Environmental pricing of externalities from different sources of electricity generation in Chile
The rapid increase in electricity demand in Chile means a choice must be made between major investments in renewable or non-renewable sources for additional production. Current projects to develop large dams for hydropower in Chilean Patagonia impose an environmental price by damaging the natural environment. On the other hand, the increased use of fossil fuels entails an environmental price in terms of air pollution and greenhouse gas emissions contributing to climate change. This paper studies the debate on future electricity supply in Chile by investigating the preferences of households for a variety of different sources of electricity generation such as fossil fuels, large hydropower in Chilean Patagonia and other renewable energy sources. Using Double Bounded Dichotomous Choice Contingent Valuation, a novel advanced disclosure method and internal consistency test are used to elicit the willingness to pay for less environmentally damaging sources. Policy results suggest a strong preference for renewable energy sources with higher environmental prices imposed by consumers on electricity generated from fossil fuels than from large dams in Chilean Patagonia. Policy results further suggest the possibility of introducing incentives for renewable energy developments that would be supported by consumers through green tariffs or environmental premiums. Methodological findings suggest that advanced disclosure learning overcomes the problem of internal inconsistency in SB-DB estimates.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Scarpa, Riccardo & Willis, Ken, 2010. "Willingness-to-pay for renewable energy: Primary and discretionary choice of British households' for micro-generation technologies," Energy Economics, Elsevier, vol. 32(1), pages 129-136, January.
- DeShazo, J. R., 2002. "Designing Transactions without Framing Effects in Iterative Question Formats," Journal of Environmental Economics and Management, Elsevier, vol. 43(3), pages 360-385, May.
- Groothuis, Peter A. & Groothuis, Jana D. & Whitehead, John C., 2008.
"Green vs. green: Measuring the compensation required to site electrical generation windmills in a viewshed,"
Elsevier, vol. 36(4), pages 1545-1550, April.
- Peter A. Groothuis & Jana D. Groothuis & John C. Whitehead, 2007. "Green vs. Green: Measuring the Compensation Required to Site Electrical Generation Windmills in a Viewshed," Working Papers 07-12, Department of Economics, Appalachian State University.
- Kanninen Barbara J., 1995. "Bias in Discrete Response Contingent Valuation," Journal of Environmental Economics and Management, Elsevier, vol. 28(1), pages 114-125, January.
- Koundouri, Phoebe & Kountouris, Yiannis & Remoundou, Kyriaki, 2009. "Valuing a wind farm construction: A contingent valuation study in Greece," Energy Policy, Elsevier, vol. 37(5), pages 1939-1944, May.
- Anthony Burton & Katherine Carson & Susan Chilton & W. George Hutchinson, 2009. "Why do people non-demand reveal in hypothetical double referenda for public goods?," Applied Economics, Taylor & Francis Journals, vol. 41(27), pages 3561-3569.
- Bateman, Ian J. & Cole, Matthew & Cooper, Philip & Georgiou, Stavros & Hadley, David & Poe, Gregory L., 2004. "On visible choice sets and scope sensitivity," Journal of Environmental Economics and Management, Elsevier, vol. 47(1), pages 71-93, January.
- Aadland, David & Caplan, Arthur J., 2006. "Cheap talk reconsidered: New evidence from CVM," Journal of Economic Behavior & Organization, Elsevier, vol. 60(4), pages 562-578, August.
- David Aadland & Arthur Caplan, 2002. "Cheap Talk Reconsidered: New Evidence from CVM," Working Papers 2002-20, Utah State University, Department of Economics.
- Burton, Anthony C. & Carson, Katherine S. & Chilton, Susan M. & Hutchinson, W. George, 2003. "An experimental investigation of explanations for inconsistencies in responses to second offers in double referenda," Journal of Environmental Economics and Management, Elsevier, vol. 46(3), pages 472-489, November.
- Susan Chilton & Anthony Burton & Katherine Carson & W. George Hutchinson, 2004. "An Experimental Investigation Of Explanations For Inconsistencies In Responses To Second Offers In Double Referenda," Royal Economic Society Annual Conference 2004 60, Royal Economic Society.
- Roe, Brian & Teisl, Mario F. & Levy, Alan & Russell, Matthew, 2001. "US consumers' willingness to pay for green electricity," Energy Policy, Elsevier, vol. 29(11), pages 917-925, September.
