IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v6y2014i8p5378-5400d39347.html
   My bibliography  Save this article

The Question of Sustainability of Green Electricity Policy Intervention

Author

Listed:
  • Simona Bigerna

    (Department of Economics, University of Perugia, via A. Pascoli 21, 06123 Perugia, Italy
    These authors contributed equally to this work.)

  • Carlo Andrea Bollino

    (Department of Economics, University of Perugia, via A. Pascoli 21, 06123 Perugia, Italy
    These authors contributed equally to this work.)

  • Paolo Polinori

    (Department of Economics, University of Perugia, via A. Pascoli 21, 06123 Perugia, Italy
    These authors contributed equally to this work.)

Abstract

In this paper, we analyse the financial viability and economic sustainability implications of government programs for the development of renewable energy sources, explicitly considering that consumers take environmental issues into account. We envisage a broad policy strategy for the future, which we label the “World Sustainable Scenario”, and we quantify the inter-temporal resource requirement in terms of investment necessary to achieve it. We perform an empirical meta-analysis to quantify the willingness to pay for green electricity worldwide. Subsequently, we compare the amount of resources required according to policy programs and the populations’ willingness to sacrifice current resources for future benefits ( i.e. , willingness to finance future investments) to assess the plausibility of current policies. The main empirical findings show that the population’s attitude toward green electricity will support, on average, 50% of the total investment required. We conclude that this is a positive result, which will make possible the success of the renewable energy sources development policy.

