The final miles of the one-hour drive west from Boston to Knowlton Farm in Grafton, Massachusetts, wind through a patchwork of landscapes: wooded, residential lots with 1950s-style ranch homes; treeless subdivisions dominated by brand-new McMansions; and the rolling meadows of the 162-acre Hennessy Conservation Area. At last, the farm’s old red dairy barn, with a small sign reading “Hay 4 Sale,” emerges along a wooded country road. 

In its heyday, this 334-acre family business was a dairy farm. But when the dairy’s profits began drying up in the late 1990s, the Knowlton family sold its herd and focused on producing hay. On this late August day, fourth-generation farm owner Paul Knowlton is baling hay in a field beyond the barn that’s bordered by woodlands. A broad-winged hawk drifts overhead. The sun scorches, but the crisp afternoon light and cricket chorus hint that fall is on its way. Knowlton rides a small green tractor, towing a mechanical harvester that pops up neat, rectangular bales, like a jack-in-the-box, as it slices through the hayfield. 

In a year or two, things will look different here. Knowlton Farm will produce not only hay, but berries, pumpkins, leafy greens, and grass-fed beef—all underneath 3.1 megawatts (MW) of “agrivoltaic” solar arrays built to allow for production of renewable energy and crops on the same land. The income from this newly installed solar project will allow Knowlton to hold on to the farm, which his family has owned since the 1800s; he’ll also be able to plant new crops, acquire a small head of cattle, and experiment with regenerative farming practices that can help improve soil health, restore ecosystems, and sequester carbon. The arrays are part of a community solar project growing here that will produce enough electricity to power about 520 homes. A smaller array powers the farm’s activities. 

One such array undulates across a two-acre field behind the farmhouse. Unlike conventional ground-mounted solar arrays that hug the earth, this agrivoltaic array towers nine feet high. Knowlton planted a cover crop of winter rye grass to prepare the field for spring planting, and Monarchs and other butterflies flit among the rye and scattered wildflowers that pop up beneath the rows of gleaming panels. The panels are spaced dozens of feet apart to allow farm equipment to pass between them. 

Agrivoltaic systems, also known as dual-use solar, have been successfully deployed in Japan and some European countries over the last decade. They are emerging in the United States as a potentially promising way for farmland to contribute to climate mitigation and resilience, while keeping farmers on their land at a time of fundamental disruption in agriculture. Meanwhile, in the drought-stricken West, climate-smart agricultural transition strategies are encouraging the installation of more conventional solar energy systems on farmland that must be taken out of production. 

Siting renewable energy on farmland isn’t a new concept in this country. In the wind-rich Plains states, wind development has helped prop up struggling farm economies for a decade, and a 2021 study by Cornell University found that 44 percent of existing utility-scale solar in New York State has been developed on agricultural land (Katkar et al. 2021). Farmland’s wide-open spaces are particularly well-suited for renewable energy development, and it’s generally easier to connect rural solar projects to the grid because there is greater transmission capacity available, in comparison to dense urban areas. Farmers benefit from the payments for leasing a portion of their land, which can make all the difference at a time of rising farm bankruptcies. 

Now, as renewable energy gains strength and world leaders commit to energy transition goals, new opportunities are emerging. Solar is booming in the United States as photovoltaic costs continue to drop. The industry grew at a clip of 42 percent annually over the past decade. As of 2020 it was valued at $25.3 billion, with more than 100 Gigawatts of solar now installed in the country. President Biden’s recent announcement of an economy-wide goal of net-zero emissions of greenhouse gases by 2050 ups the ante; Princeton University researchers estimate the net-zero goal will require the deployment of solar and wind energy on about 150 million acres, or land equivalent in size to Wyoming and Colorado (Larson et al. 2020). That could be a sizable chunk of U.S. farmland, which totaled nearly 900 million acres in 2020. At the same time, California’s Sustainable Groundwater Management Act is driving the retirement of 500,000 to 1 million acres of the Central Valley’s 5 million acres of irrigated farmland by 2040, as part of an effort to rebalance the state’s groundwater supplies. 

Investing in renewable energy on farmland could be a win for climate mitigation, conservation, and agriculture—for farmers and their local economies—but only if it’s done right, observers say. Dual-use solar represents “a potentially significant opportunity for agriculture and for rural America,” says David Haight, vice president of programs at American Farmland Trust, which is a third-party certifier for the Knowlton Farm project. “But it has to be done with farming in mind, and so that it doesn’t result in displacing farming across large parts of our landscape.” 

Haight says 90 percent of new solar capacity built by 2050 will be developed in rural areas. Solar on non-working farmland, meanwhile, can boost conservation goals by keeping farmers on their land. Well-managed farmland can provide a range of ecosystem services, from sequestering carbon to providing habitat for diverse native plant and animal species to buffering against floods, drought, and heat. 

Whether solar complements agricultural operations or replaces them on a portion of a farm, the associated revenue “can help financially struggling farmers sustain themselves through bad weather or tough economic times,” says Jim Holway, director of the Lincoln Institute’s Babbitt Center for Land and Water Policy. Revenue from renewables, he adds, can also provide funds for socially beneficial water efficiency improvements or other soil and land conservation investments. 

Dual-Use Solar in the Northeast 

Between 2001 and 2016, according to the American Farmland Trust, approximately 105,500 acres of New England’s 3.97 million acres of farmland were lost to or threatened by development. Roughly 35 percent was irrevocably lost to urban development, while the remaining acreage was impacted by low-density residential development, which ultimately changes the nature of rural communities. 

