Site Revenue and the Environment

The Prime Minister of Spain, Felipe Gonzales, at the recent Rio conference said, "Five hundred years ago men set out to discover the size of the earth. At this meeting we discovered its limits."

Concern about the environment is widespread. And rightly so. Pollution of the land, air and water, industrial wastes, over development, chopping down of forests and the destruction of nature, is everyone's concern. The underlying cause however, being a system which permits land monopoly and land speculation, is rarely given attention.

Urban development

As a community develops, large areas of land are soon acquired for speculative purposes.1 This results in leap-frog developments with people being forced to look further out to find cheap land. Therefore all the facilities needed for a growing population are stretched out and made more expensive than need be. (Examples being transportation, water supply, gas, electricity, etc.) Site revenue would correct this situation, as people would be able to acquire sites, closer to the city centre, more cheaply. Development would also be at a far more normal pace, reducing the cost of supplying services and in many cases stopping the premature invasion of lands that should otherwise be left as farmland or wilderness.

Furthermore, people could enjoy both the advantages of urban culture, as well as proximity to nature, instead of as now, either being crowded in the cities or settled so far away that urban amenities are not conveniently available, eg; bus and train services.

Site revenue would also promote decentralisation of urban areas, and give to each decentralised area a firm revenue base with which to support its own development.

Environmental degradation

It can be seen that environmental problems are worst, where concentration of land ownership is at its worst. In Brazil for example, the destruction of the rain forests is destroying the "lungs" of the earth. People crowded in urban slums go to farm these areas, often unsuitable for agriculture anyway, because other prime agricultural land is owned by a few latifundistas, often purely for speculative purposes. The destruction of our rain forests will never be stopped until site revenue is implemented, at least in part; or of course there is no rain forest left to cut down...

Site revenue would ensure speculatively held land is made available to the landless, without first resorting to rain forest land, which of course is currently untitled, and therefore "free" to slum dwellers.

Consider another example: "On September 8 1992, a monsoon storm hit the Himalayas, dumping 52 cm of rain in 36 hours. Flood control measures were simply overwhelmed. In the following days, some 3,000 people died or disappeared after water and mud submerged more than 4,000 villages and towns throughout Pakistan's Punjab and Northwest frontier provinces, Indian and Pakistan held Kashmir, and eastern Afghanistan. All of Pakistan's five main rivers overflowed." But here's the key. "Many of Islamabad's poor -- squatters who live in dry riverbeds -- lost their homes in the flash floods."2

Western media portray the tragedy in all its graphic detail. "There are too many people!" it is said. These people die, or lose their homes in such "natural disasters" only because they are landless; forced to live where nature did not intend. Living in a dry riverbed will certainly subject you to flash flooding!

In Pakistan, the same as elsewhere, much land is withheld from better use because its owners treat it as a financial investment. (Further examples are given in other fact files.) And besides, one may well question whether in fact such flooding is a natural disaster anyway. Rivers flood as part of a natural eco-cycle. Further research may also implicate the vast clearing that is continuing unabated in the Himalayas region; clearing all too often in response to the lack of land available elsewhere. The plight of disinherited people is often attributed to overpopulation or overuse of land. The real reason is the withholding of land for speculative purposes. Site revenue would make such an activity unproductive and expensive.


Often, measures advanced by well meaning environmentalists to improve the situation require government regulation and restriction of individual liberty, along with a good dose of monitoring that becomes increasingly costly to administer. Under site revenue, and relief from other taxes, high environmental standards would be far easier to achieve.


Environmentalists are also deeply concerned about our reliance on fossil fuels, and rightly try to shift economies to renewable, less polluting energy sources. Site revenue would provide a significant incentive shift in this direction. At the current state of technology, resources such as solar power are not yet cost competitive with fossil fuels. The energy industries however, all receive various indirect subsidies, and the techniques for utilising coal and oil have been refined for over a hundred years. One of the major causes of this has been that while people (and corporations) can own the potential energy resources themselves, in the ground, it is not possible to own the sun. Profits from oil and coal come from land and capital, whereas profits from various forms of solar energy come almost exclusively from capital.

Site revenue collects ground rent, through higher rates charges on the value of land, thus taking for government revenue the profits of land ownership. At the same time the burden on labour and capital is eased via lower taxes. Under site revenue, solar power becomes far more competitive with today's entrenched -- but environmentally destructive -- fossil fuels.


For all of these reasons, site revenue will improve our environment.


  1. The fact file "Land and Economic Rent" illustrates this point
  2. Asiaweek Sept 25 1992 - p36

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