Reducing or fostering public opposition? A critical reflection on the neutrality of pan-European cost-benefit analysis in electricity transmission planning

The guidelines for Trans-European Energy Network planning foresee the application of a neutral pan-European transmission cost-benefit analysis (CBA) to facilitate the optimal expansion of the electricity transmission system. This CBA is to provide neutral cost-benefit information for the identification of the most profitable transmission projects and to help reduce public opposition by showing the objective costs and benefits of new projects. We review and discuss a wide range of literature related to the ontological, epistemological and economic theory foundations of CBA. Our analysis shows that the results of a CBA are based on several value-judgements linked to the standpoint of the analyst; the non-comparability of interpersonal utility; flawed data from willingness-to-pay/willingness-to-accept methods; the arbitrariness of social discount rates; and the status-quo bias of the Pareto efficiency and Kaldor-Hicks principles. Therefore, a pan-European transmission CBA cannot generate neutral information and will fail its core objective of providing unbiased information. The way it is designed, the CBA obscures different stakeholder perspectives and is biased towards a particular set of values. Hence, we expect it to increase, rather than to reduce, public opposition to power lines in Europe. We propose a participatory approach to alleviate some of the problems of the pan-European CBA.