We need to rethink the Green Belt

Intensive pig farming: both the sort of thing that happens in the Green Belt, and a metaphor for its effect on Londoners. Image: Wikimedia Commons.

It will surprise no one to hear that the UK, particularly London and southern England, is experiencing a housing crisis – one that appears to be getting worse. According to the LSE’s Paul Cheshire, since the 1980s we have systematically under-built between 1.6m and 2.3m homes. House prices are now extremely high after a long period of growth, and they may continue to rise for the foreseeable future.

A new paper published today by the Adam Smith Institute reviews the evidence around England’s housing shortage, with particular focus on the Green Belt. It concludes that the Green Belt is restricting the supply of housing in a way that has a significant impact on prices – and doing so in a way that effectively redistributes wealth from poor to rich. To solve the housing crisis, we argue that we must scrap or, at a minimum, roll back the Green Belt.

Developable land, and hence the supply of housing, is constrained by the Green Belt. As a result, houses have become an investment good whose cost reflects expected future increases in demand, not just the cost of supplying a house at a given quality point. 

That raises the barriers to home ownership significantly for anyone who does not have money to invest, and reduces the quality and size of housing across the board. Prices rose by 350 per cent in real terms in the period from 1955 to 2002 period. Today, housing costs per square meter in England are double what they are in the Netherlands, one of the most densely populated countries on earth. 

In other words, the Green Belt is giving us smaller, more expensive homes whose cost is more akin to that of a risky investment good than a place to live. The biggest losers here are people on low incomes – though the general upward pressure on land prices means that businesses also face punishingly high rents in some cities.

The scale of the housing crisis is significant, but minimal reforms to ease it would barely affect the composition of England’s landscape at all. Ninety per cent of land in England remains undeveloped, and just 0.5 per cent would be required to fulfil this decade’s housing needs. Around London, we favour previous proposals to remove restrictions on land within a ten minute walk of existing railway stations to allow the construction of 1 million new homes. That would use up around 3.7 per cent of the capital’s Green Belt.

But these policies only defer the problem, and in fact the Green Belt as it is currently comprised is much less valuable by any objective metric than is commonly believed. More than a third of protected Green Belt land is intensively farmed agricultural land, which generates net environmental costs – in other words, it is worse than doing nothing with the land at all. This contrasts unfavourably with gardens and parks, both of which are relatively biodiverse and deliver net environmental benefits.

What’s more, because it drives up the price of inner city land, there is a trade-off between Green Belt green space, and urban green space like gardens and parks. This represents an enormous welfare loss. Each hectare of city park is estimated to be of £54,000 total benefit per year to residents, compared to a mere £889 per hectare for Green Belt land on the fringe of an urban area. The question should not be if we want green space, but where.

Houston, Texas, is often used by both supporters and opponents of planning liberalisation. The city is one of the least planned in the world, and is enormously sprawling and sparsely populated for its size. Commuting times in Houston are some of the highest in the United States, which is a major cost. But the donut-like nature of London’s existing commuter belt means that a more naturally sprawling capital may actually reduce commuter times here: commuters who currently live in towns far from the city would be able to live in new homes at its edge.

What’s more, in Houston, housing and living costs in general are extremely low. It’s arguable that because house prices were almost wholly a function of supply and demand that this is why Houston’s housing market escaped the house price collapse almost unscathed

Some will point out that the shortfall in house construction since the 1980s has to a significant extent been a consequence of almost no social housing being built. This is a fair point, but it misses the fact that social housing development on urban land faces exactly the same land costs as private construction. According to polling by the Joseph Rowntree Foundation almost nobody actually wants to live in social housing compared to owning their own home – but even if you want to ignore this inconvenient fact, you still must increase the supply of developable land by reforming the Green Belt and planning in general.

All public policy entails trade-offs of this sort, and both defenders and opponents of the Green Belt should accept that there will be winners and losers whatever the policy is. The relevant question is who wins and who loses. The overwhelming losers from the Green Belt appear to be city-dwellers on low incomes; the winners appear to be middle-income homeowners. Whether we ditch the Green Belt or gently tinker with it, it is hard to think of a more important policy reform to improving the lives of Engand’s worst off.

Sam Bowman is deputy director of the Adam Smith Institute.

 
 
 
 

Seven climate change myths put about by big oil companies

Oil is good for you! Image: Getty.

Since the start of this year, major players within the fossil fuel industry – “big oil” – have made some big announcements regarding climate change. BP revealed plans to reduce its greenhouse gas emissions by acquiring additional renewable energy companies. Royal Dutch Shell defended its $1-$2bn green energy annual budget. Even ExxonMobil, until recently relatively dismissive of the basic science behind climate change, included a section dedicated to reducing emissions in its yearly outlook for energy report.

But this idea of a “green” oil company producing “clean” fossil fuels is one that I would call a dangerous myth. Such myths obscure the irreconcilability between burning fossil fuels and environmental protection – yet they continue to be perpetuated to the detriment of our planet.

