TY - JOUR
T1 - The internalization of externalities in the production of electricity
T2 - willingness to pay for the attributes of a policy for renewable energy
AU - Longo, Alberto
AU - Markandya, Anil
AU - Petrucci, Marta
PY - 2008/8/15
Y1 - 2008/8/15
N2 - This paper investigates the willingness to pay of a sample of residents of Bath, England, for a hypothetical program that promotes the production of renewable energy. Using choice experiments, we assess the preferences of respondents for a policy for the promotion of renewable energy that: (i) contributes to the internalization of the external costs caused by fossil fuel technologies; (ii) affects the short-term security of energy supply; (iii) has an impact on the employment in the energy sector; and (iv) leads to an increase in the electricity bill. Responses to the choice questions show that our respondents are in favour of a policy for renewable energy and that they attach a high value to a policy that brings private and public benefits in terms of climate change and energy security benefits. Our results therefore suggest that consumers are willing to pay a higher price for electricity in order to internalize the external costs in terms of energy security, climate change and air pollution caused by the production of electricity.
AB - This paper investigates the willingness to pay of a sample of residents of Bath, England, for a hypothetical program that promotes the production of renewable energy. Using choice experiments, we assess the preferences of respondents for a policy for the promotion of renewable energy that: (i) contributes to the internalization of the external costs caused by fossil fuel technologies; (ii) affects the short-term security of energy supply; (iii) has an impact on the employment in the energy sector; and (iv) leads to an increase in the electricity bill. Responses to the choice questions show that our respondents are in favour of a policy for renewable energy and that they attach a high value to a policy that brings private and public benefits in terms of climate change and energy security benefits. Our results therefore suggest that consumers are willing to pay a higher price for electricity in order to internalize the external costs in terms of energy security, climate change and air pollution caused by the production of electricity.
KW - Energy Policy
KW - Valuation of Environmental Effects
KW - Alternative Energy Sources
UR - http://www.scopus.com/inward/record.url?scp=48549090137&partnerID=8YFLogxK
UR - http://dx.doi.org/10.1016/j.ecolecon.2007.12.006
U2 - 10.1016/j.ecolecon.2007.12.006
DO - 10.1016/j.ecolecon.2007.12.006
M3 - Article
VL - 67
SP - 140
EP - 152
JO - Ecological Economics
JF - Ecological Economics
IS - 1
ER -