Lab Seminar: Gone with the Wind: Renewable Energy Infrastructure, Welfare, and Redistribution

Stanford University Hoover Fellow Milan Quentel, who will be joining Universidad Carlos III de Madrid as an assistant professor in 2026, visited the lab to present his work on the optimal siting of renewable electricity infrastucture. Renewable energy has enormous welfare potential, yet development around the world remains slow, in part because residents protest the amenity impacts of wind and solar parks. Using fine data from Germany and an instrumental variable strategy that exploits technology-induced changes in wind energy suitability, Milan infers residents' revealed preferences against wind turbines from observed changes in house prices, population, and income. He embeds the estimated preferences in a quantitative spatial general equilibrium model and uses it to evaluate Germany's renewable energy policy between 2000 and 2045. He finds that wind energy has large local costs that can be substantially reduced if policy-makers take residents' preferences into account. To show this, he provides an turbine allocation that saves 3 billion USD relative to a business-as-usual scenario and estimates budget-balanced transfers that allow policy-makers to compensate residents and incentivize turbine development.

 


 

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Secondary Categories

Environmental Economics