Land in Europe: prices, taxes and use patterns


Courtesy of European Environment Agency (EEA)


Developments in land-use patterns across Europe are generating considerable concern, particularly in relation to achievement of environmental goals. Land‑use trends — such as urban sprawl and land abandonment — are jeopardising the future for sustainable land use. Moreover, these trends endanger the achievement of European environmental goals in areas such as biodiversity protection and water management and also hinder the effectiveness of instruments in these areas, including the Natura 2000 network and the Water Framework Directive.

Conventional instruments for land-use planning are often criticised for their command-and-control approach. Particularly in countries where spatial planning is still a poorly developed instrument, attempts to put in place coordinated land‑use
planning fail in the face of economic interests and spontaneous (economic) developments.

While the further development of sound spatial planning instruments in Europe is undoubtedly an urgent requirement, the complexity of land‑use developments and newly arising challenges to the environment such as climate change necessitate the
consideration of unconventional policy approaches. It may be possible to integrate new approaches into a policy mix that can deal more effectively with current and future threats to our natural resources.

The use of economic instruments in a future environmental policy mix could help. Economic processes have a strong self-regulatory power, often revealing at an early stage the outcome of future development tendencies. There is, however, scope for greater efficiency within economic mechanisms to increase the likelihood of achieving specific goals.

Land is far from being a 'homogenous economic good': plots of land differ markedly in terms of their geographic, environmental and other characteristics. Therefore, this market is not a classical one from an economic point of view, and a full understanding of its functioning is needed to ensure that any economic instruments put in place are appropriate. In terms of land use, changes often occur when land property changes hands. The arrival of a new category of customer can change the market by creating demand. Such new types of owner can instigate broad land‑use changes. Because one broad goal of environmental policy is to prevent unsustainable land‑use changes, the land market is a focal point of environmental policy.

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