Climate change adds further pressure, as extreme downpours, flooding, and intermittent drought, among other impacts, make farming more challenging (see sidebar). “The future unknowns of how to maintain farm viability are getting larger, and that leads to a lot of uncertainty about farmland staying in farming,” says Emily Cole, New England deputy director at American Farmland Trust. 

Agriculture is responsible for roughly one-fifth of global greenhouse gas emissions, but efforts to shift to farming practices that sequester carbon in soil could help agriculture be part of the solution; the National Academy of Sciences estimates the carbon sequestration potential of U.S. agricultural soil at 276 million tons of carbon dioxide equivalent, or 4 percent of U.S. emissions. Once farmland leaves a farmer’s hands for permanent development, however, that’s no longer possible, says Cole. “There’s no more opportunity to improve soil health practices or garner clean energy.” 

Paul Knowlton knows these pressures firsthand. Grafton is ground zero for what Massachusetts Audubon calls “the Sprawl Frontier,” a belt of rapidly developing communities in central Massachusetts outside Worcester, New England’s second-largest city. Land prices are high, and aging farmers face increasing pressure to sell their land. Knowlton has been approached by developers and even works as a carpenter in residential construction to supplement his farming income. “Every time I go to work, I see a farm destroyed. I am part of the machine, and I don’t like it,” he laments. 

For a time after selling its herd, the Knowlton family made ends meet with the hay operation and income from other jobs. But when the farmhouse needed major renovation, the family carved off one housing lot and sold it to a developer. That’s when Knowlton decided there had to be another way. In 2015, he installed a 2.5 MW conventional solar array that stabilized the farm economically with its lease payments. That success got Knowlton thinking that maybe he could install more solar arrays, but in a way that would allow him to plant around them. Coincidentally, the solar developer that built his first array, BlueWave, was thinking the same thing. 

BlueWave was founded by John DeVillars, a former Massachusetts Secretary of Environment and regional EPA administrator who has strong connections to the conservation community. It was one of the first solar developers in the state to jump on the incentives that Massachusetts’ 2018 Solar Massachusetts Renewable Target (SMART) program provides for dual-use solar projects. 

“Our motivation is as much for land protection and supporting community and agriculture, as it is clean energy,” notes DeVillars. “Agrivoltaics is a great chance to strengthen rural communities . . . and allow everyone to share in the benefits of a cleaner environment and locally produced, healthier food.” 

The Knowlton Farm deal involves a slew of parties: AES, a global energy company that owns the project; the Massachusetts Department of Energy and Department of Agriculture; the University of Massachusetts, which will study the impact of the systems on the farm’s crop yields and soil conditions; American Farmland Trust; and a farm consultant, Iain Ward, who BlueWave recruited to help develop the planting plans and serve as an advisor to Knowlton. AES provides Knowlton with lease payments and a stipend to cover his farming costs, which will eventually allow him to retire from carpentry and achieve his lifelong dream of farming full-time. 

Not all dual-use solar developers pay stipends and hire farming consultants. Others simply pay the farmer to lease the land. “BlueWave’s model is progressive,” says Ward. “It’s farmer-first, farmer-friendly . . . the spirit of what I believe dual-use was intended to be.” 

Ward is a cranberry grower and an evangelist for regenerative agriculture who views dual-use solar as an opportunity to pay farmers to experiment with growing crops in new ways. He launched his own consulting business, Solar Agricultural Services, a few years ago. Decked in jeans and T-shirt, boots, and a brown sun hat, Ward shows a visitor Knowlton’s second, much larger dual-use array, located in a former pasture down the road from the hayfield. The panels in both arrays are bifacial, he says, meaning they allow some sunlight to penetrate their surface and reflect off the ground, which provides the crops more sunlight. The field under this 11.5-acre array will become pasture for beef cows in a year or two. Knowlton will plant mainly forage grasses, with some radishes and sugar pumpkins to support soil health. The field is now planted with a cover crop of winter rye grass. 

Knowlton is especially excited about the cows. “We haven’t had animals for so long,” he said wistfully, recalling how he used to milk the cows with his father and grandfather every weekend and every day after work. “I’m looking forward to getting back to that.” 

Ward hopes the results from Knowlton Farm will help inform a national conversation that could spur greater adoption of dual-use solar. Research to date has largely been conducted in experimental settings. A University of Arizona study on cherry tomatoes and two types of peppers found that the crops did better because they were spared direct sun. Jalapeño peppers lost less water via transpiration, suggesting that growing crops under PV panels can save water in a hot, dry climate (Barron-Gafford et al. 2019).  

Unpublished research from the University of Massachusetts similarly found that the solar panels helped reduce heat stress and contribute to higher yields for crops like broccoli, Swiss chard, kale, and peppers, though shade decreased yield in some crops (Sandler, Mupambi, and Jeranyami 2019). An analysis by researchers in Japan found certain types of agrivoltaic systems worked even with shade-intolerant crops like corn (Sekiyama and Nagashima 2019). 

Dual-use solar is likely best suited for smaller projects in regions where competition for land is stiff, because the economics are difficult without incentives, and a tremendous amount of oversight and technical assistance is required to ensure that farm management plans are sound. Construction costs for dual-use solar are roughly 40 percent higher than for conventional solar, says Drew Pierson, head of sustainability at BlueWave. Raised canopies increase both materials and labor costs. Insurance costs are also higher because of ongoing activity underneath the panels. 