Suggested Citation

  • Simona Bigerna & Carlo Andrea Bollino & Paolo Polinori, 2014. "The Question of Sustainability of Green Electricity Policy Intervention," Sustainability, MDPI, vol. 6(8), pages 1-23, August.
    • Handle: RePEc:gam:jsusta:v:6:y:2014:i:8:p:5378-5400:d:39347
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/6/8/5378/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/6/8/5378/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. James Murphy & P. Allen & Thomas Stevens & Darryl Weatherhead, 2005. "A Meta-analysis of Hypothetical Bias in Stated Preference Valuation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 30(3), pages 313-325, March.
    2. Zhang, Lei & Wu, Yang, 2012. "Market segmentation and willingness to pay for green electricity among urban residents in China: The case of Jiangsu Province," Energy Policy, Elsevier, vol. 51(C), pages 514-523.
    3. Tariq Banuri & Hans Opschoor, 2007. "Climate Change and Sustainable Development," Working Papers 56, United Nations, Department of Economics and Social Affairs.
    4. 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.
    5. Bigerna, Simona & Polinori, Paolo, 2014. "Italian households׳ willingness to pay for green electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 34(C), pages 110-121.
    6. Grösche, Peter & Schröder, Carsten, 2011. "Eliciting public support for greening the electricity mix using random parameter techniques," Energy Economics, Elsevier, vol. 33(2), pages 363-370, March.
    7. Rowe, Robert D. & Schulze, William D. & Breffle, William S., 1996. "A Test for Payment Card Biases," Journal of Environmental Economics and Management, Elsevier, vol. 31(2), pages 178-185, September.
    8. Brons, Martijn & Nijkamp, Peter & Pels, Eric & Rietveld, Piet, 2008. "A meta-analysis of the price elasticity of gasoline demand. A SUR approach," Energy Economics, Elsevier, vol. 30(5), pages 2105-2122, September.
    9. Sayman, Serdar & Onculer, Ayse, 2005. "Effects of study design characteristics on the WTA-WTP disparity: A meta analytical framework," Journal of Economic Psychology, Elsevier, vol. 26(2), pages 289-312, April.
    10. Hansla, Andre & Gamble, Amelie & Juliusson, Asgeir & Garling, Tommy, 2008. "Psychological determinants of attitude towards and willingness to pay for green electricity," Energy Policy, Elsevier, vol. 36(2), pages 768-774, February.
    11. 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.
    12. Tim Jackson, 2005. "Live Better by Consuming Less?: Is There a “Double Dividend” in Sustainable Consumption?," Journal of Industrial Ecology, Yale University, vol. 9(1‐2), pages 19-36, January.
    13. Asdrubali, F. & Presciutti, A. & Scrucca, F., 2013. "Development of a greenhouse gas accounting GIS-based tool to support local policy making—application to an Italian municipality," Energy Policy, Elsevier, vol. 61(C), pages 587-594.
    14. 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.
    15. 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.
    16. Molly Espey, 1996. "Explaining the Variation in Elasticity Estimates of Gasoline Demand in the United States: A Meta-Analysis," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 49-60.
    17. T.D. Stanley & Hristos Doucouliagos & Margaret Giles & Jost H. Heckemeyer & Robert J. Johnston & Patrice Laroche & Jon P. Nelson & Martin Paldam & Jacques Poot & Geoff Pugh & Randall S. Rosenberger & , 2013. "Meta-Analysis Of Economics Research Reporting Guidelines," Journal of Economic Surveys, Wiley Blackwell, vol. 27(2), pages 390-394, April.
    18. 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.
    19. Domínguez Arcos, Fernando & Labandeira Villot, Xavier & Loureiro García, María, 2011. "Climate Change Policies And Social Preferences In Galicia And Spain," Revista Galega de Economía, University of Santiago de Compostela. Faculty of Economics and Business., vol. 20(1).
    20. Andrew A. Goett & Kathleen Hudson & Kenneth E. Train, 2000. "Customers' Choice Among Retail Energy Suppliers: The Willingness-to-Pay for Service Attributes," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 1-28.
    21. William J. Baumol & Wallace E. Oates, 1971. "The Use of Standards and Prices for Protection of the Environment," Palgrave Macmillan Books, in: Peter Bohm & Allen V. Kneese (ed.), The Economics of Environment, pages 53-65, Palgrave Macmillan.
    22. Lo Giudice Gino Moncada & Francesco Asdrubali & Antonella Rotili, 2013. "Influence of new fac tors on global energy prospects in the medium term: compar ison among the 2010, 2011 and 2012 editions of the IEA?s World Energy Outlook reports," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2013(3), pages 67-89.
    23. Kremers, Hans & Nijkamp, Peter & Rietveld, Piet, 2002. "A meta-analysis of price elasticities of transport demand in a general equilibrium framework," Economic Modelling, Elsevier, vol. 19(3), pages 463-485, May.
    24. Holmgren, Johan, 2007. "Meta-analysis of public transport demand," Transportation Research Part A: Policy and Practice, Elsevier, vol. 41(10), pages 1021-1035, December.
    25. Christian A. Vossler & Robert G. Ethier & Gregory L. Poe & Michael P. Welsh, 2003. "Payment Certainty in Discrete Choice Contingent Valuation Responses: Results from a Field Validity Test," Southern Economic Journal, John Wiley & Sons, vol. 69(4), pages 886-902, April.
    26. 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.
    27. 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.
    28. T.D. Stanley & Hristos Doucouliagos & Margaret Giles & Jost Heckemeyer & Robert Johnston & Patrice Laroche & Jon Nelson & Martin Paldam & Jacques Poot & Geoff Pugh & Randall Rosenberger & Katja Rost, 2013. "Meta-analysis of economics research reporting guidelines," Post-Print hal-02137661, HAL.
