IDEAS home Printed from https://ideas.repec.org/p/cam/camdae/1432.html
   My bibliography  Save this paper

Sustainable Electricity Grid Development and the Public: An Economic Approach

Author

Listed:
  • Wenche Tobiasson
  • Tooraj Jamasb

Abstract

Increasingly, local opposition to new electricity grid development projects cause lengthy delays and places financial and practical strain on the projects. The structure of the electricity industry is in transition due to the emergence of smaller but more numerous electricity generation facilities. Also, the general public and local communities are increasingly active and engage with energy and environmental issues. Thus, the traditional decision making frameworks and processes are proving less effective in solving the present time conflicts between local communities and other stakeholders. This paper proposes an economic approach to resolve such conflicts. This paper discusses how compensation, benefit sharing, and property rights can play a role in reducing community opposition to new grid developments. We argue that these methods need to be part of an overarching societal strategy and policy towards environmental effects of grid development. We then propose that such impacts can be addressed within the framework of 'weak' versus 'strong' sustainability. Finally, we suggest that the concepts of 'collective negotiation' and 'menu of options' in regulatory economics can be adapted to operationalize this sustainability-based approach to community engagement with new grid projects

Suggested Citation

  • Wenche Tobiasson & Tooraj Jamasb, 2014. "Sustainable Electricity Grid Development and the Public: An Economic Approach," Cambridge Working Papers in Economics 1432, Faculty of Economics, University of Cambridge.
  • Handle: RePEc:cam:camdae:1432
    as

