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Individual Option Prices for Climate Change Mitigation

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  • Trudy Ann Cameron

    (Department of Economics, University of Oregon)

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.

Suggested Citation

  • Trudy Ann Cameron, 2002. "Individual Option Prices for Climate Change Mitigation," University of Oregon Economics Department Working Papers 2003-9, University of Oregon Economics Department, revised 20 Jul 2002.
    • Handle: RePEc:ore:uoecwp:2003-9
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    File URL: http://economics.uoregon.edu/papers/UO-2003-9_Cameron_climate_classroom.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    option prices; climate change; stated preferences; contingent valuation; state-dependent preferences;
    All these keywords.

    JEL classification:

    • H0 - Public Economics - - General
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • N5 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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