    29. Liverani, Andrea, 2009. "Climate change and individual behavior : considerations for policy," Policy Research Working Paper Series 5058, The World Bank.
    30. Jaffe, Adam B. & Stavins, Robert N., 1994. "The energy-efficiency gap What does it mean?," Energy Policy, Elsevier, vol. 22(10), pages 804-810, October.
    31. Yoo, Seung-Hoon & Kwak, So-Yoon, 2009. "Willingness to pay for green electricity in Korea: A contingent valuation study," Energy Policy, Elsevier, vol. 37(12), pages 5408-5416, December.
    32. T. D. Stanley, 2001. "Wheat from Chaff: Meta-analysis as Quantitative Literature Review," Journal of Economic Perspectives, American Economic Association, vol. 15(3), pages 131-150, Summer.
    33. Sims, Ralph E. H. & Rogner, Hans-Holger & Gregory, Ken, 2003. "Carbon emission and mitigation cost comparisons between fossil fuel, nuclear and renewable energy resources for electricity generation," Energy Policy, Elsevier, vol. 31(13), pages 1315-1326, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mahmure Övül Arıoğlu Akan & Ayşe Ayçim Selam & Seniye Ümit Oktay Fırat & Merve Er Kara & Semih Özel, 2015. "A Comparative Analysis of Renewable Energy Use and Policies: Global and Turkish Perspectives," Sustainability, MDPI, vol. 7(12), pages 1-29, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Simona Bigerna & Paolo Polinori, 2015. "Assessing the Determinants of Renewable Electricity Acceptance Integrating Meta-Analysis Regression and a Local Comprehensive Survey," Sustainability, MDPI, vol. 7(9), pages 1-24, August.
    2. Oerlemans, Leon A.G. & Chan, Kai-Ying & Volschenk, Jako, 2016. "Willingness to pay for green electricity: A review of the contingent valuation literature and its sources of error," Renewable and Sustainable Energy Reviews, Elsevier, vol. 66(C), pages 875-885.
    3. Bigerna, Simona & Polinori, Paolo, 2014. "Italian households׳ willingness to pay for green electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 34(C), pages 110-121.
    4. Soon, Jan-Jan & Ahmad, Siti-Aznor, 2015. "Willingly or grudgingly? A meta-analysis on the willingness-to-pay for renewable energy use," Renewable and Sustainable Energy Reviews, Elsevier, vol. 44(C), pages 877-887.
    5. Ma, Chunbo & Rogers, Abbie A. & Kragt, Marit E. & Zhang, Fan & Polyakov, Maksym & Gibson, Fiona & Chalak, Morteza & Pandit, Ram & Tapsuwan, Sorada, 2015. "Consumers’ willingness to pay for renewable energy: A meta-regression analysis," Resource and Energy Economics, Elsevier, vol. 42(C), pages 93-109.
    6. Herbes, Carsten & Friege, Christian & Baldo, Davide & Mueller, Kai-Markus, 2015. "Willingness to pay lip service? Applying a neuroscience-based method to WTP for green electricity," Energy Policy, Elsevier, vol. 87(C), pages 562-572.
    7. Zorić, Jelena & Hrovatin, Nevenka, 2012. "Household willingness to pay for green electricity in Slovenia," Energy Policy, Elsevier, vol. 47(C), pages 180-187.
    8. Sundt, Swantje & Rehdanz, Katrin, 2015. "Consumers' willingness to pay for green electricity: A meta-analysis of the literature," Energy Economics, Elsevier, vol. 51(C), pages 1-8.
    9. 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.
    10. Dagher, Leila & Harajli, Hassan, 2015. "Willingness to pay for green power in an unreliable electricity sector: Part 1. The case of the Lebanese residential sector," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 1634-1642.
    11. Dagher, Leila & Bird, Lori & Heeter, Jenny, 2017. "Residential green power demand in the United States," Renewable Energy, Elsevier, vol. 114(PB), pages 1062-1068.
    12. Bakkensen, Laura & Schuler, Paul, 2020. "A preference for power: Willingness to pay for energy reliability versus fuel type in Vietnam," Energy Policy, Elsevier, vol. 144(C).
    13. Ndebele, Tom, 2020. "Assessing the potential for consumer-driven renewable energy development in deregulated electricity markets dominated by renewables," Energy Policy, Elsevier, vol. 136(C).
    14. Motz, Alessandra, 2021. "Consumer acceptance of the energy transition in Switzerland: The role of attitudes explained through a hybrid discrete choice model," Energy Policy, Elsevier, vol. 151(C).
    15. Lee, Chul-Yong & Heo, Hyejin, 2016. "Estimating willingness to pay for renewable energy in South Korea using the contingent valuation method," Energy Policy, Elsevier, vol. 94(C), pages 150-156.
    16. Elcin Akcura, 2013. "Mandatory versus voluntary payment for green electricity," Working Papers 161, European Bank for Reconstruction and Development, Office of the Chief Economist.
    17. Carsten Herbes & Lorenz Braun & Dennis Rube, 2016. "Pricing of Biomethane Products Targeted at Private Households in Germany—Product Attributes and Providers’ Pricing Strategies," Energies, MDPI, vol. 9(4), pages 1-15, March.
    18. Elcin Akcura, 2013. "Mandatory vs voluntary Payment for Green Electricity," Cambridge Working Papers in Economics 1339, Faculty of Economics, University of Cambridge.
    19. Gracia, Azucena & Barreiro-Hurlé, Jesús & Pérez y Pérez, Luis, 2012. "Can renewable energy be financed with higher electricity prices? Evidence from a Spanish region," Energy Policy, Elsevier, vol. 50(C), pages 784-794.
    20. Amador, Francisco Javier & González, Rosa Marina & Ramos-Real, Francisco Javier, 2013. "Supplier choice and WTP for electricity attributes in an emerging market: The role of perceived past experience, environmental concern and energy saving behavior," Energy Economics, Elsevier, vol. 40(C), pages 953-966.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:6:y:2014:i:8:p:5378-5400:d:39347. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.