Massachusetts leads the nation in dual-use solar because of its SMART program, which was designed to add 3,200 MW of solar to the grid. Under SMART, dual-use projects are eligible for a base compensation rate of $0.14–$0.26 per kWh of electricity produced, depending on the project size and local utility, and they receive an additional $0.06 per kWh federal incentive. To date, 11 projects, totaling 23 MW, have met the state’s rigorous eligibility requirements. (Even with the incentives, says De Villars, “the economics are very, very challenging, to say the least.”) 

New Jersey passed a similar incentive to Massachusetts last year. New York scores solar projects better if they have agrivoltaic features, but it’s unclear whether that will help incentivize projects or simply hasten their permitting, says Pierson. Agrivoltaics are also being developed for pollinator fields and rangeland in the Midwest and West. Meanwhile, researchers in California are studying whether solar installations could keep fallow farmland from disappearing altogether. 

Agriculture and Climate Change 

Agriculture and associated land use changes such as deforestation produced an estimated 17 percent of global greenhouse gas emissions in 2018, according to the Food and Agriculture Organization (FAO) of the United Nations. Factor in related activities such as packaging and processing, says the FAO, and the food system accounts for 34 percent of all emissions—a figure expected to rise as global population soars. Even as it contributes to climate change, agriculture is vulnerable to climate impacts: hotter temperatures, droughts, pests, and flooding are affecting crop yields, livestock conditions, and other critical elements of a functioning food supply. Regenerative practices that restore ecosystem health and sequester carbon, such as no-till methods and use of cover crops, are increasingly touted as a way for farmers to build resilience and be part of the climate solution. 

Solar on Farmland in the West 

In the West, water—or lack of it—is emerging as a key driver for renewable energy siting on farmland. Severe drought linked to climate change is shrinking water supplies just as population growth is increasing demand. With the federal declaration of drought in the Colorado River Basin in 2021, farmers in central Arizona face steep cuts in their allotment of river water. California and Colorado are similarly struggling to balance agricultural water use, rising urban water demands, and shrinking resources. 

“There’s always been this idea that the best soil is what determines the best agricultural land. We’re in a new paradigm here, and the best soil without water is dirt,” notes Lorelei Oviatt, director of planning for Kern County, California. 

In an effort to gain control of dwindling supplies, California passed the Sustainable Groundwater Management Act (SGMA) in 2014. One of the act’s key strategies is fallowing farmland. With farmland transitions on the table in California and other places in the drought-stricken West, the Babbitt Center for Land and Water Policy is researching sustainable futures for agriculture, and how to get from here to there, says Holway, the center’s director.  

Holway’s team is exploring how to facilitate voluntary transitions of agricultural land in a way that uses land markets, maintains agricultural economies, and keeps the most productive agriculture land in cultivation. The center is also investigating how to maximize ecosystem benefits and possibly sequester carbon on retired farmland. As part of this work, the Babbitt Center provided funding to the Public Policy Institute of California (PPIC) to investigate the potential for solar development in the San Joaquin Valley. 

That region, which occupies the southern part of the state’s famously productive Central Valley, has the largest groundwater deficit in California and faces some of the worst impacts from overdraft, including land subsidence and drying wells, according to Ellen Hanak, vice president and director of the PPIC Water Policy Center. PPIC estimates that 10 to 20 percent of the valley’s farmland—500,000 to 1 million acres—will need to be retired to comply with the SGMA. 

“If we don’t plan how that transition happens, it’s going to have a billion-dollar economic impact,” says Holway. Home foreclosures, bankruptcies, and supply chain disruptions are among the cascading impacts that could ensue from haphazard land fallowing. PPIC is studying how solar development can facilitate the necessary agricultural retirement in a way that sustains income for farmers. The research is part of a larger study on climate-smart agricultural transitions that is looking at the benefits and costs of different land management options. PPIC is also exploring issues such as the air quality risks that arise from the dust, pests, and weeds that build up from different types of land fallowing, and the potential for winter rain-fed cropping. 

“We’re working with folks to look at some alternatives that could bring in revenues and avoid negative externalities, but also potentially generate some benefits, like soil carbon [storage], soil moisture retention, and habitat [protection]. Solar comes into this as one of the options that looks especially promising,” notes Hanak.  

The Nature Conservancy (TNC) is also zeroing in on the San Joaquin Valley for renewable energy development. Its 2019 “Power of Place” report identified the San Joaquin as a promising location for the state to meet its renewable energy goals because it is more ecologically degraded than California’s inland deserts, where bighorn sheep, desert tortoises, and golden eagles still roam (Wu et al. 2019). California set a goal of reducing greenhouse gas emissions by 80 percent below 1990 levels by 2050. Additionally, it passed a law in 2018 requiring renewable energy resources to supply 100 percent of electricity by 2045.  

“TNC is obviously in favor of renewable energy development, but we’re very interested in rolling it out in ways that don’t harm existing habitat,” emphasizes Abigail Hart, project director in TNC’s California Water Program. “If you’re going to site renewable energy facilities on conservation land or agricultural land, then you need to make sure you’re doing it in places that aren’t critically important for some other reason like habitat,” confirms Jim Levitt, director of the International Land Conservation Network at the Lincoln Institute. “It’s important to be strategic.” 

Utility-scale solar is already underway in the San Joaquin Valley. Westlands Solar Park, one of the largest solar developments in the world, is under construction on 20,000 acres of former farmland that was contaminated with selenium in Fresno and King counties. The developer, CIM Group, plans to install at least 2,700 megawatts by the end of the decade, providing clean energy to more than 750,000 households. 

