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Green vs. Green: Measuring the Compensation Required to Site Electrical Generation Windmills in a Viewshed

  • Peter A. Groothuis
  • Jana D. Groothuis
  • John C. Whitehead

A willingness to accept framework is used to measure the compensation required to allow wind generation windmills to be built in the mountains of North Carolina. We address why the NIMBY syndrome may arise when choosing site locations, the perceived property rights of view-sheds, as well as the perceptions of the status quo in the southern Appalachian Mountains. We find that individuals who perceive wind energy as a clean source of power require less compensation. Those who retire to the mountains or individuals who have ancestors from Watauga County require more compensation to accept windmills in their view-shed. We find that annual compensation is about twenty three dollars per household. In the aggregate, citizens need to be compensated by about one-half million dollars a year to allow wind electrical generation turbines in Watauga County. In addition, we find in a bivariate-probit analysis that individuals who are more likely to participate in a green energy program also are more likely to allow electrical generation wind mills in their view-shed suggesting that the green on green environmental debate is overstated.

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File URL: http://econ.appstate.edu/RePEc/pdf/wp0712.pdf
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Paper provided by Department of Economics, Appalachian State University in its series Working Papers with number 07-12.

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Date of creation: 2007
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Handle: RePEc:apl:wpaper:07-12
Contact details of provider: Postal: Thelma C. Raley Hall, Boone, North Carolina 28608
Phone: 828-262-2148
Fax: 828-262-6105
Web page: http://www.business.appstate.edu/departments/economics/

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  1. Kahn, Robert D., 2000. "Siting Struggles: The Unique Challenge of Permitting Renewable Energy Power Plants," The Electricity Journal, Elsevier, vol. 13(2), pages 21-33, March.
  2. Cameron, Trudy Ann, 1988. "A new paradigm for valuing non-market goods using referendum data: Maximum likelihood estimation by censored logistic regression," Journal of Environmental Economics and Management, Elsevier, vol. 15(3), pages 355-379, September.
  3. Kunreuther, Howard & Kleindorfer, Paul & Knez, Peter J. & Yaksick, Rudy, 1987. "A compensation mechanism for siting noxious facilities: Theory and experimental design," Journal of Environmental Economics and Management, Elsevier, vol. 14(4), pages 371-383, December.
  4. Ladenburg, Jacob & Dubgaard, Alex, 2007. "Willingness to pay for reduced visual disamenities from offshore wind farms in Denmark," Energy Policy, Elsevier, vol. 35(8), pages 4059-4071, August.
  5. Peter A. Groothuis & George Van Houtven & John C. Whitehead, 1998. "Using Contingent Valuation to Measure the Compensation Required to Gain Community Acceptance of a Lulu: the Case of a Hazardous Waste Disposal Facility," Public Finance Review, , vol. 26(3), pages 231-249, May.
  6. Charles Warren & Carolyn Lumsden & Simone O'Dowd & Richard Birnie, 2005. "'Green On Green': Public perceptions of wind power in Scotland and Ireland," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 48(6), pages 853-875.
  7. Richard Carson & Nicholas Flores & Norman Meade, 2001. "Contingent Valuation: Controversies and Evidence," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 19(2), pages 173-210, June.
  8. Steven Caudill & Peter Groothuis, 2004. "Modeling Hidden Alternatives in Random Utility Models: An Application to Don’t Know Responses in Contingent Valuation," Working Papers 04-07, Department of Economics, Appalachian State University.
  9. Peter A. Groothuis & John C. Whitehead, . "Does Don't Know Mean No? Analysis of 'Don't Know' Responses in Dichotomous Choice Contingent Valuation Questions," Working Papers 9814, East Carolina University, Department of Economics.
  10. John C. Whitehead & Todd L. Cherry, 2004. "Mitigating the Hypothetical Bias of Willingness to Pay: A Comparison of Ex-Ante and Ex-Post Approaches," Working Papers 04-21, Department of Economics, Appalachian State University.
  11. Whitehead, John C. & Cherry, Todd L., 2007. "Willingness to pay for a Green Energy program: A comparison of ex-ante and ex-post hypothetical bias mitigation approaches," Resource and Energy Economics, Elsevier, vol. 29(4), pages 247-261, November.
  12. Borchers, Allison M. & Duke, Joshua M. & Parsons, George R., 2007. "Does willingness to pay for green energy differ by source?," Energy Policy, Elsevier, vol. 35(6), pages 3327-3334, June.
  13. Roe, Brian & Teisl, Mario F. & Levy, Alan & Russell, Matthew, 2001. "US consumers' willingness to pay for green electricity," Energy Policy, Elsevier, vol. 29(11), pages 917-925, September.
  14. Trudy Ann Cameron & Michelle D. James, 1986. "Efficient Estimation Methods for "Closed-Ended" Contingent Valuation Surveys," UCLA Economics Working Papers 404, UCLA Department of Economics.
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