Evaluating the External Effect of Wind Power Development on Grassland Quality

This study uses a difference - in-differences approach to investigate the ef-fect of county wind power development on grassland quality in China. We find robust evidence that increasing wind power capac-ity density by 0.02 megawatt/km2 leads to a 0.5% reduction in the normalized difference vegetation index from its mean value. Ex-cluding economic activities as a transmission channel, heterogeneous effects suggest that higher latitude areas with shorter night hours in the growing season are less affected by the negative externality, supporting microclimate effects as the main mechanism. In addition, scarce wind resources and abundant precip-itation may weaken the negative effect. (JEL Q24, Q42)