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Mandatory vs voluntary Payment for Green Electricity

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  • Elcin Akcura

Abstract

Renewable energy sources have a critical role to play in contributing to the diversity, sustainability and security of energy supplies. The main objectives of the paper is to gain an understanding of UK households’preferences for the type of mechanism that is used to support renewables. Two self-designed contingent valuation method (cvM) surveys are used to explore whether the type of payment option has an impact on households’ willingness to pay for increasin9 share of renewable energy in electricity generation. The paper also investigates whether the type of payment mode affects respondents’ self-reported certainty of paying their stated valuations.The results indicate that the likelihood of paying a positive amount for supporting renewable energy is higher under a mandatory scheme compared to a voluntary payment option in the UK. Respondents have a higher level of certainty in paying their stated WTP under a mandatory payment scheme.

Suggested Citation

  • Elcin Akcura, 2013. "Mandatory vs voluntary Payment for Green Electricity," Cambridge Working Papers in Economics 1339, Faculty of Economics, University of Cambridge.
  • Handle: RePEc:cam:camdae:1339
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    File URL: http://www.econ.cam.ac.uk/research-files/repec/cam/pdf/cwpe1339.pdf
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    Cited by:

    1. 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.

    More about this item

    Keywords

    Contingent valuation Method; Payment Method; Renewable Energy; Green Tariffs; willingness to Pay; Zero Inflated Ordered Probit Model;

    JEL classification:

    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • D10 - Microeconomics - - Household Behavior - - - General
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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