price as consumption rises. A more straightforward
way would be to increase fuel prices and earmark the revenue as
individual fuel allowances but this would be harder for the public
to accept.
(iv) Such taxation, properly enforced by government,
could have greater public support than offset schemes which have
come in for deserved criticism. In addition, consumers may feel
that buying energy from "green" sources leaves cheaper
"dirty" energy to be sold to someone else with no net
environmental benefit.
(v) It is not widely known that, when "recycled",
most green and brown bottles are not melted down to form new bottles.
Many are used for hardcore under motorways. In any case, with
clear glass bottles that are melted down to form new glass, only
a fraction of the energy and CO2e is saved. The main
driver for recycling bottles is to reduce the weight of rubbish
going into landfill thus reducing landfill tax. Preventing an
inert substance like glass entering landfill is a tiny environmental
plus compared to the CO2e generated in bottle manufacture.
(vi) The construction of new buildings causes
considerable amounts of CO2e. Building a new house
creates many tens of tons. The "capital CO2e"
cost is often spread over the expected life of the building and
then compared to the CO2e generated during the use
of the building. This method is not correct. A discount rate should
be used to account for changes in building technology or positive
feedbacks in climate change. However, this topic is too large
for this note.
3. The built environment determines sustainability
and is a generator of wealth
The built environment determines much of our
sustainability. At home, workplace and holiday destination, we
create large amounts of CO2e. Our journeys between
these places create more. However, in the UK particularly, the
built environment is a generator of enormous wealth not properly
considered in traditional economics. Over little more than a decade
property values in the UK have risen by £2 trillion. The
most important factor in this rise has been the supply of planning
permission.
It is possible to separate two factors that
comprise the value of property. These factors are the value of
the structure and the value of the "continuing" planning
permission. "Continuing planning permission" means the
right to keep a particular structure in a particular place. For
most of the property in the UK, continued planning permission
over the land on which it is situated is more valuable than the
replacement costs of the bricks, mortar and labour by which it
is built (note 3a). It is the increase in value of this scarce
commodity, planning permission, which has put two GDPs of wealth
into the UK economy in little more than a decade.
It is the planning system in the UK that restricts
the supply of buildings and other developments. This makes existing
buildings as well as new developments more valuable. This wealth
has not been fairly shared; it lies at the disposal of property
owners. It is spent by people who inherit property, people who
downsize and by the multitudes that are able to borrow against
the value of this serendipitous form of wealth generation.
Many property owners deny that they are benefiting
from these increases in value and, of course, they may not benefit:
the value may be realised after their death. This means that property
taxes are difficult for politicians to sell to their voters.
A planning gain supplement is one tool for recouping
for society some of the wealth generated by a restricted supply
of planning permission. It has the advantage that the public perceives
planning gain as an undeserved windfall. But this tax has two
drawbacks. First, developers might postpone new building in anticipation
of a change in the legislation that would give them a more profitable
business climate. Secondly, it does nothing to address price changes
within the pool of existing property. A planning gain supplement
needs other mechanisms in its support.
4. Funding environmental projects using the
wealth from planning permission
A proposal that is worthy of further investigation
is to use the wealth generated by the planning system to fund
environmental and social projects. This would enable the UK to
fund projects which would be an example to the rest of the world.
This may be achieved using existing legislation on development
corporations.
GUIDELINES
(d) Despite the unfair transfer of wealth
that the planning system has engendered, it would be foolhardy
to allow a substantial fall in property values. The example of
Japan in the 1990s shows the economic damage that this can cause.
(b) House prices should be stabilised throughout
the country. This means adjusting the supply of planning permission
in any particular area to control property prices. Statutory bodies
should be created whose remit should be to create a steady flow
of planning permission to achieve price stability, ideally without
the use of compulsory purchase. The MPC may be seen as a model
for this.
(c) Statutory bodies could simply sell planning
permission to suitable bidders or they might buy suitable land
(or other development opportunities) and give themselves planning
permission before selling them on, thus capturing planning permission
wealth for the community.
(d) The some of the wealth captured by these
mechanisms should be earmarked for the development of sustainable
lifestyles. Few people notice that something of this nature already
happens. For example, in York, both all three institutions of
higher and further education (York Colleges, the University of
York St John and the University of York) are benefiting from the
grant of planning permission to build houses and offices worth
many tens of millions of pounds. These wealth generated by these
grants of planning permission go largely unnoticed. In my view
they have the nature of a stealth earmarked tax, earmarked for
education.
(e) The statutory bodies should use a proportion
of the wealth they create to fund advances in sustainable technologies
and sustainable communities. Since few people notice the wealth
generated by the grant of planning permission, the objections
to such expenditure would be limited.
