From the Wikipedia entry:
"Big Yellow Taxi" is a song originally written and performed by Joni Mitchell.
Mitchell got the idea for the song during a visit to Hawaii. She looked out of her hotel window at the spectacular Pacific mountain scenery, and then down to a parking lot.
Joni said this about writing the song:
"Living in Los Angeles, smog-choked L.A. is bad enough but the last straw came when I visited Hawaii for the first time. It was night time when we got there, so I didn't get my first view of the scenery until I got up the next morning. The hotel room was quite high up so in the distance I could see the blue Pacific Ocean. I walked over to the balcony and there was the picture book scenery, palm tree swaying in the breeze and all. Then I looked down and there was this ugly concrete car park in the hotel grounds. I thought 'They paved paradise and put up a parking lot' and that's how the song 'Big Yellow Taxi' was born."
The song was first put out as a single and then was put on the album Ladies of the Canyon in 1970; a later live version was released in 1975 and reached #24 on the U.S. charts. In 2005, it was voted #9 on Canadian Broadcast Company's list of the top 50 essential Canadian tracks.
Appearing to contradict the visit to Hawaii as having been the song's inspiration, author Rosemary Lord writes on page 91 of Hollywood Then and Now: "Joni Mitchell wrote a song, 'Big Yellow Taxi,' in which she sang about paving paradise and putting up a parking lot. She was referring to the Garden of Allah, which was sold to Lytton Savings and Loan in 1950. They demolished the colorful playground and built the parking lot mentioned in the song." This site describes the Garden of Allah as having been at "the mouth of Laurel Canyon," so the fact that Joni Mitchell spent time in and around Laurel Canyon would lend some credence to the Garden of Allah theory. Perhaps both are correct.