Another reason to hate planning

Regular readers do not need another reason to despise Britain's complex planning system, they will of course know that it – increases rents massively, retards economic growth, and produces deeply ugly buildings. But like a balcony in a London new build, you're getting one whether you like it or not.

Economists Matthew Kahn and Edward Glaesar found that denser cities are greener cities. That is to say, when you add up the environmental costs of transport, heating and household electricity usage, densely packed cities New York and San Francisco impose dramatically fewer costs on the environment.

This graphic from a 2014 Washington Post article, illustrates the issue perfectly. Barcelona and Atlanta have comparable populations, yet Barcelona is able to cram that entire population into just 1/25th the total size of Atlanta. Leading to Barcelonans making fewer, shorter trips in cars and instead using public transit and cycling more frequently. As a result, Barcelona emits dramatically fewer tonnes of CO2 on transport. And it's not just Carbon Emissions that fall when cities become more dense, according to the World Resources Institute a move to denser cities could save $15tn in infrastructure spending.  

Unfortunately, the article presumes that the only way to achieve denser cities is by careful government planning. Yet, as Glaesar and Kahn show, it's often planning that's the biggest obstacle to greater density. The greenest parts of the US, were also the parts with the toughest land-use regulation, blocking development within green cities and pushing it to brown suburbs (San Francisco's restrictive planning laws deter local developments, but do nothing to prevent development across the US). 

Instead of subsidising renewable energy and dictating new energy efficiency standards, the Government could tackle climate change much more cheaply, by doing two simple things. First, radically simplify our planning system by scrapping most, if not all, restrictions on new developments that artificially limit the supply of housing. Second, encourage councils to allow more building by, once again, letting them fully retain their revenue from business rates and council tax, giving them a financial incentive to avoid using the planning system to block new developments.