Mitchell (from a 1996 interview with the Los Angeles Times): "I wrote 'Big Yellow Taxi' on my first trip to Hawaii. I took a taxi to the hotel and when I woke up the next morning, I threw back the curtains and saw these beautiful green mountains in the distance. Then, I looked down and there was a parking lot as far as the eye could see, and it broke my heart... this blight on paradise. That's when I sat down and wrote the song."
This song is about taking things for granted and then missing them when they're gone. In the first verse she uses Waikiki, Hawaii as an example. It used to be paradise but now it's a fakey tourist destination. When you fly over the islands all of the other islands are nice and green, but when you go over O'ahu you see Waikiki and Honolulu buildings.
The line, "Took all the trees, put 'em in a tree museum, charged the people a dollar and a half just to see 'em" refers to Foster Gardens, a place in Waikiki which is basically a tree museum. It's a huge garden full of trees so tall you feel like Alice in Wonderland.
The line, "Put away that DDT now, give me spots on my apples but leave me the birds and the bees" refers to the insecticide DDT, which was used on crops. The deleterious effects of the chemical were in the news, as Americans learned that their food was being contaminated by its use - those spotless apples looked great but held hidden dangers. Also, birds were eating the insects and fish poisoned by DDT, which caused them to lay brittle eggs and put many species in danger, including the bald eagle. In 1972, DDT was banned for most uses.
Most of this song deals with environmental concerns, but in the last verse, the singer's boyfriend leaves her (her "old man"). This is where we hear the song's title for the first time, as the big yellow taxi comes to take him away.
The line, "They paved paradise and put up the parking lot" refers to the destruction of The Garden of Allah, a Hollywood hotel renowned for its rowdy celebration parties.
Mitchell lived in Laurel Canyon, which is a section of Los Angeles, when she wrote this song (that's the reference in the album title). At the time, big news in California was the battle to save the redwood forests, which were threatened by developers eager to cut down the trees to build shopping centers and other amenities. As Mitchell implies in this song, this could lead to trees someday becoming something you could only see in a museum.
A group called The Neighborhood hit #29 in the US with their version of this in 1970. Others to cover this include Percy Faith, Bob Dylan, Amy Grant, and Counting Crows (with Vanessa Carlton singing backup). Janet Jackson also sampled it in 1997 for her hit "Got 'Til It's Gone," thanks to her producer Jimmy Jam, who is a big Joni Mitchell fan.
In 1975, Mitchell released a live version that hit #24 in the US.
Mitchell included a slightly revised version of this song on her 2007 album Shine. She explained why to Mojo magazine February 2008: "It fits the record. I didn't have to change anything except the price, which went from 'a buck and a half' to an arm and a leg."
At the suggestion of Joni Mitchell, Amy Grant updated some of the words on her version, for instance changing the price of the museum from $1.50 to $25. Her cover was released as a single in 1995 peaking at #20 in the UK and #67 in the US.
The Counting Crows covered the song as an afterthought and originally for a hidden track on their 2002 album Hard Candy. It was only released as a single after Vanessa Carlton's back-up vocals were added for a new version that featured on the soundtrack to the 2003 movie Two Weeks Notice. Their version became the band's only Top 20 single in the UK, peaking at #13. In the US it reached #42.