Vortrag
Does the Presence of Wind Turbines Have Negative Externalities for People in Their Surroundings? Evidence from Well-Being Data

Christian Krekel, Alexander Zerrahn

22nd Annual Conference of the European Association of Environmental and Resource Economists : EAERE 2016
Zürich, Schweiz, 22.06.2016 - 25.06.2016



Abstract:
Throughout the world, governments foster the deployment of wind power. The economic rationale behind these policies is to reduce negative externalities of conventional technologies, most notably CO2 emissions. Wind turbines, however, are not free of externalities themselves, particularly interference with landscape aesthetics. We quantify the negative externalities associated with the presence of wind turbines using the life satisfaction approach. To this end, we combine household data from the German Socio-Economic Panel (SOEP) with a novel panel dataset on over 20,000 installations. Based on geographical coordinates and construction dates, we establish causality in a difference-in-differences design. Matching techniques drawing on exogenous weather data and geographical locations of residence ensure common trend behaviour. We show that the construction of wind turbines close to households exerts significant negative external effects on residential well-being, although both temporally and spatially limited. Their monetary valuation is, however, several magnitudes lower than the avoided externalities from CO2 emissions.