A smaller, 20 MW project was installed by E.ON Solar at Maricopa Orchards, a Kern County grower of almonds, oranges, and other crops. That project is part of a 6,000-acre habitat conservation plan devised by Maricopa Orchards and local officials; the plan allows solar development on 4,000 acres of farmland, but sets aside 2,000 acres as habitat for San Joaquin kit foxes, blunt-nosed leopard lizards, burrowing owls, and other at-risk species. “In some cases, land that has been out of production even for a couple of years can function as habitat for at-risk species,” explained Hart. The 2,000-acre set aside will allow for wildlife corridors on the property. The 20 MW array, which occupies 160 acres and is now owned by Dominion Energy of Virginia, is the first of multiple expected projects on the rest of the Maricopa parcel. Hart said that TNC looks to the deal “as a compelling example of how solar development could be done on impaired lands in a way that provides renewable energy and valuable habitat.”  

While wind and solar are high-value options for landowners, communities tend to question whether they provide “the same juice to the local economy” as housing or commercial development, says Hanak. Some communities, like San Bernardino County, have banned utility solar altogether. 

California’s solar tax exclusion, a statewide incentive passed in the early 2000s that prevents the installation of qualifying solar energy systems from affecting the assessment of a property, is one reason why communities fret the economics. It made sense for rooftop installations and smaller-scale projects, but does not work for today’s large-scale solar projects, observes Oviatt. Hanak agrees, noting that PPIC is investigating “the different ways to pay for solar so that it’s not coming at the expense of the coffers of a poor rural county.” 

There are other practicalities to consider. In Kern County, one of the largest in the valley, transmission capacity is a limiting factor, says Oviatt. Kern County has already developed 50,000 acres of solar, mostly on marginal lands. “We are now catching up with all of the solar that we have,” she says. Without additional transmission lines, farmers will not be able to sell their land to renewable energy developers. Kern County is therefore looking at other possible uses for retired agricultural land, including carbon capture and sequestration technologies.  

Path Forward 

Both dual-use and conventional solar development on farmland hold promise for helping individual states and the United States as a whole meet aggressive renewable energy goals. Solar on farmland cuts greenhouse gas emissions from the energy sector and, when done right, can help conserve land and protect biodiversity and water resources. Jeremy McDiarmid, vice president of the New England Clean Energy Council, points out that solar can be an impermanent development strategy, unlike housing or commercial real estate. What communities need to do, he says, is “find the balance between preserving open space and developing clean energy resources that are going to . . . create local jobs and help meet climate targets.” 

American Farmland Trust is crafting a set of principles to guide siting of renewable energy on farmland in a way that protects farmers and, where farmland is still active, improves viability and productivity. Those principles also recommend making full use of locations like brownfields, abandoned mines, and urban rooftops. “There are plenty of options out there with limited land impacts,” says Haight. “However, we’re also aware that we will not be able to site everything on brownfields and within the built environment.” 

Cole sees an opportunity for engaging in conversations state by state to identify where the best farmland is, what agricultural communities’ needs are, and what each state’s solar and land protection goals are to develop state-specific guidelines and programs. 

Such conversations are just beginning in California, Massachusetts, and New York. In California, the Strategic Growth Council, a state agency, is funding PPIC’s climate-smart agricultural transition and solar research to help plan the San Joaquin Valley’s future. In Massachusetts, the Department of Energy Resources is studying the solar potential for the Commonwealth and will likely layer in both technical feasibility and competing land uses for biodiversity and open space protections, according to McDiarmid. And in New York State, Cornell Professor Max Zhang said his recent study on strategic land use analysis for solar energy development precipitated a meeting with state senators (Katkar et al. 2021). 

Meanwhile, Levitt thinks the agricultural sector could see additional disruptions in the next few decades. Severe water shortages in arid and semi-arid landscapes are one potential driver of change. The traditional dairy and meat industries could also be increasingly displaced by alternative products such as nut milks and synthetic meats. Such disruption could free up a substantial amount of land for regenerative farming, renewables development, carbon sequestration, aquifer recharging, and wildlife protection, particularly in the swath of the middle of the country that’s now used for pasturing livestock and growing the crops that feed them.  

“Just as change in the pattern of land use in California is emerging, these trends could alter longstanding patterns of land use across North America,” says Levitt. While powerful industrial agriculture associations will do what it takes to minimize disruption—as will states where agriculture is integral to identity, culture, and economics—Levitt says the potential for dramatic change is there, and the forces driving change may well intensify over time. 

As dual-use systems get up and running on Knowlton Farm and elsewhere, questions remain about how scalable dual-use solar will be across different geographies and farm systems. Scaling up conventional solar on retired farmland is more straightforward, but will likely be limited by such factors as local transmission capacity or economic incentives. Regardless, solar energy development on both working and non-working farmland is an important tool for confronting the climate crisis. The faster the solar industry can perfect systems that keep farmers on their land and agricultural production intact—or optimized for water sustainability—the better humanity’s chances for preserving a livable planet. 

Meg Wilcox is an environmental journalist covering climate change, environmental health, and sustainable food systems. Her work has appeared in The Boston Globe, Scientific American, Next City, Smithsonian, Salon, Eater, Civil Eats, and other outlets. 

Lead image: Solar consultant Iain Ward stands among the agrivoltaic panels at Knowlton Farm in Grafton, Massachusetts. Credit: Meg Wilcox. 

References

Barron-Gafford, Greg A., Mitchell A. Pavao-Zuckerman, Rebecca L. Minor, Leland F. Sutter, Isaiah Barnett-Moreno, Daniel T. Blackett, Moses Thompson, Kirk Dimond, Andrea K. Gerlak, Gary P. Nabhan, and Jordan E. Macknick. 2019. “Agrivoltaics Provide Mutual Benefits Across the Food-Energy-Water Nexus in Drylands.” Nature Sustainability 2: 848–855. https://www.nature.com/articles/s41893-019-0364-5. 

