An approach for analyzing the spatial welfare and distributional effects of ocean wind power siting: The Rhode Island/Massachusetts area of mutual interest

Abstract

Coastal and marine spatial planning (CMSP) involves characterizing the potential socioeconomic consequences of locating one or more human uses in place of others in the coastal ocean. Most commonly, the focus of CMSP is on the siting of alternative uses across ocean space. This article examines the broader economic and distributional effects of the potential siting of a renewable energy facility (wind power) in a southern New England offshore area that also is used intensively for commercial fishing. For a leading siting alternative, a counterfactual involving the complete displacement of commercial fishing would result in estimated direct output impacts to the regional economy of $5 million, leading to $11 million in direct, indirect, and induced impacts and a corresponding loss of about 150 jobs. Total economic welfare losses were estimated at $14 million, reflecting not only output reductions but also the effects of price increases in the relevant markets. The welfare losses would be progressively distributed, such that households in mid- to high-income categories would likely bear the most significant impacts. Adjusting these welfare losses for society׳s aversion to income inequality, inequality-adjusted impacts would be more pronounced in areas that are not necessarily located in close proximity to the coastline. Individual low-income households located in five non-coastal census tracts would bear estimated median impacts (≥$140/year), which would be an order of magnitude larger than those borne by the next group of impacted households. When implementing CMSP, it is critically important to characterize not only the distribution of effects over the coastal ocean but also the distribution of impacts on coupled human communities onshore, including those communities that may not be considered strictly coastal.