Myth 1: Climate change can be solved with the same thinking that created it

Measures put in place now to address climate change must be sustainable in the long run. A hasty, sticking plaster approach based on quick fixes and repurposed ideas will not suffice.

Yet this is precisely what some fossil fuel companies intend to do. To address climate change, major oil and gas companies are mostly doing what they have historically excelled at – more technology, more efficiency, and producing more fossil fuels.

But like the irresponsible gambler that cannot stop doubling down during a losing streak, the industry’s bet on more, more, more only means more ecological destruction. Irrespective of how efficient fossil fuel production becomes, that the industry’s core product can be 100 per cent environmentally sustainable is an illusion.

A potential glimmer of hope is carbon capture and storage (CCS), a process that sucks carbon out of the air and sends it back underground. But despite being praised by big oil as a silver bullet solution for climate change, CCS is yet another sticking plaster approach. Even CCS advocates suggest that it cannot currently be employed on a global, mass scale.

Myth 2: Climate change won’t spell the end of the fossil fuel industry

According to a recent report, climate change is one factor among several that has resulted in the end of big oil’s golden years – a time when oil was plenty, money quick, and the men at the top celebrated as cowboy capitalists.

Now, to ensure we do not surpass the dangerous 2°C threshold, we must realise that there is simply no place for “producers” of fossil fuels. After all, as scientists, financial experts, and activists have warned, if we want to avoid dangerous climate change, the proven reserves of the world’s biggest fossil fuel companies cannot be consumed.

Myth 3: Renewables investment means oil companies are seriously tackling climate change

Compared to overall capital expenditures, oil companies renewables’ investment is a miniscule drop in the barrel. Even then, as companies such as BP have demonstrated before, they will divest from renewables as soon as market conditions change.

Big oil companies’ green investments only produce tiny reductions in their overall greenhouse gas emissions. BP calls these effects “real sustainable reductions” – but they accounted for only 0.3 per cent of their total emissions reductions in 2016, 0.1 per cent in 2015, 0.1 per cent in 2014, and so on.


Myth 4: Hard climate regulation is not an option

One of the oil industry’s biggest fears regarding climate change is regulation. It is of such importance that BP recently hinted at big oil’s exodus from the EU if climate regulation took effect. Let’s be clear, we are talking about “command-and-control” regulation here, such as pollution limits, and not business-friendly tools such as carbon pricing or market-based quota systems.

There are many commercial reasons why the fossil fuel industry would prefer the latter over the former. Notably, regulation may result in a direct impact on the bottom line of fossil fuel companies given incurred costs. But climate regulation is – in combination with market-based mechanisms – required to address climate change. This is a widely accepted proposition advocated by mainstream economists, NGOs and most governments.

Myth 5: Without cheap fossil fuels, the developing world will stop

Total’s ex-CEO, the late Christoph de Margerie, once remarked: “Without access to energy, there is no development.” Although this is probably true, that this energy must come from fossil fuels is not. Consider, for example, how for 300 days last year Costa Rica relied entirely on renewable energy for its electricity needs. Even China, the world’s biggest polluter, is simultaneously the biggest investor in domestic renewables projects.

As the World Bank has highlighted, in contrast to big oil’s claims about producing more fossil fuels to end poverty, the sad truth is that by burning even the current fossil fuel stockpile, climate change will place millions of people back into poverty. The UN concurs, signalling that climate change will result in reduced crop yields, more waterborne diseases, higher food prices and greater civil unrest in developing parts of the world.

Myth 6: Big oil must be involved in climate policy-making

Fossil fuel companies insist that their involvement in climate policy-making is necessary, so much so that they have become part of the wallpaper at international environmental conferences. This neglects that fossil fuels are, in fact, a pretty large part of the problem. Big oil attends international environmental conferences for two reasons: lobbying and self-promotion.

Some UN organisations already recognise the risk of corporations hijacking the policy-making process. The World Health Organisation, for instance, forbids the tobacco industry from attending its conferences. The UN’s climate change arm, the UNFCCC, should take note.

Myth 7: Nature can and must be “tamed” to address climate change

If you mess with mother nature, she bites back. As scientists reiterate, natural systems are complex, unpredictable, and even hostile when disrupted.

Climate change is a prime example. Small changes in the chemical makeup of the atmosphere may have drastic implications for Earth’s inhabitants.

The ConversationFossil fuel companies reject that natural systems are fragile – as evidenced by their expansive operations in ecologically vulnerable areas such as the Arctic. The “wild” aspect of nature is considered something to be controlled and dominated. This myth merely serves as a way to boost egos. As independent scientist James Lovelock wrote, “The idea that humans are yet intelligent enough to serve as stewards of the Earth is among the most hubristic ever.”

George Ferns, Lecturer in Management, Employment and Organisation, Cardiff University.

This article was originally published on The Conversation. Read the original article.