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Farmers’ willingness to participate in collective biogas investment: A discrete choice experiment study

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  • Zemo, Kahsay Haile
  • Termansen, Mette

Abstract

Biogas production may make an important contribution to multiple policy objectives, i.e. the transition to renewable energy, increased recycling of agricultural waste and reduction in greenhouse gas emission from agriculture. Despite the role of biogas in achieving these wider benefits, the engagement of stakeholders such as farmers has been low and the barriers to their participation in biogas production is not well understood. This study examines farmers’ willingness to participate in a unique, manure-based collective biogas investment based on a discrete choice experiment study of Danish farmers. Our results show that the majority of farmers, including farmers who never considered investing in biogas before and farmers that already participate in conventional biogas plants, are interested in a partnership-based biogas investment (PBI). A mixed logit model with flexible distribution shows that farmers’ participation in PBI is mainly motivated by a moderate number of partner farmers, short distance between the farm and the plant, contract options to sell biogas, an option to cancel the partnership, and free startup consultancy. Farmers are willing to accept a significant reduction in subsidy to acquire favorable aspects of the PBI. A second stage analysis of farmers’ intensity of participation also reveals that an increase in livestock units, involvement in off-farm activity, increase in farm size, and positive view towards investment enhance willingness to supply manure. Linking results from discrete choice and corner solution models, we estimate the average manure supply to a partnership-based biogas plant to be around 96,000 tons/year.

Suggested Citation

  • Zemo, Kahsay Haile & Termansen, Mette, 2018. "Farmers’ willingness to participate in collective biogas investment: A discrete choice experiment study," Resource and Energy Economics, Elsevier, vol. 52(C), pages 87-101.
  • Handle: RePEc:eee:resene:v:52:y:2018:i:c:p:87-101
    DOI: 10.1016/j.reseneeco.2017.12.001
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    3. Alberto Finzi & Gabriele Mattachini & Daniela Lovarelli & Elisabetta Riva & Giorgio Provolo, 2020. "Technical, Economic, and Environmental Assessment of a Collective Integrated Treatment System for Energy Recovery and Nutrient Removal from Livestock Manure," Sustainability, MDPI, Open Access Journal, vol. 12(7), pages 1-18, April.
    4. He, Ke & Zhang, Junbiao & Zeng, Yangmei, 2020. "Households’ willingness to pay for energy utilization of crop straw in rural China:Based on an improved UTAUT model," Energy Policy, Elsevier, vol. 140(C).
    5. Eeva ALHO, 2019. "Farmers’ Willingness To Invest In New Cooperative Instruments: A Choice Experiment," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 90(1), pages 161-186, March.
    6. Demel, Simona & Longo, Alberto & Mariel, Petr, 2020. "Trading off visual disamenity for renewable energy: Willingness to pay for seaweed farming for energy production," Ecological Economics, Elsevier, vol. 173(C).
    7. Shuangjin Wang & Yuan Tian & Xiaowei Liu & Maggie Foley, 2019. "How Farmers Make Investment Decisions: Evidence from a Farmer Survey in China," Sustainability, MDPI, Open Access Journal, vol. 12(1), pages 1-19, December.
    8. Dmytro Serebrennikov & Fiona Thorne & Zein Kallas & Sinéad N. McCarthy, 2020. "Factors Influencing Adoption of Sustainable Farming Practices in Europe: A Systemic Review of Empirical Literature," Sustainability, MDPI, Open Access Journal, vol. 12(22), pages 1-23, November.
    9. Qiang Wang & Thomas Dogot & Guosheng Wu & Xianlei Huang & Changbin Yin, 2019. "Residents’ Willingness for Centralized Biogas Production in Hebei and Shandong Provinces," Sustainability, MDPI, Open Access Journal, vol. 11(24), pages 1-16, December.
    10. Zemo, Kahsay Haile & Panduro, Toke Emil & Termansen, Mette, 2019. "Impact of biogas plants on rural residential property values and implications for local acceptance," Energy Policy, Elsevier, vol. 129(C), pages 1121-1131.

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