On the economic approach to the containment of land consumption

This paper highlights the potential contribution of economics to the formulation and implementation of land use policies that aim at a more sustainable use of land. It introduces the economic way of conceptualizing and understanding the problem of land consumption and discusses exemplary policy instruments based on this understanding: taxation of either land use or sealing and tradable development permit schemes. These examples are drawn from current land use policy debates in Germany but likewise apply to other countries and regions. The authors conclude that economic land use policy instruments can make a significant contribution to the containment of land consumption, i.e., to a more efficient use of already developed sites and to a denser development of new sites. However, the examples presented also clearly demonstrate that incentive-based approaches need a tight regulatory planning framework to produce positive environmental effects.