This paper is a critical examination of certain aspects of the literature on the economics of planning gain. The principal question it addresses is whether the introduction of planning gain into the planning process is likely to enhance consumer welfare.
The wetland areas of England are under imminent threat of drainage for agricultural improvement. The immediate cause is the local drainage surveys produced under the Water Act 1973. Problems identified in these surveys are subjected to cost-benefit appraisal. Examination of a selection shows that these appraisals are technically defective and result in an overstatement of the benefits and in an overinvestment in land drainage. The main defects are: first, a failure to assess amenity and conservation losses; second, use of prices that contain a substantial element of income transfer which is not netted out; third, a failure to properly calculate the rate of land conversion—a crucial variable; fourth, the project appraisal period is arbitrarily chosen or treated as a variable; fifth, the use of theoretical rather than expected agricultural yields; sixth, the level of flood protection aimed at is too high for the stated objective; and, last, anticipated flood losses are not deducted.
In this paper, the problem of achieving sustainable development in the context of the Common Agricultural Policy (CAP) and other policy suggestions is examined. Sustainable development is defined as a commitment to conserve necessary biological, cultural, and aesthetic capital for future generations. This is not a costless process. Constraints are required on current economic activity, entailing sacrifices by the current generation, if sustainability requirements are to be met. Specific wildlife sites within the farmed landscape are critical to the sustainability programme. Conservation of these sites entails the continuation of specific and often technically obsolete farming practices. Their conservation cannot be ensured by the practice of efficient sustainable agriculture as advocated by the authors Pretty and Howes. Furthermore, those authors are wrong in believing that such agriculture could be profitable without continuing subsidy. The approach of the CAP is to make payments for the practices necessary to safeguard these sites. However, the economic sustainability of the CAP is doubtful. Its costs are excessive and reforms are not reducing the excessive financial burden and resource costs. Alternative reform packages involving conservation through cross-compliance have even greater resource costs. The ability to safeguard these critical sites in the long run is therefore questionable. This suggests there is a need to rethink sustainability requirements for cultural and biological diversity.
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