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Put It In My Back Yard - by William Baldwin

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    This SIDE LINES comment by William Baldwin, Forbes editor, appeared in the February 19, 2001 issue of Forbes. His suggested formula is the most concise and straight forward method I've seen on how to apply free market principles to the placement of public utilities such as power plants and garbage dumps. I believe this method would eliminate most of the "Not in my back yard" complaints and reduce the cost to taxpayers.
    -- 03/06/01

How will we ever reconcile our love of democracy with our love of progress? California desperately needs more power plants, but the neighbors might vote every single one of them down.

This country's zoning and environmental laws have left us with a rotten, lawyer-driven system for siting undesirable waste dumps and power plants. Plant builders have only clumsy ways to compensate a community for permitting a plant "hey, we'll pay for two new Little League fields and add $250 million to your property tax rolls" and no formula at all for fairly dividing up the spoils.

Here's a formula: e-d, where e is that number from math class and d is the distance from a given house to the nastiest part of the power plant. If someone living at the plant boundary gets a compensation check equal to 50% of his assessed valuation, and if d were measured in kilometers, then a homeowner another 750 yards away would get only 25%. At 2.4 miles, the bribe would shrink to 1%.

The vote on whether to let the plant in would be apportioned in the same way. If the worst-hit homeowners get 50 votes each, the folks 2.4 miles out get 1 vote each. The Sierra Club would get no vote.

What should the overall level of compensation be? Whatever it takes. If $100 million doesn't buy 51% of the votes, maybe $1 billion will do it, and let electricity be priced accordingly. Given any compensation pot, the formula will tell you what percentage of assessment a homeowner gets. There is nothing magical about kilometers, by the way; measure d in furlongs and the nearest neighbors will get a bigger slice of the pie. Whatever the apportionment formula, it should be etched into state law long before any plants are voted on.

There will be some birdwatchers for whom no amount of compensation is enough. They should cash their checks and move. A majority "yes" would tell us that the stinking plant is doing more good than harm. PIMBY!

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