Turning the Tide: Solving Offshore Wind's Gridlock Economy With Property and Liability Rules

Abstract

Offshore wind is key to combatting climate change. It also offers enormous economic potential for both developed and growing sectors of the economy and implicates national security concerns such as energy independence. But as offshore wind has taken off around the globe, its development in the United States has stagnated. Even carefully selected projects, such as the now-infamous Cape Wind, have failed or faced serious setbacks. Litigation over projects drives up costs and makes it even more difficult to keep projects profitable in an industry that already has high input costs.

Well-funded, local interest groups receive the most attention, much of it negative, as a source of this litigation. That attention may be warranted, but the problem is broader: a system of overlapping property interests in scarce ocean spaces has created gridlock and prevented offshore wind from taking hold. This problem is not new, and a variety of solutions ranging from regulatory reforms to more creative property proposals have been implemented in offshore wind and other contexts with varying degrees of success. Yet, offshore wind remains woefully underdeveloped.

This Note argues that a system of property and liability rules, often referred to as “The Cathedral Model,” could help solve the offshore wind’s gridlock problem. While property and liability rules may be unconventional, a tailored legal system can satisfy the two main competing interests at play in offshore wind development: incentivizing project development while making sure impacted communities are fairly compensated.