NIMBY may also cause a misallocation of investment on renewable energy projects, such as wind power

NIMBY may also cause a misallocation of investment on renewable energy projects, such as wind power

Infrastructure  |  Sustainability  |  Business

A phenomenology of the ‘NIMBY’ syndrome and some of its best remedies

It goes well beyond just an acronym and raises similar “symptoms'', in many cases all around the world. Nevertheless, one fact is sure: bypassing local communities to develop much-needed infrastructures is wrong

In 2019 Duke University blocked a US$ 3.3 billion light rail project in Durham, NC, that would have reduced traffic congestion and pollution, claiming the line would have exposed its hospital to electromagnetic and electronic interference and construction vibration. Earlier this year, the British city of York failed to approve a project to demolish a Mecca bingo hall and replace it with student housing. In Italy, the average permitting time for wind turbines ranges between five and eight years: despite the skyrocketing energy prices in 2022, the government had to override local vetoes in order to start the construction of long-awaited renewable generators. 

What do these stories have in common? Despite the obvious differences in the socio-political circumstances as well as in the nature of the projects being challenged, they highlight the growing difficulties in developing much-needed infrastructures. Quite often these are opposed by local residents who fear that the new projects might result in negative spill-overs on their lifestyle; other times the challenge comes from vested interests that might be damaged by the proposed developments.
In many cases, though, the opposition is more vocal and politically active than the supporters and it succeeds in killing potentially valuable developments, regardless of whether or not they might result in net benefits to the local communities and/or the entire country. Even more so, these fears often rely on fragile grounds, such as unjustified fears or, more basically, the failure to understand how high security standards are nowadays. 

This phenomenon is popularly known as NIMBY, which stands for “not in my backyard”, but other, more quaint expression are also used: CAVE (“citizens against virtually everything”) and BANANA (“build absolutely nothing anywhere near anything”) perhaps are the more colorful. While NIMBY tends to be a grassroot movement, consensus-oriented politicians are likely to follow, either by conviction, or by opportunism, as they see an opportunity to trade the support for a cause against ballot votes. In this case the acronym NIMTO, i.e. “not in my term of office”, is employed. 

The problem of NIMBY may be better understood if it is analyzed under three dimensions. From a political perspective, NIMBYISM may be seen as a source of democratic legitimacy. Is there anything more democratic than the common people standing up for a cause? At the same time, people mobilizing against public works are usually a minority, if not a tiny minority. Concentrated interests are always more vocal than diffused ones, but they do not necessarily have a greater right to see their stake upheld. From an economic perspective, infrastructures may or may not deliver benefits to the community: adequate cost-benefit analyses should be performed, even though a considerable amount of uncertainty should be allowed for. But NIMBY-ers quite rarely care about what cost-benefit analyses say, unless they are consistent with their own prejudices. Finally, from a public opinion point of view, if an infrastructure has clear benefits but still many mobilize against it under the belief that it will ultimately inflict economic or environmental damage, then the opinion-makers and the infrastructure proponents should ask themselves what can be done to achieve a more effective communication. 

The paradox of NIMBYism is that the more it becomes widespread, the more it increases the cost of public works – therefore nudging the cost-benefit balance towards more costs. A study on the consequences of NIMBYims on renewable energy projects, particularly wind power, showed that it causes “a systematic misallocation of investment, which may have increased the cost of deploying wind power by 10-29%”. In the case of energy this is particularly worrisome, because it may make carbon neutrality harder to achieve and, on top, it may even hinder Europe’s attempts to substitute Russian gas and achieve a reasonable degree of energy security. 

NIMBYism also feeds itself by leveraging on the role of local governments in the licensing processes for large energy infrastructures, rail lines, roads, etc. It seems obvious to infer that, to overcome NIMBY, local communities should be bypassed. As it often happens, this is the quintessential solution that, beyond being neat and simple, is also wrong.

Citizen involvement is not the root of NIMBYims; in fact it may be the cure to it. The best practices in infrastructure management revolve all around forms of people involvement, by speaking the truth and promoting honest information about the public works’ goals, procedures, benefits – but also costs, both in the construction phase and in the long term. Also economic compensations may play a role, but first and foremost people must feel they are being considered and they should also see that objections are taken into consideration and, if unfounded, proven wrong. At the end of the day, infrastructure does have an impact on the common people’s everyday life: informing them about the future developments, explaining their rationale, and compensating for the potential damages are the only sensible tools to turn NIMBYism into rational acceptance and participation.

Carlo Stagnaro - He is research and studies director of the Bruno Leoni Institute. Previously he was Head of the Minister's Technical Secretariat at the Ministry of Economic Development. He graduated in Environmental and Territorial Engineering from the University of Genoa and a PhD in Economics, Markets, Institutions from IMT Alti Studi - Lucca. He is part of the editorial staff of the magazines Energia and Aspenia and is a member of the Academic Advisory Council of the Institute of Economic Affairs. He is an economic columnist for the newspapers Il Foglio and Il Secolo XIX. His latest book, co-written with Alberto Saravalle, is "Moltre riforme per nulla" (Marsilio, 2022).

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