The Full Transcript
Daniel Raimi: Welcome to Resources Radio, a podcast produced by Resources for the Future. I’m your host, Daniel Raimi. If you are a regular listener, you are aware that local opposition to clean energy initiatives is a significant hurdle in achieving a successful energy transition. Today, we delve into this issue with Stephen Jarvis, an assistant professor of environmental economics at the esteemed London School of Economics.
Stephen has recently published an insightful paper titled “The Economic Costs of NIMBYism.” His research compares the local economic impacts of wind and solar initiatives in the United Kingdom, exploring how these projects affect property values while also weighing the benefits they generate, including reduced greenhouse gas emissions and improved local air quality. Furthermore, he investigates whether local policymakers adequately factor in these various benefits and costs when making decisions on the construction of renewable energy projects in their jurisdictions. Most importantly, we will discuss actionable strategies for mitigating local opposition to promote a swifter and more equitable energy transition. Stay tuned as we unravel these complexities.
Stephen Jarvis from the London School of Economics, welcome to Resources Radio.
Stephen Jarvis: Delighted to be here.
Daniel Raimi: Stephen, we will be examining your intriguing new paper about wind and solar energy, particularly the projects people tend to oppose in their communities. Before we dive deeper, I’d love to hear about your journey into environmental economics. Was there an influential experience during your childhood, or did this passion evolve later? What led you into this field?
Stephen Jarvis: Good question! I don’t have any profound childhood tales to share, but I did spend a lot of time outdoors, which cultivated my appreciation for nature. I took an environmental economics class during my undergraduate studies, and now I actually teach that same course! What really ignited my interest was my first job at the UK energy regulator, Ofgem, where I discovered a genuine passion for policy work and gained a comprehensive understanding of the energy sector. This experience significantly shaped my subsequent research interests.
Daniel Raimi: That’s fascinating! Where did you grow up?
Stephen Jarvis: I harken from the northwest of England, specifically a small city called Lancaster.
Daniel Raimi: We’re turning our attention to wind and solar projects in the UK. As you’ve mentioned before, local opposition to these developments is not unique to the US. Can you elaborate on the key factors contributing to this resistance?
Stephen Jarvis: Absolutely. The opposition to these projects is varied. While some individuals wholeheartedly support renewables, many residents express significant concerns. According to surveys and local planning correspondence, common objections revolve around visual disruption—a frequent complaint entails how projects can tarnish the aesthetic of the rural landscape. Other concerns include noise pollution from the turbines, ecological impacts on wildlife, particularly birds, and the conversion of productive agricultural land into renewable sites. While all these aspects contribute to opposition, visual impact tends to be the most frequently cited issue.
Daniel Raimi: That aligns with trends observed in the United States as well. Can you walk us through the data you collected for your analysis, especially regarding how you estimated the costs and benefits associated with wind and solar projects?
Stephen Jarvis: Certainly! In this paper, I aimed to dissect the dynamics behind project approvals and rejections. It’s typically challenging to analyze projects that don’t get built, but I utilized a comprehensive UK government database that catalogs renewable energy applications vying for permits. This allowed me to compare successful projects against those that were denied. Looking at roughly 4,000 utility-scale wind and solar projects dating back to the mid-1990s, I combined this data with numerous other sources to estimate specific metrics. These included capital and operating costs, the projected value of electricity generated, and environmental impacts like the value of reduced carbon emissions and local air pollution.
Stephen Jarvis: Accurately estimating project productivity over their lifetimes is essential. I developed predictions based on local resources and turbine technologies to ascertain potential electricity output. Additionally, I leveraged UK government data to estimate emissions intensity and local pollution reductions tied to the renewable projects supplanting existing energy generation on the grid.
This thorough analysis allowed me to articulate the environmental benefits such as carbon and local pollution offsets throughout the project’s lifespan, quantified using metrics like the social cost of carbon.
Daniel Raimi: This sounds comprehensive! As we continue discussing permitting decisions, could you clarify who adjudicates these permits? Is it national government, local authorities, or a mix of both?
Stephen Jarvis: Great question! The decision-making landscape varies by project. Historically, the UK process has been largely localized. Local county officials, particularly those in planning and permitting boards, handle the majority of approvals. However, larger projects classified as nationally significant can escalate to the national planning agency, sometimes requiring ministerial involvement. Though this is the case in the UK, many jurisdictions, including Europe and the US, often exhibit a similar reliance on local officials for these decisions.
Daniel Raimi: Agreed! Now, let’s discuss property values and their relation to wind and solar project development. What insights can you share about how these projects affect property values, and how do your findings align or diverge from previous studies?
Stephen Jarvis: The study’s aim was to delve into these localized impacts, complementing traditional metrics such as capital and electricity values. Numerous studies have tracked property value fluctuations stemming from these projects, and my analysis revealed a consistent pattern—particularly wind projects trigger a decrease in nearby property values, approximately an 8% drop for homes within four kilometers. This figure aligns with other research findings, affirming that the decline is more pronounced close to larger projects, especially those with visible sightlines.
