The UK’s new prime minister, Liz Truss, recently announced the reversal of the 2019 ban on fracking. Facing an acute energy crisis, the government want to increase domestic energy production.
According to conventional economic theory, whether or not fracking should occur is simple. If the private benefits exceed the social costs, then fracking companies should be able to obtain local consent by compensating households with cash. If the costs are so large that households cannot be compensated, then fracking should not happen.
Yet in recent history fracking has occurred irrespective of whether there is a public appetite. In 2016, the government permitted fracking at Fylde’s Preston New Road site, overturning Lancashire county council’s initial rejection.