- Mulder, Arjen, 2008. "Do economic instruments matter? Wind turbine investments in the EU(15)," Energy Economics, Elsevier, vol. 30(6), pages 2980-2991, November.
- Laura O. Taylor & Ronald G. Cummings, 1999. "Unbiased Value Estimates for Environmental Goods: A Cheap Talk Design for the Contingent Valuation Method," American Economic Review, American Economic Association, vol. 89(3), pages 649-665, June.
- Alberini Anna, 1995. "Efficiency vs Bias of Willingness-to-Pay Estimates: Bivariate and Interval-Data Models," Journal of Environmental Economics and Management, Elsevier, vol. 29(2), pages 169-180, September.
- W. Michael Hanemann, 1984. "Welfare Evaluations in Contingent Valuation Experiments with Discrete Responses," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(3), pages 332-341.
- Longo, Alberto & Markandya, Anil & Petrucci, Marta, 2008. "The internalization of externalities in the production of electricity: Willingness to pay for the attributes of a policy for renewable energy," Ecological Economics, Elsevier, vol. 67(1), pages 140-152, August.
- Alberto Longo & Anil Markandya & Marta Petrucci, 2006. "The Internalization of Externalities in The Production of Electricity: Willingness to Pay for the Attributes of a Policy for Renewable Energy," Working Papers 2006.132, Fondazione Eni Enrico Mattei.
- Alvarez-Farizo, Begona & Hanley, Nick, 2002. "Using conjoint analysis to quantify public preferences over the environmental impacts of wind farms. An example from Spain," Energy Policy, Elsevier, vol. 30(2), pages 107-116, January.
- Wiser, Ryan H., 2007. "Using contingent valuation to explore willingness to pay for renewable energy: A comparison of collective and voluntary payment vehicles," Ecological Economics, Elsevier, vol. 62(3-4), pages 419-432, May.
- Anthony D. Owen, 2006. "Evaluating the Costs and Benefits of Renewable Energy Technologies," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 39(2), pages 207-215, 06.
- Batley, S. L. & Colbourne, D. & Fleming, P. D. & Urwin, P., 2001. "Citizen versus consumer: challenges in the UK green power market," Energy Policy, Elsevier, vol. 29(6), pages 479-487, May.
- Bateman, Ian J. & Langford, Ian H. & Jones, Andrew P. & Kerr, Geoffrey N., 2001. "Bound and path effects in double and triple bounded dichotomous choice contingent valuation," Resource and Energy Economics, Elsevier, vol. 23(3), pages 191-213, July.
- Hanley, Nick & Nevin, Ceara, 1999. "Appraising renewable energy developments in remote communities: the case of the North Assynt Estate, Scotland," Energy Policy, Elsevier, vol. 27(9), pages 527-547, September.
- Richard Carson & Robert Mitchell & Michael Hanemann & Raymond Kopp & Stanley Presser & Paul Ruud, 2003. "Contingent Valuation and Lost Passive Use: Damages from the Exxon Valdez Oil Spill," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 25(3), pages 257-286, July.
- Carlo Andrea Bollino, 2009. "The Willingness to Pay for Renewable Energy Sources: The Case of Italy with Socio-demographic Determinants," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 81-96.
- Bateman, Ian J. & Burgess, Diane & Hutchinson, W. George & Matthews, David I., 2008. "Learning design contingent valuation (LDCV): NOAA guidelines, preference learning and coherent arbitrariness," Journal of Environmental Economics and Management, Elsevier, vol. 55(2), pages 127-141, March.
- Gregory L. Poe & Michael P. Welsh & Patricia A. Champ, 1997. "Measuring the Difference in Mean Willingness to Pay When Dichotomous Choice Contingent Valuation Responses Are Not Independent," Land Economics, University of Wisconsin Press, vol. 73(2), pages 255-267.
- Whitehead, John C. & Cherry, Todd L., 2007. "Willingness to pay for a Green Energy program: A comparison of ex-ante and ex-post hypothetical bias mitigation approaches," Resource and Energy Economics, Elsevier, vol. 29(4), pages 247-261, November.
- Joseph C. Cooper & Michael Hanemann & Giovanni Signorello, 2002. "One-and-One-Half-Bound Dichotomous Choice Contingent Valuation," The Review of Economics and Statistics, MIT Press, vol. 84(4), pages 742-750, November.