Katkar, Venktesh V., Jeffrey A. Sward, Alex Worsley, and K. Max Zhang. 2021. “Strategic Land Use Analysis for Solar Energy Development in New York State.” Renewable Energy 173: 861–875. https://www.sciencedirect.com/science/article/abs/pii/S0960148121004900. 

Larson, Eric, Chris Greig, Jesse Jenkins, Erin Mayfield, Andrew Pascale, Chuan Zhang, Joshua Drossman, Robert Williams, Steve Pacala, and Robert Socolow. 2020. “Net-Zero America: Potential Pathways, Infrastructure, and Impacts.” Princeton, N.J.: Princeton University. December 15. https://netzeroamerica.princeton.edu/img/Princeton_NZA_Interim_Report_15_Dec_2020_FINAL.pdf. 

Sandler, Hilary, Giverson Mupambi, and Peter Jeranyama. 2019. “Expectations for Cranberry Growth and Productivity Under Solar (Photovoltaic) Panels.” East Wareham, MA: UMass Cranberry Station. May. https://ag.umass.edu/sites/ag.umass.edu/files/pdf-doc-ppt/shading_and_solar_panels_may_2019.pdf. 

Sekiyama, Takashi, and Akira Nagashima. 2019. “Solar Sharing for Both Food and Clean Energy Production: Performance of Agrivoltaic Systems for Corn, a Typical Shade-Intolerant Crop.” Environments 6(6): 65. https://doi.org/10.3390/environments6060065. 

Wu, Grace C., Emily Leslie, Douglas Allen, Oluwafemi Sawyerr, D. Richard Cameron, Erica Brand, Brian Cohen, Marcela Ochoa, and Arne Olson. 2019. “Power of Place: Land Conservation and Clean Energy Pathways for California.” Washington, DC: The Nature Conservancy. August. https://www.scienceforconservation.org/products/power-of-place. 

Editor’s Note: This article was adapted from “Investing for the Future,” published July 22, 2021. 
 
As governments consider major infrastructure proposals, the Lincoln Institute has published a new book that will help policy makers achieve a greater return on public investments. Edited by José A. Gómez-Ibáñez and Zhi Liu, Infrastructure Economics and Policy: International Perspectives includes contributions from 30 leading international academics and practitioners on topics such as project appraisal, financing, governance, climate change, and technology. 

The book comes out at a time when governments of many countries are considering infrastructure as a policy instrument to stimulate national economies that have been adversely affected by the COVID-19 pandemic. The book offers case studies, data, and analyses that can help governments evaluate infrastructure proposals. 

It includes the following six takeaways to consider in any infrastructure investment package, based on extensive research into the ingredients for success: 

Think Long-Term Growth, Not Quick Stimulus. Contrary to conventional wisdom, infrastructure investment is not an effective way to provide a quick economic stimulus. It takes many years to secure the permissions and funding necessary to begin construction on a new project, and the sophisticated equipment and training required by modern construction means such projects do not offer pathways to quick employment for large numbers of unskilled workers. Infrastructure Economics and Policy explains why infrastructure investments offer few short-term impacts, even when the long-term economic impacts are clearly positive. 

Shovel-Worthy Matters, Not Shovel-Ready. The impacts of infrastructure projects depend greatly on their quality. Many infrastructure agencies are required to prepare cost-benefit analyses of the major projects or policies they are considering and of the relevant alternatives to those projects. However, few governments (if any) require the agencies to adopt the alternative with the highest net benefit. This is often because of political considerations, including concerns that cost-benefit analysis might not adequately reflect the goals of fairness and equity. While cost-benefit analyses are not perfect, they are one of the best tools available for evaluating infrastructure proposals, and agencies should be cautious about departing significantly from the option with the highest net benefit without good reason. 

Beware of Over-Confidence and Over-Optimism. A landmark analysis of some 2,000 infrastructure projects found that actual costs were significantly higher than forecast, while usage was significantly lower, as Bent Flyvbjerg and Dirk W. Bester explore in a chapter of the book. The authors identify several well-known behavioral limitations that lead to these outcomes, particularly overconfidence bias and optimism bias. Fighting these biases is difficult because they are so deeply ingrained in human nature, but the book describes measures that can help, such as holding forecasters legally accountable or using independent audits. 

Take Equity Seriously. The costs and benefits of infrastructure projects are often distributed inequitably. On the one hand, major infrastructure facilities such as highways and power plants are often built in locations where the negative impacts are felt disproportionately by low-income residents and people of color. On the other hand, the lack of access to basic infrastructure, particularly in the developing world, impairs quality of life and contributes to inequality. Governments need to take both problems seriously and enact complementary policies to address them. 

Consider Governance Challenges. State and local governments have historically been deeply involved in regulating both private and government-owned infrastructure due to important concerns including access, siting, and protecting against monopolization. However, the advent of a major new infrastructure program—particularly one focused on decarbonizing the energy system to address climate change—will increase the role of the national government. National governments are uniquely positioned to invest in new technologies that require collective action, and to mitigate the economic impact of climate change policies—for example, compensating owners of fossil fuel plants and other assets that lose their value. These and other governance challenges related to infrastructure may prove even more difficult than the financial challenges that current debates focus on. 

