Willingness-to-pay and policy-instrument choice for climate-change policy in the United States

Matthew Kotchen, Kevin Boyle and Anthony A. Leiserowitz

Energy Policy, 2013, vol. 55, issue C, 617-625

Abstract: This paper provides the first willingness-to-pay (WTP) estimates in support of a national climate-change policy that are comparable with the costs of actual legislative efforts in the U.S. Congress. Based on a survey of 2034 American adults, we find that households are, on average, willing to pay between $79 and $89 per year in support of reducing domestic greenhouse-gas (GHG) emissions 17% by 2020. Even very conservative estimates yield an average WTP at or above $60 per year. Taking advantage of randomized treatments within the survey valuation question, we find that mean WTP does not vary substantially among the policy instruments of a cap-and-trade program, a carbon tax, or a GHG regulation. But there are differences in the sociodemographic characteristics of those willing to pay across policy instruments. Greater education always increases WTP. Older individuals have a lower WTP for a carbon tax and a GHG regulation, while greater household income increases WTP for these same two policy instruments. Republicans, along with those indicating no political party affiliation, have a significantly lower WTP regardless of the policy instrument. But many of these differences are no longer evident after controlling for respondent opinions about whether global warming is actually happening.

Keywords: Willingness-to-pay; Instrument choice; US climate policy (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (69)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:55:y:2013:i:c:p:617-625

DOI: 10.1016/j.enpol.2012.12.058

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