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Individual option prices for climate change mitigation

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  • Cameron, Trudy Ann

Abstract

Willingness to pay for climate change mitigation depends on people's perceptions about just how bad things will get if nothing is done. Individual subjective distributions for future climate conditions are combined with stated preference discrete choice data over alternative climate policies to estimate individual option prices (the appropriate ex ante welfare measure in the face of uncertainty) for climate change mitigation. We find significant scope effects in the estimated option prices according to both expected conditions and degree of uncertainty.

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File URL: http://www.sciencedirect.com/science/article/B6V76-4C04WRG-2/2/719b583238fa3d0d52a9aa16cd816dd0
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Bibliographic Info

Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 89 (2005)
Issue (Month): 2-3 (February)
Pages: 283-301

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Handle: RePEc:eee:pubeco:v:89:y:2005:i:2-3:p:283-301

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Web page: http://www.elsevier.com/locate/inca/505578

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Citations

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Cited by:
  1. Fredrik Carlsson & Mitesh Kataria & Alan Krupnick & Elina Lampi & Åsa Löfgren & Ping Qin & Susie Chun & Thomas Sterner, 2012. "Paying for Mitigation: A Multiple Country Study," Land Economics, University of Wisconsin Press, vol. 88(2), pages 326-340.
  2. Klaus Glenk & Sergio Colombo, 2013. "Modelling outcome-related risk in choice experiments," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(4), pages 559-578, October.
  3. Sonia Akter & Jeff Bennett & Michael B. Ward, 2013. "Climate change scepticism and public support for mitigation: evidence from an Australian choice experiment," Development Research Unit Working Paper Series archive-47, Monash University, Department of Economics.
  4. Riddel, Mary, 2011. "Uncertainty and measurement error in welfare models for risk changes," Journal of Environmental Economics and Management, Elsevier, vol. 61(3), pages 341-354, May.
  5. Cerroni, Simone & Notaro, Sandra & Raffaelli, Roberta & Shaw, Douglass W., 2013. "The incorporation of subjective risks into choice experiments to test scenario adjustment," 2013 Second Congress, June 6-7, 2013, Parma, Italy 149894, Italian Association of Agricultural and Applied Economics (AIEAA).
  6. Akter, Sonia & Bennett, Jeffrey W., 2009. "Household perceptions of climate change and preferences for mitigation action: the case of the Carbon Pollution Reduction Scheme in Australia," 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia 47936, Australian Agricultural and Resource Economics Society.
  7. Acquah, H. de-Graft & Onumah, Edward E., 2011. "Farmers Perception and Adaptation to Climate Change: An Estimation of Willingness to Pay," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 3(4), December.
  8. Carson, Richard T. & Louviere, Jordan J. & Wei, Edward, 2010. "Alternative Australian climate change plans: The public's views," Energy Policy, Elsevier, vol. 38(2), pages 902-911, February.
  9. Fouquet, Roger, 2012. "The demand for environmental quality in driving transitions to low-polluting energy sources," Energy Policy, Elsevier, vol. 50(C), pages 138-149.
  10. Trudy Cameron, 2005. "Updating Subjective Risks in the Presence of Conflicting Information: An Application to Climate Change," Journal of Risk and Uncertainty, Springer, vol. 30(1), pages 63-97, January.
  11. Brian Roach, . "08-03 "Policies for Funding a Response to Climate Change"," GDAE Working Papers 08-03, GDAE, Tufts University.
  12. Roberts, David C. & Boyer, Tracy A. & Lusk, Jayson L., 2008. "Preferences for environmental quality under uncertainty," Ecological Economics, Elsevier, vol. 66(4), pages 584-593, July.
  13. Veronesi, Marcella & Schlondorn, Tim & Zabel, Astrid & Engel, Stefanie, 2012. "Designing REDD+ Schemes to Address Permanence Concerns: Empirical Evidence from Kenya," Congress Papers 124131, Italian Association of Agricultural and Applied Economics (AIEAA).
  14. Nguyen, To N. & Shaw, W. Douglass & Woodward, Richard T. & Paterson, Robert & Boyle, Kevin, 2007. "An empirical study of option prices for hunting permits," Ecological Economics, Elsevier, vol. 63(2-3), pages 476-484, August.
  15. Mary Riddel, 2012. "Comparing risk preferences over financial and environmental lotteries," Journal of Risk and Uncertainty, Springer, vol. 45(2), pages 135-157, October.
  16. Mary Riddel & W. Shaw, 2006. "A theoretically-consistent empirical model of non-expected utility: An application to nuclear-waste transport," Journal of Risk and Uncertainty, Springer, vol. 32(2), pages 131-150, March.
  17. Michael Scott & James Dirks & Katherine Cort, 2008. "The value of energy efficiency programs for US residential and commercial buildings in a warmer world," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 13(4), pages 307-339, May.

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