(f) In a few cases, such as London, it may
be that there is limited opportunity for the expansion that the
grant of planning permission implies. In such cases it may be
possible for these statutory bodies to fund relocation and transport
links, following the model of the Metropolitan Railway in the
19th century.
5. Existing development corporation legislation,
a possible mechanism
It may be possible that the statutory bodies
mentioned above could be set up using existing development corporation
legislation.
New development corporations (note 5a) might
be created, which would have the power to grant planning permission
over significantly larger areas than they intend to develop. This
would enable the corporations to buy up land before definitely
identifying where planning permission is to be granted. Thus land
could be bought at or near agricultural prices. The value of the
planning permission could then be captured by the development
corporations on behalf of society with little or no use of compulsory
purchase.
6. The good life; a source of wealth
We have a country that, for many, is a pleasant
and safe place in which to live and, in urban areas in particular,
that offers plentiful employment (albeit that much of this is
low paid and insecure work within service industries). These benefits
are reflected in the demand for property. Towns and cities that
are attractive have experienced the highest rates of increase
in property values. This is not simply a tautological and self-evident
truth. The factors that contribute to "attractiveness"
can be estimated independently from the value that they add to
property stock. In addition, it is likely that impending environmental
change will leave this country with a relatively benign climate.
If a mechanism were to exist that could develop the UK as a leader
in the provision of environmentally friendly and sustainable communities
its attractiveness in a world that is beset with insecurity, fear
and actual environmental degradation would be assured.
7. Planning permission is an internationally
tradable commodity
If it is to be viewed as a commodity at all,
planning permission would appear to be one, which cannot be traded
across international borders. But "continuing" planning
permission (note 7a), embodied in property, can be sold or rented
to foreign nationals as migrants or visitors. The UK has only
about 10% of its land area developed and in many cases existing
developed land could be developed more intensively. Consequently,
given the factors set out in paragraph 8, we have a large store
of a valuable commodity. We should husband it wisely (note 7b).
8. Planning sustainable communities
The wise husbandry of the commodity represented
by planning permission would not be achieved were it simply to
be used to create the kind of unsustainable development that currently
blights much of our new build. The primary concern for the statutory
bodies that we propose would be to ensure that all new schemes
have as their first planning criterion, the need to produce radical
solutions for environmental sustainability. The factors that make
our region attractive to settlers must be nurtured and of these
the provision of an environment that is relatively secure from
future degradation is the most precious. An opportunity exists
to create a haven within our region. This is not simply an expression
of Utopian green thinking but an economic necessity. As our manufacturing
industries decline it would make sense to view our islands and
their social and physical infrastructure as a wealth generating
resource. To do this we must focus on creating an environment
that will offer security in the face of the turmoil that will
follow the change in global conditions consequent upon predicted
climate change.
9. Model settlements
There is an opportunity for using planning wealth
to develop model settlements, in which it will be possible to
live comfortably as a sustainable human. Whilst there are pioneering
examples of settlements designed to attain sustainability like
Findhorn (note 9a) or Bedzed (note 9b), a wide range of radical
examples is needed to show the world that worthwhile sustainable
lifestyles are possible. It should be pointed out that neither
of these two model settlements yet achieves a sustainable lifestyle
(note 9c).
NOTES
3a. A simple example shows this: Imagine a building
that falls off a cliff in circumstances where the problem was
not anticipated and the threat not reflected in its market value.
If the owners had movable planning permission that allowed them
to build on any land they could buy within 10 kilometres, they
would lose a fraction of the value of the doomed building.
5a. As an example, a corporation with the remit
to develop, say, three percent of the area within 20 kms of York
would be in a position to purchase between 3,000 and 4,000 hectares
of land. It would ask for offers from landowners who wished to
sell suitable land. Informal enquiries of farmers in the York
area suggest that some farmers would sell land at less than twice
agricultural prices. The development corporation would own the
most valuable asset, the planning permission, and could capture
its value on behalf of society.
7a. This is the sum of historically granted
planning permission including permission that has been granted
by default.
7b. This commodity is already traded internationally.
UK nationals have sold houses in order to emigrate to farms in
France whilst Polish workers have come here to rent property.
Expensive parts of London have apartments bought as holiday homes
for wealthy people from many countries. We should perhaps learn
from the way in which De Beers controls the diamond market.
9a. Findhorn, see http://www.ecovillagefindhorn.com
9b. Bedzed, see http://www.peabody.org.uk/pages/GetPage.aspx?id=179
9c. One measure of sustainable lifestyle is
ecological footprint measured in "global hectares".
A sustainable human would have a footprint of 1.9 hectares. Findhorn's
residents claim they have reduced their footprint to "2.78
hectares, a little over half the UK national average (5.4 hectares)",
which is the lowest footprint in the industrialised world and
"13% lower than those at the London eco-housing development,
BedZED."
See http://www.ecovillagefindhorn.com/new/index.php
January 2007
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