Invest for the Future and Address Radical Uncertainties. In the face of radical uncertainties including climate change, the pandemic, automation, and the emerging sharing economy, governments must not only fix deteriorating infrastructure, but also invest in a new generation of infrastructure that is climate-resilient and takes advantage of new technologies. This transformation will require overcoming significant institutional barriers, assessing the pros and cons of the new technologies, and putting an effective change management process in place. 

Sustainably built infrastructure is indispensable to resilient, equitable, and livable communities and regions worldwide. Through in-depth analysis, Infrastructure Economics and Policy questions the conventional wisdom about several issues, from the most efficient levels of congestion charges on routes into city centers to the belief that privatization greatly affects the performance of infrastructure. With chapters covering land value capture and other funding mechanisms; the role of infrastructure in urban form, economic performance, and quality of life, especially for disinvested communities; and other essential concepts, this new book offers evidence-based solutions and policy considerations for officials in government agencies and private companies that oversee infrastructure services, for students, and for policy-oriented lay readers alike. 

To learn more or to order a copy of Infrastructure Economics and Policy, visit https://www.lincolninst.edu/publications/books/infrastructure-economics-policy.

Image Credit: shaunl via Getty Images.

En algún momento de los últimos años, fue como si hubiesen activado un interruptor: se hizo evidente que la revolución de la tecnología de vehículos eléctricos es real y podría tener una gran influencia sobre la planificación y el uso del suelo. Durante aproximadamente la última década, se ha puesto el foco de atención en cómo esta energía alternativa menos contaminante podría alimentar nuevos proyectos de vehículos autónomos y compartidos, o innovaciones de micromovilidad, como bicicletas o monopatines eléctricos. Pero los experimentos más esclarecedores sobre vehículos eléctricos que se están llevando a cabo hoy tienen que ver con el transporte público, como trenes, sistemas de tranvías y la categoría más humilde de todas: el autobús urbano.

Si bien China es, por lejos, líder mundial en construir y usar transporte público eléctrico debido a sus políticas industriales estatales y su plan de reducción del carbono, las ciudades de América Latina empiezan a ser importantes partícipes en este mercado emergente. Según una estimación, hacia fines de 2020 había más de 2.000 autobuses eléctricos circulando en, al menos, 10 países de América Latina. Se espera que esta cifra sea cada vez más alta: un análisis predice que hacia 2025 la región añadirá más de 5.000 autobuses eléctricos al año.

El motivo de la puja por los autobuses eléctricos reside en la necesidad imperiosa de reducir las emisiones de diésel que contaminan el aire y contribuyen al cambio climático. Es probable que la implementación generalizada genere un cambio importante, dado que, según informes, la cantidad de usuarios de transporte público per cápita en la región es la más alta del mundo.

Hace poco, la Corporación Financiera Internacional (IFC, por su sigla en inglés), una organización mundial de desarrollo que forma parte del Grupo del Banco Mundial y C40 (una coalición de acción climática) publicó un informe que destacó dos notables ejemplos de ciudades con grandes inversiones en autobuses eléctricos. Santiago, la capital de Chile, tiene una flota de más de 700 unidades y suma cada vez más. Es la mayor flota fuera de China. En comparación, en 2020 había unos 650 autobuses eléctricos en todo el territorio de los Estados Unidos, aunque parece haber un impulso político por generar inversiones en el sector. Santiago apunta a una flota con cero emisiones para 2035. En Colombia, Bogotá ha emprendido una labor ambiciosa para habilitar más de 1.000 autobuses electrónicos, vinculada con un plan mayor por recortar las emisiones de carbono en un 20 por ciento hacia 2030.

Ambas ciudades están usando innovadores acuerdos de financiamiento público y privado. Tal como destaca el informe de IFC/C40, casi todos los sistemas municipales de transporte público pertenecen a un organismo público o a un operador privado con algún tipo de concesión municipal. Pero los nuevos acuerdos “desagregan” la posesión y las operaciones: en esencia, usan los tipos de estrategias de alquiler conocidos, por ejemplo, en las aerolíneas comerciales, en las que un conjunto de empresas fabrica aviones y otro los alquila y los opera. “Los propietarios poseen y los operadores operan”, indicó el informe. 

Por ejemplo, en Bogotá, para entregar la flota de autobuses, Transmilenio, la entidad municipal de transporte público, hizo un acuerdo con Celsia Move, una subsidiaria del conglomerado multinacional Grupo Argus centrada en cuestiones energéticas. A su vez, Celsia Move firmó un convenio a 15 años con Grupo Express, una empresa aparte, para que esta operara la flota y se encargara del mantenimiento. John G. Graham, especialista de la industria para el grupo mundial de transporte de la IFC, explica que con esta desagregación cada entidad resulta atractiva para distintos conjuntos de inversionistas en potencia. Una entidad propietaria puede esperar pagos fijos, y sus activos se pueden poner en garantía; una operadora implica mucho menos riesgo de capital.

Los trenes y autobuses eléctricos requieren una inversión inicial mucho mayor que sus rivales de combustibles fósiles: se calcula el doble o más de costo. Pero, según se informa, estas recientes asociaciones público-privadas han motivado el compromiso de más de 15 inversionistas y fabricantes, que recaudaron unos US$ 1.000 millones para alimentar la incorporación de 3.000 autobuses eléctricos más en varias ciudades. El financiamiento internacional para respaldar a los autobuses electrónicos y otros proyectos ecológicos en toda la región provino de pesos pesados como el Banco Interamericano de Desarrollo y la iniciativa P4G (Partnering for Green Growth and the Global Goals 2030), cuyos fondos iniciales provinieron del gobierno danés.

