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Willingness to pay for green electricity in Korea: A contingent valuation study

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  • Yoo, Seung-Hoon
  • Kwak, So-Yoon
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    Abstract

    Green electricity is energy that is generated from renewable energy sources such as solar power, wind power, small-scale hydroelectric power, tidal power, and biomass power. These sources mostly do not produce pollutants and are considered environmentally friendly. However, considering the current state of technology, they are more costly. Government should take visible actions to compensate for the increased production costs. This paper attempts to apply a contingent valuation (CV) method to obtain at least a preliminary evaluation of the benefits that ensue from the introduction of the policy that raises the percentage of green electricity consumption from 0.2% of the total electricity supply to 7% by 2011. Overall, the CV survey was successful in eliciting the willingness to pay (WTP) for green electricity considering that the CV method operated within respondents' abilities to answer and the WTP estimates were statistically significant. The monthly mean WTP estimates from parametric and non-parametric methods were KRW 1681 (USD 1.8) and KRW 2072 (USD 2.2), respectively. The estimates of the annual benefits to relevant residents amounted to KRW 150.5 billion (USD 157.5 million) and KRW 185.6 billion (USD 194.2 million), respectively.

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    Bibliographic Info

    Article provided by Elsevier in its journal Energy Policy.

    Volume (Year): 37 (2009)
    Issue (Month): 12 (December)
    Pages: 5408-5416

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    Handle: RePEc:eee:enepol:v:37:y:2009:i:12:p:5408-5416

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    Web page: http://www.elsevier.com/locate/enpol

    Related research

    Keywords: Contingent valuation Green electricity Willingness to pay;

    References

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    Citations

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    Cited by:
    1. Pek, Chuen-Khee & Tee, Chee-Hoong & Ng, Phuay-Ying, 2010. "A Contingent Valuation Estimation of Hill Recreational and Services Values in Malaysia," MPRA Paper 23125, University Library of Munich, Germany.
    2. Pek, Chuen Khee & Othman, Jamal, 2010. "Household Demand for Solid Waste Disposal Options in Malaysia," MPRA Paper 23143, University Library of Munich, Germany.
    3. Guo, Xiurui & Liu, Haifeng & Mao, Xianqiang & Jin, Jianjun & Chen, Dongsheng & Cheng, Shuiyuan, 2014. "Willingness to pay for renewable electricity: A contingent valuation study in Beijing, China," Energy Policy, Elsevier, vol. 68(C), pages 340-347.
    4. Kiran Krishnamurthy, Chandra & Kriström, Bengt, 2013. "Determinants of the price-premium for Green Energy: Evidence from an OECD cross-section," CERE Working Papers 2013:7, CERE - the Center for Environmental and Resource Economics, revised 30 Jun 2014.
    5. Elcin Akcura, 2013. "Mandatory versus voluntary payment for green electricity," Working Papers 161, European Bank for Reconstruction and Development, Office of the Chief Economist.
    6. Chuen Khee, Pek & Yet Mee, Lim & Chee Keong, Choong, 2011. "The economic impact of climate change on food security in Malaysia," MPRA Paper 37199, University Library of Munich, Germany.
    7. Elcin Akcura, 2013. "Mandatory vs voluntary Payment for Green Electricity," Cambridge Working Papers in Economics 1339, Faculty of Economics, University of Cambridge.
    8. Amador, Francisco Javier & González, Rosa Marina & Ramos-Real, Francisco Javier, 2013. "Supplier choice and WTP for electricity attributes in an emerging market: The role of perceived past experience, environmental concern and energy saving behavior," Energy Economics, Elsevier, vol. 40(C), pages 953-966.
    9. repec:hhs:slucer:2014_007 is not listed on IDEAS
    10. Herbes, Carsten & Ramme, Iris, 2014. "Online marketing of green electricity in Germany—A content analysis of providers’ websites," Energy Policy, Elsevier, vol. 66(C), pages 257-266.
    11. Martinez-Paz, José M. & Almansa-Sáez, Carmen & Perni-Llorente, Ángel, 2011. "Energía eléctrica procedente de fuentes renovables: percepción social y disposición al pago/Willingness to pay for electricity from renewable sources," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 29, pages 539-560, Agosto.
    12. Ko, Eunju & Hwang, Yoo Kyung & Kim, Eun Young, 2013. "Green marketing' functions in building corporate image in the retail setting," Journal of Business Research, Elsevier, vol. 66(10), pages 1709-1715.
    13. Bigerna, Simona & Polinori, Paolo, 2014. "Italian households׳ willingness to pay for green electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 34(C), pages 110-121.
    14. Madureira, Lívia & Nunes, Luis C. & Borges, José G. & Falcão, André O., 2011. "Assessing forest management strategies using a contingent valuation approach and advanced visualisation techniques: A Portuguese case study," Journal of Forest Economics, Elsevier, vol. 17(4), pages 399-414.
    15. Hartmann, Patrick & Apaolaza, Vanessa & D'Souza, Clare & Echebarria, Carmen & Barrutia, Jose M., 2013. "Nuclear power threats, public opposition and green electricity adoption: Effects of threat belief appraisal and fear arousal," Energy Policy, Elsevier, vol. 62(C), pages 1366-1376.
    16. Shin, Jungwoo & Woo, JongRoul & Huh, Sung-Yoon & Lee, Jongsu & Jeong, Gicheol, 2014. "Analyzing public preferences and increasing acceptability for the Renewable Portfolio Standard in Korea," Energy Economics, Elsevier, vol. 42(C), pages 17-26.
    17. Bigerna, Simona & Polinori, Paolo, 2011. "Italian consumers’ willingness to pay for renewable energy sources," MPRA Paper 34408, University Library of Munich, Germany.

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