Other recent studies suggest these effects might diminish over time. The anticipated patterns, such as proximity and visibility, consistently impact property values across various studies.
Daniel Raimi: That’s intriguing! Could you provide more details on the variations in costs and benefits based on project characteristics? I’m also keen to know how location influences these factors.
Stephen Jarvis: Certainly! The costs and benefits, especially localized impacts, vary significantly across projects. Projects situated near populated or affluent areas typically exert a more substantial aggregate impact on property values. Conversely, projects in remote locations experience diminished effects. In the UK, there’s been a notable shift toward offshore wind development due to challenges faced by onshore projects, as residents often experience a disconnect with sights and sounds from offshore installations, resulting in an “out-of-sight, out-of-mind” mentality. Beyond property values, many costs and benefits vary geographically as well.
Transmission costs often decrease for projects located closer to population centers, while projects situated in remote areas can experience escalated operational expenses. Similarly, the amplitude of wind resources alters the effectiveness and costs associated with energy generation, emphasizing the intricate balance of considerations for site selection.
Daniel Raimi: That’s an informative perspective! How consistent are the benefits across various project locations? I assume greenhouse gas reduction benefits might be relatively uniform, correct?
Stephen Jarvis: Your assumption is partially correct. In an interconnected grid scenario lacking transmission constraints, placing renewables anywhere would yield similar benefits concerning electricity prices and emissions displacement. However, the UK does exhibit some limitations, particularly when transferring power from Scotland to southern population centers. Projects located near high-demand areas, such as offshore sites along the southern coast, may incur higher incremental values. Yet overall, the variability in cost and benefit estimates remains relatively modest, with the predominant variable being the local wind resource—particularly productive regions like northern Scotland and the North Sea.
Daniel Raimi: Right! Your paper features enlightening maps illustrating the capacity and locations of various wind and solar projects, revealing a clear concentration of wind installations in the north and offshore regions, while solar projects are primarily situated in the sunnier southern central regions of the country—am I accurate in this assessment?
Stephen Jarvis: Yes, that’s quite correct. While relative to other regions, the southern part of England is where solar projects are more viable due to its comparatively greater sunshine exposure.
Daniel Raimi: Understood! Let’s now explore your findings related to permitting decisions. What correlations did you discover between project costs incurred by landowners or community members and the likelihood of project approval?
Stephen Jarvis: This specific analysis was pivotal in my research. Many previous studies assessed local property value impacts, but I sought to understand the implications for renewable energy policy efficiency. Noting that reduced property values could discourage project development raises the question: how do these costs juxtapose against broader societal benefits? The core aim was to analyze how local planning officials consider these localized costs within the overall permitting framework.
By comparing successful projects with those that failed to secure permits, I discovered a somewhat predictable trend—local decision-makers are far more attentive to neighborhood property value impacts, often overlooking wider societal costs and benefits related to climate change mitigation.
Daniel Raimi: That’s compelling. Can you paint a picture of the balance sheet, so to speak? If we consider a major wind project denied because of residents’ worries regarding property values, what scales of cost and benefit are we examining?
Stephen Jarvis: Yes, when assessing these planning decisions, we found that local officials tend to be significantly influenced by localized costs, particularly as they pertain to wealthier areas. For instance, a £10 million increase in local property-value impacts correlates with a 2-2.5% decrease in approval likelihood. In stark contrast, broader societal benefits from reduced carbon emissions appear to have far less impact on decision-making processes.
This suggests that more socially beneficial projects may have reduced chances of approval due to localized costs overshadowing their broader benefits.
Daniel Raimi: If we expand this discussion to consider the overall societal costs incurred by postponing renewable projects, how significant are these aggregate impacts?
Stephen Jarvis: The impacts are indeed significant. The biases in the planning process where local issues are prioritized could result in an array of inefficient outcomes, culminating in the rejection of highly beneficial projects.
To illustrate this inefficient allocation, I analyzed a basket of proposed projects and posited that a more efficient approval process could save approximately 25% of related costs while achieving the desired renewable energy deployment.
Considering the UK has invested nearly £150 billion in wind and solar energy initiatives, the cost savings from a more effective organizing strategy could translate into substantial financial relief for taxpayers. Furthermore, a more expansive approach to project approvals could enable a renewable capacity increase of about 50% beyond current levels, highlighting that localized opposition significantly hampers the transition to clean energy.
Daniel Raimi: Can you quantify that in more relatable terms? Are these 25% savings measured in millions or billions of pounds?
(By the way, do you use euros in the UK, or are pounds still in use?)
