Siting Energy Facilities

It doesn't seem to matter whether we are talking about energy from fossil fuels or renewable sources, there is strong opposition to proposed generating facilities.  The Cape Wind project, a large wind energy facility proposed for the waters off Martha's Vineyard, has been the target of fierce opposition from well-known and well-heeled political opponents. Terrestrial wind projects planned for high ridges in the mountains of New England and in the plains of the western states have been challenged on aesthetic and environmental grounds. Large solar energy plants have been blocked all over California.   The same arguments used to contest the building of coal- and gas-fired power plants all over the world, are now being used to haltthe  construction of renewable energy facilities:  they will have unacceptable environmental and aesthetic impacts;they will unfairly reduce property values; they will preclude other more desirable land uses, and they will cost too much. 

The people likely to benefit substantially from new facilities -- either because they will be employed in some supporting or related industry or reap a direct financial return as an investor -- are usually small in number compared to those who will be (or think they will be) adversely affected.  So, even if the "gains to all the gainers" are sure to outweigh "the losses to all the losers," those who fear large or serious losses will find each other and take whatever actions they can to block new projects. It doesn't matter whether they are renewable energy projects or coal-fired power plants.  The much larger number of beneficiaries who stand to gain (perhaps just a little over a long period) won't be as motivated to advocate for the facility. Thus, regulators are much more likely to hear from impassioned opponents than they are to here from potential beneficiaries.

Our regulatory system requires all kinds of environmental impact assessments, risk assessments and cost-benefit analyses.  These make it easy to document potential costs and possible adverse impacts -- no matter how small or uncertain.  But, they almost always pay insufficient attention to possible benefits because they are much harder to measure, especially over long periods of time. 

A consensus building approach to energy facility siting needs to focus on four things.  First, public policy with regard to the need for more energy (or energy of certain kinds) ought to be the product of an extensive public dialogue.  How will our city, region, state and nation meet its energy needs over the next several decades?  Picture two pie charts. The first summarizes current demand for energy (with wedges showing all the different ways we use it).  The second summarizes existing supplies(with wedges showing the different sources in proportion to each other). Then, think of the new version of each pie chart that the public wants to achieve by a specific point in time. We need public agreement on these four charts. The only way to get that is through public educational efforts involving joint fact finding.

Then, when a decision has to be made about a specific new technology (in a particular location), representatives of all relevant stakeholders (i.e. all groups of potential gainers and losers) need to be assembled (by the relevant regulatory agencies) to seek consensus on the best way of proceeding. It will difficult, in some instances to find effective spokespeople of some of the potential losers and beneficiaries, but the government has to make sure these interests are represented.  In many instances, such ad hoc groups can come up with creative promises, environmental guarantees (or trades)  and compensatory arrangements that maximize benefits, minimize losses and tax specific gainers to compensate specific losers. While these will only be proposals (not legally enforceable requirements), proponents of new facilities are eager to know how they can proceed in a way that will earn wide-spread support.  Regulatory bodies will gladly accept voluntary commitments from facility proponents that go well beyond what the government has a right to require -- and they will agree to enforce them -- as long as they are the product of transparent public dialogue at which all interests are represented.

Both the policy dialogues on future supply and demand targets and the negotiations over the siting of specific facilities in precise locations need to be facilitated by specially-trained environmental mediators.  These dialogues can accommodate large numbers of participants in multiple problem-solving sessions (not one-time hearings). They can even be televised to ensure accountability to the larger constituencies involved. 

For more on how this works see Susskind and Cruikshank, Breaking the Impasse (Basic Books, 1987), Susskind et. al, Negotiating Environmental Agreements (Island Press, 1999), and "A Negotiation Credo for Controversial Siting Disputes," (Negotiation Journal, October 1990, pp. 309-314).  For evidence of how the Credo has worked see Howard Kunreuther, Kevin Fitzgerald and Thomas Aarts, "Siting Noxious Facilities: A Test of the Facility Siting Credo," Risk Analysis, Volume 13, Issue 3, pp. 301-318.