“Willingness to Accept Local Wind Energy Development:  Does the Compensation Mechanism Matter?” Senior Research Fellow, Dr Jorge Garcia from the Center for International Climate and Environmental Research (CICERO) in Oslo, Norway.

Abstract

(Todd Cherry, Jorge H García, Steffen Kallbekken and Asbjørn Torvanger )

 Earlier studies have concluded that most stakeholders accept the normative case for providing benefits as a means of compensation to communities that are negatively affected by windpower development. However, the exact mechanisms for providing such benefits remains unclear. This article quantifies local attitudes towards two compensation mechanisms, namely individual payments and the provision of a local public good. To investigate individual preferences we implemented a Choice Experiment that recreated the siting of a hypothetical wind park in western Norway.  Individuals chose among alternative interventions where each alternative was characterized by three characteristics, visual impact of the wind farm, a deduction of the electricity bill or private compensation and the provision or not of a public sports facility.   To recreate the hypothetical wind farm, Photoshop visualizations were used.   In total, 802 respondents completed the survey and the response rate was 41 %.

Survey results show that those living closest to the wind farm and those who use the intervention site for recreational purposes demanded relatively higher compensation levels.  Preliminary statistical analyses using a Random Utility Model (RUM) framework indicate that local residents would trade lower levels of private compensation for higher levels of the local public good.  This result is, we believe, an important one for a number of reasons:  1) No systematic analysis of private versus public compensation to overcome local opposition has been undertaken before.  2) From the developers view point provision of a local public good as opposed to the use of individual payments may be a cost effective way to ease opposition for deployment plants.  3) Renewable energy developers may serve as possible facilitators in the process of coordinating contributions to the provision of a public good that is important for local communities.

Bio

Dr Garcia was holds a PhD in Economics from the University of Gothenburg (2007) and has been working as a Senior Research Fellow at the Center for International Climate and Environmental Research (CICERO) in Oslo, Norway since 2011. Prior to this he was an Assistant Professor in the Economics Department at Pontificia Universidad Javeriana. His research interests include environmental economics, environmental regulation, micro-economics, behavioral economics and complexity (exploratory)

 *Bring your lunch along, refreshments will be provided