Stephen Jarvis: Pounds, absolutely! In terms of scale, with around £150 billion invested in renewable projects, cutting 25% off this sum equates to a significant amount of money—this is genuine economic savings. Moreover, it highlights the fact that we may not be committing enough resources initially. A more receptive approach to project approvals could have resulted in developing 50% more renewable energy capacity than we’ve accomplished thus far, emphasizing the inefficiencies prevalent in localized permitting processes.
Daniel Raimi: Now, let’s pivot towards potential solutions. Acknowledging the reality that governmental procedures can be slow to transform, what recommendations do you have for accelerating the construction of beneficial renewable projects?
Stephen Jarvis: Don’t lose hope! Several promising solutions currently exist. Firstly, aligning local residents’ incentives with broader societal objectives is essential. Creating community benefit funds allows individuals in affected areas to share in the gains generated by local projects. Similarly, providing local energy bill reductions or direct payments can also enhance local support. This builds goodwill among residents and can sway local decision-making towards project approval.
Another potential solution involves reforming the permitting process itself, possibly devolving more authority to state or national levels for overarching decisions. Addressing localized concerns while simultaneously tackling national and global priorities, like climate change, is a challenging yet crucial undertaking.
Daniel Raimi: These solutions resonate with discussions happening in the U.S., where differing states approach control over renewable projects variably—some centralizing more power, while others retain local governance.
When considering local benefits for communities, how do public finance schemes in the UK compare to those in the U.S.? For instance, here, wind developers typically offer lease payments to landowners and contribute significantly via taxes supporting local schools—do similar models exist in the UK?
Stephen Jarvis: The UK presents a unique situation; it operates under a predominantly centralized model where tax revenues from renewable projects often do not directly benefit local authorities. Instead, much of this funding flows to the central government. Research from other countries, such as Germany, indicates that adjusting tax rules to allow more funds to remain within local jurisdictions can alleviate local opposition.
Exploring the dynamics surrounding landowners is equally intriguing. While many nearby residents express concerns, landowners often benefit greatly from project proposals due to lucrative lease agreements. I’ve been analyzing who these landowners are and the negotiation processes at play, which illuminate the significant revenue opportunities tied to renewable energy projects.
The US Department of Energy estimates that wind landowners collectively earn in the vicinity of $1 billion annually. Similarly, in Scotland, it’s estimated that such agreements generate around £100 million yearly, which is noteworthy. A critical aspect to explore is the identity of these landowners—are they local or external entities?
Daniel Raimi: Very interesting! Recent reports from the US Department of Agriculture also analyze the financial benefits accrued by farmers from energy developments, including renewables and extractive industries.
As a final thought, I want to touch on misinformation. Speculating a bit, do you think conspiracy theories surrounding wind and solar projects may exacerbate local opposition, diverging from the clear economic impacts presented in your study?
Indeed, I gathered insights from public commentary at county hearings. Evidently, projects inundated with negative public feedback face severe approval challenges. It’s clear how misinformation, stemming from dubious sources, can significantly influence public perception and sentiment against projects not aligned with established scientific principles.
Daniel Raimi: Misinformation has undeniably permeated discussions regarding climate policy, clouding rational discourse.
Stephen Jarvis, I sincerely appreciate the enlightening discussion today. Your research offers vital insights, and I’m sure our audience will benefit greatly.
To conclude, we ask each Alex Reed to share notable recommendations—anything you’ve recently read, watched, or listened to that merits our audience’s attention?
Stephen Jarvis: Certainly! I’d like to highlight two books, though they may not be groundbreaking to your audience. Isabella Tree’s book Wilding explores the nuances of the rewilding movement in the UK and remains engaging. However, I’m particularly enthused about a photographic exhibition I attended earlier this year featuring Edward Burtynsky’s work. Burtynsky is a Canadian photographer whose retrospective display captivated me with striking aerial images of various extractive industries and captivating natural environments. If you get a chance to see it, I highly recommend it for its powerful environmental message.
Additionally, Burtynsky has published a stunning coffee table book accompanying the exhibition—a wonderful option if you can’t see it in person.
Daniel Raimi: I loved the photography I found online—truly captivating! Thank you for sharing that.
Once again, Stephen Jarvis from the London School of Economics, thank you for your invaluable insights and for joining us. It was a pleasure speaking with you.
Stephen Jarvis: Thank you for having me.
Daniel Raimi: You’ve been listening to Resources Radio, a podcast presented by Resources for the Future (RFF). We’d appreciate any ratings or comments on your preferred podcast platform. We also welcome your suggestions for future topics.
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RFF is an independent nonprofit research institution situated in Washington, DC, committed to enhancing environmental, energy, and natural resource decisions through unbiased economic research and policy engagement. The perspectives expressed by podcast guests may diverge from RFF experts, its officers, or board members. RFF refrains from endorsing specific legislative proposals.
Resources Radio is produced by Elizabeth Wason, with music composed by me, Daniel Raimi. Join us next week for another enlightening episode.
