The Social-Environmental Impacts Of Renewable Energy Expansion In Scotland

Investments in renewable energy, such as new wind farms and hydro schemes, are being promoted as a new means of diversifying rural employment in Scotland*. However, such investments are associated with a range of environmental impacts which might be detrimental to other economic activities, such as those based on nature tourism. When designing policy instruments for more sustainable energy futures, therefore, the main goal is to generate the lowest possible adverse socio-economic and environmental impacts ensuring a certain degree of economic efficiency. We use a Choice Experiment to quantify peoples' preferences over these multiple impacts of renewable energy in Scotland. We find that landscape, wildlife and air pollution impacts are all significant for both urban and rural respondents. Only rural respondents, however, value job creation. We also show the differences in the welfare gain associated with alternative renewable energy investments between rural and urban households.