- Cooper, Joseph C. & Hanemann, W. Michael & Signorello, Giovanni, 2001. "One-and-One-Half Bound Dichotomous Choice Contingent Valuation," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt09c663b2, Department of Agricultural & Resource Economics, UC Berkeley.
- Cooper, Joseph C. & Hanemann, W.M. & Signorello, Giovanni, 2002. "One and One-Half Bound Dichotomous Choice Contingent Valuation," MPRA Paper 17190, University Library of Munich, Germany, revised Nov 2002.
- Cameron Trudy Ann & Quiggin John, 1994. "Estimation Using Contingent Valuation Data from a Dichotomous Choice with Follow-Up Questionnaire," Journal of Environmental Economics and Management, Elsevier, vol. 27(3), pages 218-234, November.
- Trudy Ann Cameron & John Quiggin, 1992. "Estimation Using Contingent Valuation Data From a "Dichotomous Choice with Follow-Up" Questionnaire," UCLA Economics Working Papers 653, UCLA Department of Economics.
- Lintunen, Jussi & Kangas, Hanna-Liisa, 2010. "The case of co-firing: The market level effects of subsidizing biomass co-combustion," Energy Economics, Elsevier, vol. 32(3), pages 694-701, May.
- Georgakellos, Dimitrios A., 2010. "Impact of a possible environmental externalities internalisation on energy prices: The case of the greenhouse gases from the Greek electricity sector," Energy Economics, Elsevier, vol. 32(1), pages 202-209, January.
- Zarnikau, Jay, 2003. "Consumer demand for `green power' and energy efficiency," Energy Policy, Elsevier, vol. 31(15), pages 1661-1672, December.
- Bergmann, Ariel & Hanley, Nick & Wright, Robert, 2006. "Valuing the attributes of renewable energy investments," Energy Policy, Elsevier, vol. 34(9), pages 1004-1014, June.
- Barbara J. Kanninen, 1993. "Optimal Experimental Design for Double-Bounded Dichotomous Choice Contingent Valuation," Land Economics, University of Wisconsin Press, vol. 69(2), pages 138-146.
- Richard Carson & Theodore Groves, 2007. "Incentive and informational properties of preference questions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(1), pages 181-210, May.
- Carson, Richard T & Groves, Theodore, 2010. "Incentive and Information Properties of Preference Questions," University of California at San Diego, Economics Working Paper Series qt88d8644g, Department of Economics, UC San Diego.
- Meyerhoff, Jürgen & Ohl, Cornelia & Hartje, Volkmar, 2010. "Landscape externalities from onshore wind power," Energy Policy, Elsevier, vol. 38(1), pages 82-92, January.
- Brian Byrnes & Clive Jones† & Sandra Goodman‡, 1999. "Contingent Valuation and Real Economic Commitments: Evidence from Electric Utility Green Pricing Programmes," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 42(2), pages 149-166.
- Nomura, Noboru & Akai, Makoto, 2004. "Willingness to pay for green electricity in Japan as estimated through contingent valuation method," Applied Energy, Elsevier, vol. 78(4), pages 453-463, August.
- W. George Hutchinson & Riccardo Scarpa & Susan M. Chilton & T. McCallion, 2001. "Parametric and Non-Parametric Estimates of Willingness to Pay for Forest Recreation in Northern Ireland: A Discrete Choice Contingent Valuation Study with Follow-Ups," Journal of Agricultural Economics, Wiley Blackwell, vol. 52(1), pages 104-122.
- Färe, Rolf & Grosskopf, Shawna & Pasurka, Carl Jr., 2010. "Toxic releases: An environmental performance index for coal-fired power plants," Energy Economics, Elsevier, vol. 32(1), pages 158-165, January.
- Riccardo Scarpa & Ian Bateman, 2000. "Efficiency Gains Afforded by Improved Bid Design versus Follow-up Valuation Questions in Discrete-Choice CV Studies," Land Economics, University of Wisconsin Press, vol. 76(2), pages 299-311.
- Borchers, Allison M. & Duke, Joshua M. & Parsons, George R., 2007. "Does willingness to pay for green energy differ by source?," Energy Policy, Elsevier, vol. 35(6), pages 3327-3334, June. Full references (including those not matched with items on IDEAS)