Stephen Jarvis Wins USAEE Young Professional Best Paper Award

October 5, 2020

Energy Institute Graduate Student Researcher, Stephen Jarvis, wins award with the United States Association for Energy Economics. USAEE’s Young Professional Best Paper Award, gives young energy economists in academia, industry, government, and other organizations an opportunity to compete and present their work to a panel of judges.

Title: “The Economic Costs of NIMBYism: Evidence from Renewable Energy Projects”

Overview: Large infrastructure projects can create widespread societal benefits and are often critical to tackling major national or global challenges. However, large infrastructure projects frequently prompt strong opposition from local residents and businesses. This is sometimes pejoratively labeled NIMBY (Not In My Backyard) behavior and is thought to be common in many settings, although the economic costs it imposes are poorly understood. In this paper I estimate the economic costs of so-called NIMBYism. To do this I examine the case of renewable energy in the United Kingdom where I am able to draw on detailed planning data for all renewable energy projects, including projects that were proposed but not approved. I first use hedonic methods to estimate how the construction of a wind or solar project is capitalized into local property values. I find that wind projects have significant negative local impacts whilst solar projects do not. I then quantify the weight that planning officials place on these local factors during the planning process and find evidence that they are indeed uniquely responsive to local property value impacts. This has resulted in societally beneficial projects being systematically refused, which may have contributed to increasing the cost of the UK’s deployment of wind power by as much as 12-36%. I conclude by discussing policy solutions and argue that whilst several existing remedies have helped tackle the issue at hand, they have so far been too small in scope.