Como destaca Graham, de la IFC, también evoluciona la rentabilidad subyacente. El mantenimiento de un autobús eléctrico puede abaratarse con el tiempo, lo cual significa que, a medida que las mejoras tecnológicas de las baterías reducen los costos iniciales, el llamado “costo total de propiedad” de la vida útil de un vehículo debería acercarse al de las alternativas con motores de combustión interna. 

Aun así, será esencial hallar fuentes sostenibles de respaldo, dado que no deja de ser difícil financiar proyectos de transporte importantes, como mejoras en la electrificación. Una opción puede ser el financiamiento basado en el suelo. En Costa Rica, por ejemplo, el Instituto Lincoln de Políticas de Suelo trabajó con gestores de políticas para explorar estas opciones de financiamiento y compensar el costo de US$ 1.500 millones de la expansión y la electrificación de una importante línea de tren que funciona en San José, la capital. Martim Smolka, miembro sénior del Instituto Lincoln y director del Programa para América Latina y el Caribe, indica que en toda la región se han usado estrategias de recuperación de plusvalías para ayudar a financiar proyectos importantes, como el redesarrollo de antiguas zonas fabriles e industriales. El modelo de recuperación de plusvalías procura que una parte del incremento del valor territorial ocasionado por las acciones municipales se devuelva al municipio para ayudar a compensar los costos de otros proyectos, como mejoras en la infraestructura local.

“El transporte ayuda a estructurar el valor territorial”, dice Smolka, pero recuperar ese valor puede ser más complicado que con un proyecto directo de redesarrollo, dada la escala de muchos de estos emprendimientos. Destaca que un enfoque efectivo es aumentar la densidad alrededor de estaciones particularmente ajetreadas. Para ello, sugiere fomentar desarrollos nuevos, pero exigiendo a los emprendedores que se benefician con la rezonificación que paguen por la oportunidad. Añade que en un estudio de impacto económico encargado por Costa Rica se observó que la expansión del tren eléctrico tendrá un impacto positivo en el valor territorial, y el proyecto encaja con una promesa por llegar a la neutralidad de carbono hacia 2050.

El transporte eléctrico sigue siendo apenas una gota en el mar del transporte público de América Latina, y la pandemia acarreó nuevas dificultades. No obstante, el mercado latinoamericano podría estar particularmente preparado para capitalizar y expandir esta tendencia. Smolka indica que la región es conocida por su buena predisposición ante las innovaciones en transporte, desde tranvías eléctricos en la década de 1950 hasta el autobús de tránsito veloz de hoy, los taxis de propano y las líneas de teleféricos que atienden a asentamientos informales densos ubicados en colinas. Con autoridades de transporte relativamente avanzadas y un historial de financiamiento de proyectos importantes, “tienen los mejores sistemas de transporte público en el mercado en desarrollo”, dice Graham.

Esto significa, entre otras cosas, una profusión de datos sobre rutas existentes que pueden ayudar a implementar nuevos autobuses eléctricos con eficiencia. Según Graham, es mucho más difícil “dar el salto” a un sistema eléctrico en un municipio con poco historial de transporte público que hacer un traspaso de tecnología en un sistema existente. Además, América Latina tiene una relación comercial cada vez más fuerte con China, que fabrica cerca del 98 por ciento de la flota mundial de autobuses eléctricos. Todo esto podría posicionar a la región como líder en una transición que, con el tiempo, ocurrirá en todo el planeta. Como dice Graham: “Se viene la electrificación”.

Rob Walker es periodista; escribe sobre diseño, tecnología y otros temas. Escribió The Art of Noticing (El arte de darse cuenta). Puede consultar su boletín en robwalker.substack.com.

Fotografía: Autobuses eléctricos en una estación de carga en Santiago, Chile. Crédito: Cortesía de C40 Knowledge Hub.

Contenido relacionado

Construir valor: En Brasil, la recuperación de plusvalías responde a las necesidades comunitarias

Movimientos en masa, resultados variados: Las ciudades de América Latina son líderes en tránsito urbano, pero ¿quién se beneficia?

Claudia López, mayor of Bogotá, Colombia, is confident the sprawling capital is ready to take action to confront climate change, despite the wearying effects of the pandemic and rising unemployment and poverty. 
 
“There is no doubt that I have a clear mandate from Bogotá’s people” to act on the environment, López said in an interview for the Land Matters podcast, while she was en route to the COP26 global climate summit in Glasgow, Scotland. “I think we have a deep social debt, and a deep environmental debt that we have to pay now.” 

The 51-year-old López, who was elected in October 2019 as the city’s first female mayor and also the first openly gay mayor, ran under Colombia’s Green Alliance party. Prior to her political career, she worked as a journalist and researcher, and brings a background in urban planning and public administration to the job. 
 
To reduce emissions, López seeks to stop expansion of the urban periphery into forests and rural land, and to make it easier to get around the city with public transit, including gondolas, powered by renewable energy. She also wants to overhaul waste management, which relies heavily on unsustainable landfills. 
 
At the same time, she says she remains committed to building equity and promoting economic opportunities for the metropolitan region’s 10 million residents, nearly half of whom live in informal settlements. Funding for urban amenities and social infrastructure, she says, can come from land value capture—harnessing some of the increased values associated with city-enabled urban development. That approach is part of a long tradition in Colombia; this year marks the centenary of the Colombian value capture tool, contribución de valorización or betterment contribution. 

“Basically, we agree what’s going to be the value that’s going to be generated by the transformation of land use and we agree with the developer” to help build “the infrastructure and the urban and social equipment that new development will need,” she said. 

