Abstract This article attempts to transcend the “substantivist” versus “proceduralist” controversy by proposing a theory of environmental planning combining understanding of procedures with understanding of features of the environment that make for a need for planning. It notes common elements in the views of the environment and environmental planning held by authors from divergent intellectual traditions: (a) they all conceive of the environment as, amongst other things, institutionally determined in the sense of legal barriers forming an important element of it; (b) they see the environment as the object of both private and public decision-making; (c) they see the environment as forming the object of conflict. On this basis, the article identifies land decision units as the foci of public and private decision-making concerning the environment. They are characterised by (a) the resources on them, (b) the channels linking them to other units, (c) the land regime providing barriers against intrusion, (d) land titles identifying the primary decision makers concerned. Public environmental measures taken because of externalities can aim at changing each of these attributes. Land decision units cover jurisdiction like seamless garments, and there is much interaction between what happens on them. Much as with measures of private actors, public environmental measures can mutually enhance each other or get in each other's way. Where this occurs, the article speaks of externalities of the second order. Environmental planning stands for the preparation of environmental plans taking care of such externalities, so that public environmental measures are taken with full knowledge of all their implications. A theory of environmental planning must combine awareness of the element of decision-making in planning with an understanding of the externalities of the second order arising out of the nature of environmental measures as being addressed to land decision units with definite locations in a spatial-temporal expanse. A case study of Dutch urbanisation policy illustrates the notion of externalities of the second order.