Abstract

http://ssrn.com/abstract=1626931
 
 

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Willingness to Pay for Climate Policy: A Review of Estimates


Gregory F. Nemet


University of Wisconsin - Madison - La Follette School of Public Affairs

Evan Johnson


University of Wisconsin - Madison

June 18, 2010

La Follette School Working Paper No. 2010-011

Abstract:     
One explanation for the modest pace of efforts to mitigate climate change, both federally and internationally, is that constituents do not ascribe much beneficial value to new laws that change the way we produce and consume energy. We surveyed estimates of consumer willingness to pay (WTP) for climate policy to: (1) assess the validity of this explanation, (2) compare elicitation techniques, and (3) explore factors that might explain variation in WTP estimates. We recalculated WTP estimates on an equivalent basis across 27 studies and found a range for WTP of $22-$437/household annually, with a median of $135. We also discuss outliers not included in this range. Discrepancies among estimates drawn from American, Asian, and European samples enable some preliminary inferences about the effects of nationality on WTP for climate stability. Environmental attitudes and beliefs are common explanatory elements in WTP surveys. Others include income, education, and political views. While valuation methods and survey types vary, the great majority of existing work in this area has relied on contingent valuation.

Number of Pages in PDF File: 35

Keywords: climate policy, willingness to pay

JEL Classification: Q51, Q54, Q58

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Date posted: June 19, 2010 ; Last revised: June 23, 2010

Suggested Citation

Nemet, Gregory F. and Johnson, Evan, Willingness to Pay for Climate Policy: A Review of Estimates (June 18, 2010). La Follette School Working Paper No. 2010-011. Available at SSRN: http://ssrn.com/abstract=1626931 or http://dx.doi.org/10.2139/ssrn.1626931

Contact Information

Gregory F. Nemet (Contact Author)
University of Wisconsin - Madison - La Follette School of Public Affairs ( email )
1225 Observatory Drive
Madison, WI 53705
United States
Evan Johnson
University of Wisconsin - Madison ( email )
716 Langdon Street
Madison, WI 53706-1481
United States
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