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Enhancing public acceptance of renewable heat obligation policies in South Korea: Consumer preferences and policy implications

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  • Lim, Sesil
  • Huh, Sung-Yoon
  • Shin, Jungwoo
  • Lee, Jongsu
  • Lee, Yong-Gil

Abstract

Renewable heat obligation (RHO) policies have continued to attract global attention, and the South Korean government plans to start enforcing these policies in 2016. To ensure the effectiveness of RHO policies, various preferences of stakeholders, including end users, should be considered in policy development because their benefits and costs can vary according to their level of obligation. A choice experiment was conducted to analyze the preferences of end users for two types of RHO policies: one aimed at heat suppliers and the other at building owners. The results indicate the necessity to focus on costs when designing RHO policies because this element was the most important factor influencing the public's acceptance of these policies and suggest that, for RHO policies aimed at heat suppliers, the government should convince end users of the stability of the heat supply, a factor considered to be important by consumers. Finally, the minimum level of the subsidy required to gain public approval of both types of RHO was examined. The annual government subsidies for the RHO for heating suppliers is expected to be KRW 330 billion, which can be covered by collecting taxes from those consumers not subject to these obligations. The results for RHOs for building owners indicate KRW 900 billion to 1.8 trillion as the amount of subsidy spending required of the government.

Suggested Citation

  • Lim, Sesil & Huh, Sung-Yoon & Shin, Jungwoo & Lee, Jongsu & Lee, Yong-Gil, 2019. "Enhancing public acceptance of renewable heat obligation policies in South Korea: Consumer preferences and policy implications," Energy Economics, Elsevier, vol. 81(C), pages 1167-1177.
  • Handle: RePEc:eee:eneeco:v:81:y:2019:i:c:p:1167-1177
    DOI: 10.1016/j.eneco.2015.01.018
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    More about this item

    Keywords

    Renewable heat obligation; Choice experiment; Mixed logit model;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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