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The Public's Preference for Green Power in Australia

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  • Ma, Chunbo
  • Burton, Michael P.

Abstract

Green electricity products are increasingly made available to consumers in many countries in an effort to address a number of environmental and social concerns. Most of the existing literature on this green electricity market focuses on consumer's characteristics and product attributes that could affect participation. However, the contribution of this environmental consumerism to the overall environmental good does not depend on participation alone. The real impact made relies on market penetration for green consumers (the proportion of green consumers) combined with the level of green consumption intensity-the commitment levels, or proportion of consumption that is green. We design an online interface that closely mimics the real market environment for electricity consumers in Western Australia and use an error component model to analyze consumers' choice of green electricity products is much more strongly influenced by consumer characteristics than product attributes. When green products are selected, the vast majority select the minimum commitment possible, and this is insensitive to the premium being charged on green power, suggesting that we are largely observing a "warm glow" for carbon mitigation.

Suggested Citation

  • Ma, Chunbo & Burton, Michael P., 2014. "The Public's Preference for Green Power in Australia," 2014 Conference (58th), February 4-7, 2014, Port Maquarie, Australia 165858, Australian Agricultural and Resource Economics Society.
  • Handle: RePEc:ags:aare14:165858
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    File URL: http://purl.umn.edu/165858
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    Cited by:

    1. Burtt, D. & Dargusch, P., 2015. "The cost-effectiveness of household photovoltaic systems in reducing greenhouse gas emissions in Australia: Linking subsidies with emission reductions," Applied Energy, Elsevier, vol. 148(C), pages 439-448.
    2. 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.

    More about this item

    Keywords

    Green Electricity; Choice Modeling; Error Components Model; Warm Glow; Environmental Economics and Policy; Resource /Energy Economics and Policy; D11; Q42; Q51;

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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