Wind Power Compensation is not for the Birds: An Opinion from an Environmental Economist

Abstract

This article advocates for better implementation of the Environmental Impact Assessment (EIA) framework as applied to wind power development, with a particular focus on improving compensatory restoration scaling. If properly enforced, the environmental impacts hierarchy "avoid -minimize -compensate" provides the regulated community with incentives to prevent wildlife and habitat impacts in sensitive areas and, if necessary, compensate for residual impacts through restoration or conservation projects. Given the increase in legislation requiring resource-based environmental compensation, methods for scaling an appropriate quantity and quality of resources is of increasing relevance. I argue that Equivalency Analysis (EA) represents a transparent and quantitative approach for scaling compensation in the case of wind power development. Herein, I identify the economic underpinnings of environmental compensation legislation and identify weaknesses in current scaling approaches within wind power development. I demonstrate how the recently-completed REMEDE Toolkit, which provides guidance on EA, can inform an improved scaling approach and summarize a case study involving raptor collisions with turbines that illustrates the EA approach. Finally, I stress the need for further contributions from the field of restoration ecology. The success of ex ante compensation in internalizing the environmental costs of wind development depends on the effective implementation of the environmental impacts hierarchy, which must effectively encourage avoidance and minimization over environmental restoration and repair.

Mortality at wind-farms is positively related to large-scale distribution and aggregation in griffon vultures

“…These declarations identify additional measures to mitigate and compensate potential negative environmental consequences and other conditions that should be met by the project developer such as the monitoring of the environmental impacts. If properly enforced, the environmental impacts hierarchy ''avoid-minimize-compensate'' would provide the regulated community with incentives to prevent wildlife and habitat impacts in sensitive areas and, if necessary, compensate for residual impacts through restoration or conservation projects (Cole, 2011). In Spain, wind-farm planning is competency of regional governments.…”

Equity over efficiency: a problem of credibility in scaling resource-based compensation?

“…Compensation has been driven by ex post legal obligations to clean up and repair de facto environmental injuries, although it is increasingly required (or suggested) ex ante to offset anticipated injuries from ventures like infrastructure projects (EC 2011;Cole 2011). The ex post scenarios in the US are driven by the Natural Resource Damage Assessment (NRDA) regulations while in the EU they are driven by the Environmental Liability Directive (ELD) (EU Directive 2004/35/EC;Brans 2008).…”

Compensating white‐tailed eagle mortality at the Smøla wind‐power plant using electrocution prevention measures

“…Because utility is not directly observable, proxies are often used, such as income or consumption of goods and services, including ecosystem services. In short, most compensation projects fail to acknowledge the anthropocentric assumptions behind compensatory requirements (Cole and Kriström 2008, Cole 2011).…”

“…Rather than explicitly calculating and aggregating individuals' monetary measures of utility changes via a social welfare function (Johansson 1998), the Resource Equivalency Analysis framework relies instead on a non‐monetary ecological metric—this study uses a bird‐year—as a proxy for proportional and linear changes in society's overall welfare (Johansson 1991, Zafonte and Hampton 2007, Cole 2011). Consistent with welfare economics, Resource Equivalency Analysis adjusts the future value of the (proxied) utility changes downward using a discount rate to reflect society's assumed positive time preference (i.e., a bird‐year in the future is assumed to be worth less than a bird‐year today, all else being equal).…”