“This is not about having lovely maps with marvelous plans,” she said. “This is actually what I think is urban planning—making sure that either through public investments or through land value capturing or through private investments, we ensure an equitable and sustainable share of the cost and benefits of building the city. That’s the role of the government, and that’s what we’re trying to achieve here.” 
 
One element of social infrastructure that López says could be transformative is providing support for an estimated 1.2 million women caregivers, essentially unpaid workers keeping families together. 

“Half of the economy is informal, half of the jobs are informal. They don’t have pension funds. They don’t have health insurance. They don’t have care when you are sick or when you are (older). Who does that? It’s the unpaid care women who do that … who don’t have jobs, don’t have education, don’t have time for themselves because they are caregivers of others,” she said. 
 
“We are reserving land for social infrastructure to provide care, institutionalized care, for children, for women, for elders, for people with disabilities, so that we can relieve and free time for women, so that they can access time to rest, first of all. They don’t have a free weekend ever in their life. (And) time to get education for themselves, care for themselves, and income generation opportunities.” 
 
Other interventions are aimed at making life less onerous in informal settlement, including some relief from strict building codes and other regulations designed for the formal city, so that homeowners can build a second floor or run a business out of the first floor. “For poor people, housing in not only the place they live, it’s also the place where they produce and they generate income,” she said. 
 
“We’re trying to balance. I think the development in Bogotá has been incredibly unbalanced. I mean, (much) of the advantage is on the developer side,” she said. “Of course, the developers need profitability … we are trying to find the equilibrium point.” 
 
López saluted the Lincoln Institute’s long-running Latin America program for prompting informed discussion of land use issues in the region. “There’s a huge network of people thinking, researching, innovating, putting out these debates, which is incredibly important,” she said. “I cannot tell you how important, how useful has been all the things that you taught me before throughout the years on land value capturing, for example, on land use development, on being aware of how land and urban value is created.” 

In this 75th anniversary year, the interview with López (also available as a Land Lines article) is the latest Q&A with chief executives in cities that share some history with the Lincoln Institute. Previous interviews feature the mayors of Cleveland, where founder John C. Lincoln got his start; Phoenix, where he founded the Lincoln Foundation 75 years ago; and Cambridge, site of the Lincoln Institute’s headquarters since 1974.  

You can listen to the show and subscribe to Land Matters on Apple Podcasts, Google Podcasts, Spotify, Stitcher, or wherever you listen to podcasts.
 

Further reading 

Profile of Claudia López Hernández, the Elected Mayoress of Bogotá 

The commitment of cities around the world UN News

Building Value: In Brazil, Land Value Capture Supports the Needs of the Community 

 
Anthony Flint is a senior fellow at the Lincoln Institute of Land Policy, host of the Land Matters  podcast, and a contributing editor of Land Lines. 

Image: Bogotá Mayor Claudia López. Credit: Mayor’s Office of Bogotá

Local governments around the world, no matter their size or capacity, have access to an effective land-based financing tool that can help create more climate-resilient, equitable, and sustainable cities and regions. That tool is land value capture, a policy approach that enables communities to recover and reinvest land value increases that result from public investment and other government actions. Land value capture is rooted in the notion that public action should generate public benefit—and while it is technically feasible to implement almost anywhere, it is often underutilized, says Enrique Silva, director of international initiatives at the Lincoln Institute, who deems it an “untapped source” of revenue. 

In late October, Silva hosted a Lincoln Institute dialogue with guests Barbara Scholz of the German Agency for International Cooperation (GIZ) and Rudiger Ahrend of the Organisation for Economic Cooperation and Development (OECD). The Lincoln Institute and the OECD, with contributions from GIZ, are creating a compendium to showcase the successful implementation of land value capture in 61 countries. The compendium, which will be published in 2022, will offer the first global overview of a policy approach that can fund critical infrastructure ranging from public transit to affordable housing.  

With an estimated $4 trillion needed each year to improve and expand global infrastructure, Scholz said, value capture “offers a huge repertoire of instruments” that can be customized based on local needs. It can improve the financial performance of subnational governments, facilitate access to affordable and secure land and housing, protect ecosystems, and foster equitable and climate-friendly urban development. Value capture can be especially helpful in developing countries and regions, said Scholz, noting that it has successfully been used in countries including Bangladesh, Namibia, and Ethiopia. GIZ works to promote and achieve sustainable development around the world, partnering with businesses, governments, and research organizations in more than 120 countries. 

The speakers noted challenges related to value capture, including a lack of shared vocabulary that can hamper conversations among policy leaders in different areas who are working toward the same goals. Developing a shared vocabulary “is one of the big opportunities of the compendium,” Ahrend said. “It will enable dialogues” that aren’t currently possible, he added. Noting that cities will absorb 2.5 billion more people by 2050, Scholz confirmed that GIZ hopes to use the compendium to foster dialogue about urban policies, value capture instruments, and country-specific challenges and opportunities, especially in places that are experiencing rapid growth and are vulnerable to the impacts of climate change. 

“These are tools that can be applied and built in contexts where governance institutions might not be as robust as in other countries,” Silva said. “The new compendium will help us open up opportunities to consider the extent to which land value capture can not only finance urban development, but also finance climate action and climate adaptation work. This conversation is ramping up.” 

The special 75th anniversary Lincoln Institute Dialogue series continues on December 8 with a discussion about sustainability in the U.S. West. Learn more about the Lincoln Institute’s 75th anniversary and related events.  

Katharine Wroth is the editor of Land Lines. 

Photo: Octavio Frias de Oliveira Bridge, São Paulo, Brazil. Credit: iStock/thiagogleite.