Economic and environmental implications of hydropower concession renewals: A case study in Southern France

Federico Pontoni, Anna Creti and Marc Joëts
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Federico Pontoni: IEFE - Center for Research on Energy and Environmental Economics and Policy (University Luigi Bocconi of Milan)
Anna Creti: LEDa - Laboratoire d'Economie de Dauphine - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres

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Abstract: In the coming years, a consistent number of French hydropower concessions will be re-assigned through a competitive public procedure, in which bidders will submit an environmental offer and an economic one. This procedure is likely to generate a trade-off between monetary transfers and environmental pledges. In particular, we expect bidders to couple higher monetary compensation to local authorities with lower mitigation measures and vice-versa. This paper aims at investigating the reasons under which local authorities would prefer either environmental protection or monetary transfers. Through an innovative discrete choice experiment (DCE) carried out in the Aspe valley, where more than 100 MW of hydro capacity is installed, we translate monetary offers into immediate rebates on the electricity bill and we test whether local respondents prefer higher rebates or stronger environmental improvements. From a methodological perspective, we calculate our results both with the standard preference space approach and with the WTP space approach. According to our results, locals value considerably more environmental pledges than monetary offers; hence, we argue that bidders should give clear priority to environmental mitigation measures.

Keywords: Hydroélectricité; Water framework directive; Choice experiment; Hydropower; Directive-cadre sur l'eau; Modèle de choix discret (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (1)

Published in Revue Economique, 2018, 69 (2), ⟨10.3917/reco.pr2.0116⟩

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Journal Article: Economic and Environmental Implications of Hydropower Concession Renewals: A Case Study in Southern France (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02302550

DOI: 10.3917/reco.pr2.0116

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