Do Us Electricity Consumers Value Carbon Capture More than Renewable Energy? Evidence from a Pilot Discrete Choice Experiment

Abstract

Utilizing a discrete choice experiment with 250 US electricity consumers, this study estimates willingness to pay for each percentage of carbon dioxide captured and the preferred carbon management technique—permanent storage or industrial utilization. Results based on the alternative specific conditional logit model suggest a willingness to pay of $0.25 and $0.13 for each percent increase in renewable energy and carbon capture, respectively, indicating a lower value preference for carbon capture than cleaner production. This suggests that consumers place nearly twice the value on renewable energy compared to carbon capture. Preliminary results suggest there is a preference for carbon utilization over carbon storage, however, additional studies are needed to examine heterogeneous preferences based on individual characteristics.

Keywords: Carbon capture and storage, carbon capture and utilization, willingness-to-pay, energy transition, decarbonization, Section 45Q