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Willingness-to-pay and policy-instrument choice for climate-change policy in the United States

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  • Kotchen, Matthew J.
  • Boyle, Kevin J.
  • Leiserowitz, Anthony A.

Abstract

This paper provides the first willingness-to-pay (WTP) estimates in support of a national climate-change policy that are comparable with the costs of actual legislative efforts in the U.S. Congress. Based on a survey of 2034 American adults, we find that households are, on average, willing to pay between $79 and $89 per year in support of reducing domestic greenhouse-gas (GHG) emissions 17% by 2020. Even very conservative estimates yield an average WTP at or above $60 per year. Taking advantage of randomized treatments within the survey valuation question, we find that mean WTP does not vary substantially among the policy instruments of a cap-and-trade program, a carbon tax, or a GHG regulation. But there are differences in the sociodemographic characteristics of those willing to pay across policy instruments. Greater education always increases WTP. Older individuals have a lower WTP for a carbon tax and a GHG regulation, while greater household income increases WTP for these same two policy instruments. Republicans, along with those indicating no political party affiliation, have a significantly lower WTP regardless of the policy instrument. But many of these differences are no longer evident after controlling for respondent opinions about whether global warming is actually happening.

Suggested Citation

  • Kotchen, Matthew J. & Boyle, Kevin J. & Leiserowitz, Anthony A., 2013. "Willingness-to-pay and policy-instrument choice for climate-change policy in the United States," Energy Policy, Elsevier, vol. 55(C), pages 617-625.
  • Handle: RePEc:eee:enepol:v:55:y:2013:i:c:p:617-625
    DOI: 10.1016/j.enpol.2012.12.058
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    References listed on IDEAS

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    Cited by:

    1. Jenkins, Jesse D., 2014. "Political economy constraints on carbon pricing policies: What are the implications for economic efficiency, environmental efficacy, and climate policy design?," Energy Policy, Elsevier, vol. 69(C), pages 467-477.
    2. repec:spr:envpol:v:20:y:2018:i:2:d:10.1007_s10018-017-0202-9 is not listed on IDEAS
    3. Vladimir Udalov & Paul J.J. Welfens, 2017. "Digital and Competing Information Sources: Impact on Environmental Concern und Prospects for Cooperation," EIIW Discussion paper disbei233, Universitätsbibliothek Wuppertal, University Library.
    4. Williams, Galina & Rolfe, John, 2017. "Willingness to pay for emissions reduction: Application of choice modeling under uncertainty and different management options," Energy Economics, Elsevier, vol. 62(C), pages 302-311.
    5. Anna Alberini & Milan Šcasný & Andrea Bigano, 2016. "Policy- v. Individual Heterogeneity in the Benefits of Climate Change Mitigation: Evidence from a Stated-Preference Survey," Working Papers 2016.80, Fondazione Eni Enrico Mattei.
    6. Jesse D. Jenkins & Valerie J. Karplus, 2016. "Carbon pricing under binding political constraints," WIDER Working Paper Series 044, World Institute for Development Economic Research (UNU-WIDER).
    7. Tvinnereim, Endre & Ivarsflaten, Elisabeth, 2016. "Fossil fuels, employment, and support for climate policies," Energy Policy, Elsevier, vol. 96(C), pages 364-371.
    8. Kragt, M.E. & Gibson, F.L. & Maseyk, F. & Wilson, K.A., 2016. "Public willingness to pay for carbon farming and its co-benefits," Ecological Economics, Elsevier, vol. 126(C), pages 125-131.
    9. Uehleke, Reinhard, 2016. "The role of question format for the support for national climate change mitigation policies in Germany and the determinants of WTP," Energy Economics, Elsevier, vol. 55(C), pages 148-156.
    10. Chankrajang, Thanyaporn & Muttarak, Raya, 2017. "Green Returns to Education: Does Schooling Contribute to Pro-Environmental Behaviours? Evidence from Thailand," Ecological Economics, Elsevier, vol. 131(C), pages 434-448.
    11. repec:eee:enepol:v:111:y:2017:i:c:p:362-370 is not listed on IDEAS
    12. Udalov, Vladimir & Welfens, Paul J. J., 2017. "Digital and Competing Information Sources: Impact on Environmental Concern and Prospects for Cooperation," IZA Discussion Papers 10684, Institute for the Study of Labor (IZA).
    13. Schleich, Joachim & Faure, Corinne, 2017. "Explaining citizens’ perceptions of international climate-policy relevance," Energy Policy, Elsevier, vol. 103(C), pages 62-71.
    14. repec:gam:jsusta:v:10:y:2018:i:6:p:1711-:d:148689 is not listed on IDEAS
    15. Heindl, Peter, 2014. "Ökonomische Aspekte der Lastenverteilung in der Umweltpolitik am Beispiel der Energiewende: Ein Beitrag zum interdisziplinären Dialog," ZEW Discussion Papers 14-061, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    16. repec:eee:enepol:v:109:y:2017:i:c:p:218-227 is not listed on IDEAS
    17. repec:eee:enepol:v:115:y:2018:i:c:p:221-229 is not listed on IDEAS
    18. Caroline Orset, 2017. "How do travellers respond to health and environmental policies to reduce air pollution?," Working Papers 2017/02, INRA, Economie Publique.
    19. Rong-Chang Jou & Tzu-Ying Chen, 2015. "External Costs to Parties Involved in Highway Traffic Accidents: The Perspective of Highway Users," Sustainability, MDPI, Open Access Journal, vol. 7(6), pages 1-23, June.
    20. repec:eee:wdevel:v:105:y:2018:i:c:p:83-94 is not listed on IDEAS
    21. Song, Tae-Ho & Lim, Kyoung-Min & Yoo, Seung-Hoon, 2015. "Estimating the public’s value of implementing the CO2 emissions trading scheme in Korea," Energy Policy, Elsevier, vol. 83(C), pages 82-86.
    22. Alló, Maria & Loureiro, Maria L., 2014. "The role of social norms on preferences towards climate change policies: A meta-analysis," Energy Policy, Elsevier, vol. 73(C), pages 563-574.
    23. Lim, Hea-Jin & Yoo, Seung-Hoon, 2014. "Train travel passengers' willingness to pay to offset their CO2 emissions in Korea," Renewable and Sustainable Energy Reviews, Elsevier, vol. 32(C), pages 526-531.
    24. repec:eee:ecolec:v:142:y:2017:i:c:p:1-11 is not listed on IDEAS

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