The potential of Land Value Capture to secure sustainable urban development supporting air quality enhancement

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Cities are both major contributors to pollutant emissions and victims of poor outdoor air quality (World Bank, 2010). Poor air quality has a direct negative impact on the environment and on human health which has consequences for economic growth and social care. The World Health Organization estimates that 80% of urban residents will be exposed to pollution above acceptable levels in 2018 (WHO, 2018). Whilst the causes of poor urban air quality vary by context some issues are widespread; in Western Europe 40% of the urban pollution is caused by transport and domestic fuel burning, whilst in China this figure is between 30 and 39% (Karagulian et al., 2015). Decreasing the pollutants from housing and transport is therefore a key priority for cities (Un Habitat, 2015), yet retro-fitting cleaner energy provision to houses and supporting alternative urban transport infrastructure can be both financially costly and limiting to short term economic growth. Urban governments, therefore, need to consider policy and finance mechanisms to both fund and adapt urban housing and transport to limit localised air pollution. Successfully meeting the two topics of this call: 'reduction in adverse environmental impact of cities'; and, 'the provision of safe, affordable and sustainable housing, transportation and basic services', is contingent upon creating a dynamic and responsive relationship between taxation and funding the urban adaptations and service provision. Land value capture (LVC) promises to be a highly efficient and effective urban policy to enable the recovery and reinvestment of value arising from government enhancements to urban sustainability and livability, in particular improving air quality. When practiced effectively LVC offers the potential to instigate a longer term process of investment in the physical environment to support the creation of sustainable communities: a virtuous circle of development and investment. LVC mechanisms are extremely diverse, from the active land assembly of municipalities in the Netherlands, to the use of auctions in China and the negotiated agreement of discretionary obligations in England. Each mechanism attempts to capture a proportion of the uplift in land value from state action (whether assembly, infrastructure provision or planning permission) to reinvest in social and environmental public goods. Yet, each system has been criticized for failing to meet the demands of the 21st century's most pressing issue of delivering economic growth within a context of climatic instability (see e.g. Crook et al., 2016). Capturing a proportion of land values in the development process offers an innovative way of improving housing- and transport-induced poor air quality through investing in urban environments. To do this we will explore two issues in China, the Netherlands, France and the UK:- the impact of air quality on economic activity and quality of life- the impact of alternative land value capture mechanisms for enhancing housing and transportation The adaptation of urban environments in China and Europe is necessary to enhance air quality as a mitigating factor in climate change and improve liveability. LVC is one attractive possibility for governments to fund these adaptations and enhance the economic, social and environmental sustainability of cities. The uplift in land values achieved through planning consent, infrastructure provision and the effects of economic growth may be captured by the state using an array of LVC mechanisms.