    Download full text from publisher

    File URL: http://www.econ.cam.ac.uk/research-files/repec/cam/pdf/cwpe1432.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Laffont, Jean-Jacques & Tirole, Jean, 1986. "Using Cost Observation to Regulate Firms," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 614-641, June.
    2. Aitken, Mhairi, 2010. "Wind power and community benefits: Challenges and opportunities," Energy Policy, Elsevier, vol. 38(10), pages 6066-6075, October.
    3. John Hartwick, 1977. "Intergenerational Equity and the Investment of Rents from Exhaustible Resources in a Two Sector Model," Working Paper 281, Economics Department, Queen's University.
    4. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    5. Joskow, Paul L., 2007. "Regulation of Natural Monopoly," Handbook of Law and Economics, in: A. Mitchell Polinsky & Steven Shavell (ed.), Handbook of Law and Economics, edition 1, volume 2, chapter 16, pages 1227-1348, Elsevier.
    6. Richards, Garrett & Noble, Bram & Belcher, Ken, 2012. "Barriers to renewable energy development: A case study of large-scale wind energy in Saskatchewan, Canada," Energy Policy, Elsevier, vol. 42(C), pages 691-698.
    7. Dietz, Simon & Neumayer, Eric, 2007. "Weak and strong sustainability in the SEEA: Concepts and measurement," Ecological Economics, Elsevier, vol. 61(4), pages 617-626, March.
    8. Kunreuther, Howard & Easterling, Douglas, 1990. "Are Risk-Benefit Tradeoffs Possible in Siting Hazardous Facilities?," American Economic Review, American Economic Association, vol. 80(2), pages 252-256, May.
    9. Hartwick, John M, 1977. "Intergenerational Equity and the Investing of Rents from Exhaustible Resources," American Economic Review, American Economic Association, vol. 67(5), pages 972-974, December.
    10. Grant Allan & Peter Mcgregor & Kim Swales, 2011. "The Importance of Revenue Sharing for the Local Economic Impacts of a Renewable Energy Project: A Social Accounting Matrix Approach," Regional Studies, Taylor & Francis Journals, vol. 45(9), pages 1171-1186, March.
    11. Doucet, J. & Littlechild, S., 2006. "Negotiated Settlements: The development of economic and legal thinking," Cambridge Working Papers in Economics 0622, Faculty of Economics, University of Cambridge.
    12. Jamasb, T. & Pollitt, M., 2000. "Benchmarking and regulation: international electricity experience," Utilities Policy, Elsevier, vol. 9(3), pages 107-130, September.
    13. Steve Gibbons, 2014. "Gone with the wind," CentrePiece - The magazine for economic performance 433, Centre for Economic Performance, LSE.
    14. Jobert, Arthur & Laborgne, Pia & Mimler, Solveig, 2007. "Local acceptance of wind energy: Factors of success identified in French and German case studies," Energy Policy, Elsevier, vol. 35(5), pages 2751-2760, May.
    15. Doucet, Joseph & Littlechild, Stephen, 2006. "Negotiated settlements: The development of legal and economic thinking," Utilities Policy, Elsevier, vol. 14(4), pages 266-277, December.
    16. Gibbons, Stephen, 2015. "Gone with the wind: Valuing the visual impacts of wind turbines through house prices," Journal of Environmental Economics and Management, Elsevier, vol. 72(C), pages 177-196.
    17. Frey, Bruno S & Oberholzer-Gee, Felix, 1997. "The Cost of Price Incentives: An Empirical Analysis of Motivation Crowding-Out," American Economic Review, American Economic Association, vol. 87(4), pages 746-755, September.
    18. William Easterly & Luis Servén, 2003. "The Limits of Stabilization : Infrastructure, Public Deficits, and Growth in Latin America," World Bank Publications - Books, The World Bank Group, number 14456, December.
    19. Felix Oberholzer-Gee & Bruno S. Frey & Albert Hart & Werner W. Pommerehne, 1995. "Panik, Protest und Paralyse Eine empirische Untersuchung über nukleare Endlager in der Schweiz," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 131(II), pages 147-177, June.
    20. Horowitz, John K. & McConnell, Kenneth E., 2002. "A Review of WTA/WTP Studies," Journal of Environmental Economics and Management, Elsevier, vol. 44(3), pages 426-447, November.
    21. North, Douglass C, 1994. "Economic Performance through Time," American Economic Review, American Economic Association, vol. 84(3), pages 359-368, June.
    22. Robert U. Ayres & Jeroen C.J.M. van den Bergh & John M. Gowdy, 1998. "Viewpoint: Weak versus Strong Sustainability," Tinbergen Institute Discussion Papers 98-103/3, Tinbergen Institute.
    23. Howard Kunreuther & Doug Easterling, 1996. "The role of compensation in siting hazardous facilities," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 15(4), pages 601-622.
    24. Ciupuliga, A.R. & Cuppen, E., 2013. "The role of dialogue in fostering acceptance of transmission lines: the case of a France–Spain interconnection project," Energy Policy, Elsevier, vol. 60(C), pages 224-233.
    25. Painuly, J.P, 2001. "Barriers to renewable energy penetration; a framework for analysis," Renewable Energy, Elsevier, vol. 24(1), pages 73-89.
    26. Wolsink, Maarten, 2000. "Wind power and the NIMBY-myth: institutional capacity and the limited significance of public support," Renewable Energy, Elsevier, vol. 21(1), pages 49-64.
    27. Jeffrey H. Dyer & Wujin Chu, 2003. "The Role of Trustworthiness in Reducing Transaction Costs and Improving Performance: Empirical Evidence from the United States, Japan, and Korea," Organization Science, INFORMS, vol. 14(1), pages 57-68, February.
    28. Cohen, Jed J. & Reichl, Johannes & Schmidthaler, Michael, 2014. "Re-focussing research efforts on the public acceptance of energy infrastructure: A critical review," Energy, Elsevier, vol. 76(C), pages 4-9.
    29. Arild Vatn, 2005. "Institutions and the Environment," Books, Edward Elgar Publishing, number 2826, May.
    30. Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, December.
    31. Crew, Michael A & Kleindorfer, Paul R, 1996. "Incentive Regulation in the United Kingdom and the United States: Some Lessons," Journal of Regulatory Economics, Springer, vol. 9(3), pages 211-225, May.
