Bargaining a net gain compensation agreement between a marine renewable energy developer and a marine protected area manager

When the development of marine renewable energy (MRE) is only possible inside already established marine protected areas (MPAs), and there is a risk of ecosystem loss, environmental or monetary compensation -being the last step in a hierarchy of mitigation measures- might be an option for working out a trade-off between energy production and nature protection. In this article, it is argued that for this type of siting situation, instead of the well-established strategy of no net loss, a net gain should be provided from the MRE developer to the MPA manager, which acts as an incentive for the manager to cooperate and covers future potentially lost conservation benefits due to MRE potential damages. Based on this argument, a hypothetical example is used to demonstrate that a net gain is ensured only when there is a societal surplus from a combined MRE-MPA arrangement that can be divided between the players through bargaining. However, when asymmetric information is involved, it is shown that cooperative solution concepts are more sufficient for leaving both players better off after coexistence than before.