    32. Frey, Bruno S & Oberholzer-Gee, Felix & Eichenberger, Reiner, 1996. "The Old Lady Visits Your Backyard: A Tale of Morals and Markets," Journal of Political Economy, University of Chicago Press, vol. 104(6), pages 1297-1313, December.
    33. Devine-Wright, Patrick & Devine-Wright, Hannah & Sherry-Brennan, Fionnguala, 2010. "Visible technologies, invisible organisations: An empirical study of public beliefs about electricity supply networks," Energy Policy, Elsevier, vol. 38(8), pages 4127-4134, August.
    34. Matthew Cotton & Patrick Devine-Wright, 2013. "Putting pylons into place: a UK case study of public perspectives on the impacts of high voltage overhead transmission lines," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 56(8), pages 1225-1245, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wenche Tobiasson & Christina Beestermöller & Tooraj Jamasb, 2016. "Public engagement in electricity network development: the case of the Beauly–Denny project in Scotland," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 43(2), pages 105-126, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zerrahn, Alexander, 2017. "Wind Power and Externalities," Ecological Economics, Elsevier, vol. 141(C), pages 245-260.
    2. Simora, Michael & Frondel, Manuel & Vance, Colin, 2020. "Do financial incentives increase the acceptance of power lines? Evidence from Germany," Regional Science and Urban Economics, Elsevier, vol. 85(C).
    3. Langer, Katharina & Decker, Thomas & Roosen, Jutta & Menrad, Klaus, 2016. "A qualitative analysis to understand the acceptance of wind energy in Bavaria," Renewable and Sustainable Energy Reviews, Elsevier, vol. 64(C), pages 248-259.
    4. Maria De Salvo & Sandra Notaro & Giuseppe Cucuzza & Laura Giuffrida & Giovanni Signorello, 2021. "Protecting the Local Landscape or Reducing Greenhouse Gas Emissions? A Study on Social Acceptance and Preferences towards the Installation of a Wind Farm," Sustainability, MDPI, vol. 13(22), pages 1-19, November.
    5. Campbell, Alrick, 2018. "Cap prices or cap revenues? The dilemma of electric utility networks," Energy Economics, Elsevier, vol. 74(C), pages 802-812.
    6. John Colton & Kenneth Corscadden & Stewart Fast & Monica Gattinger & Joel Gehman & Martha Hall Findlay & Dylan Morgan & Judith Sayers & Jennifer Winter & Adonis Yatchew, 2016. "Energy Projects, Social Licence, Public Acceptance and Regulatory Systems in Canada: A White Paper," SPP Research Papers, The School of Public Policy, University of Calgary, vol. 9(20), May.
    7. Simora, Michael, 2017. "The effect of financial compensation on the acceptance of power lines: Evidence from a randomized discrete choice experiment in Germany," Ruhr Economic Papers 729, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    8. Simón, Xavier & Copena, Damián & Montero, María, 2019. "Strong wind development with no community participation. The case of Galicia (1995–2009)," Energy Policy, Elsevier, vol. 133(C).
    9. Havyatt, David, 2022. "Toward consumer-centric energy network regulation: Australia's experience," Utilities Policy, Elsevier, vol. 78(C).
    10. Sharpton, Tara & Lawrence, Thomas & Hall, Margeret, 2020. "Drivers and barriers to public acceptance of future energy sources and grid expansion in the United States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 126(C).
    11. Friedl, Christina & Reichl, Johannes, 2016. "Realizing energy infrastructure projects – A qualitative empirical analysis of local practices to address social acceptance," Energy Policy, Elsevier, vol. 89(C), pages 184-193.
    12. Simora, Michael & Frondel, Manuel & Vance, Colin, 2018. "Does financial compensation increase the acceptance of power lines? Evidence from Germany," Ruhr Economic Papers 742, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    13. Ioannidis, Romanos & Koutsoyiannis, Demetris, 2020. "A review of land use, visibility and public perception of renewable energy in the context of landscape impact," Applied Energy, Elsevier, vol. 276(C).
    14. Joalland, Olivier & Pereau, Jean-Christophe & Rambonilaza, Tina, 2019. "Bargaining local compensation payments for the installation of new power transmission lines," Energy Economics, Elsevier, vol. 80(C), pages 75-85.
    15. Alan Randall, 2022. "Driving with Eyes on the Rear-View Mirror—Why Weak Sustainability Is Not Enough," Sustainability, MDPI, vol. 14(16), pages 1-13, August.
    16. Zerrahn, Alexander & Krekel, Christian, 2015. "Sowing the Wind and Reaping the Whirlwind? The Effect of Wind Turbines on Residential Well-Being," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112956, Verein für Socialpolitik / German Economic Association.
    17. Richard Benjamin & Jeffrey Wagner, 2006. "Reconsidering the law and economics of low-level radioactive waste management," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 8(1), pages 33-53, December.
    18. Olivier JOALLAND & Tina RAMBONILAZA, 2017. "Assessing the impact of renewable energy infrastructure on the “tourist value” in rural landscapes: a spatial hedonic approach," Cahiers du GREThA (2007-2019) 2017-10, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    19. Martin, Nigel & Rice, John, 2015. "Improving Australia's renewable energy project policy and planning: A multiple stakeholder analysis," Energy Policy, Elsevier, vol. 84(C), pages 128-141.
    20. Tooraj Jamasb & Paul Nillesen & Michael Pollitt, 2003. "Strategic behaviour under regulation benchmarking," Working Papers EP19, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.

    More about this item

    Keywords

    Electricity transmission; Social sustainability; public and local opposition; compensation and benefit sharing.;
    All these keywords.

    JEL classification:

    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cam:camdae:1432. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jake Dyer (email available below). General contact details of provider: https://www.econ.cam.ac.uk/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.