Economics at your fingertips  

Environmental Pricing of Externalities from Different Sources of Electricity Generation: Evidence from a Contingent Valuation Study in Chile

Claudia Aravena ()
Additional contact information
Claudia Aravena: Queens University Belfast , UK

No 201016, Working Papers from Latin American and Caribbean Environmental Economics Program

Abstract: The rapid increase in electricity demand in Chile means a choice must be made between major investments in renewable or non-renewable sources for additional production. Current projects to develop large dams for hydropower in Chilean Patagonia impose an environmental price by damaging the natural environment. On the other hand, the increased use of fossil fuels entails an environmental price in terms of air pollution and greenhouse gas emissions contributing to climate change. This paper studies the debate on future electricity supply in Chile by investigating the preferences of households for a variety of different sources of electricity generation such as fossil fuels, large hydropower in Chilean Patagonia and other renewable energy sources. Using Double Bounded Dichotomous Choice Contingent Valuation we introduce a novel advanced disclosure method and internal consistency test to elicit the willingness to pay for less environmentally damaging sources. Policy results suggest a strong preference for renewable energy sources with higher environmental prices imposed by consumers on electricity generated from fossil fuels than from large dams in Chilean Patagonia. Policy results further suggest the possibility of introducing incentives for renewable energy developments that would be supported by consumers through green tariffs or environmental premiums. Methodological findings suggest that the advanced disclosure method overcomes the problem of internal inconsistency in SB-DB estimates.

Pages: 37 pages
Date: 2010-10, Revised 2010-10
New Economics Papers: this item is included in nep-agr, nep-ene, nep-env and nep-res
References: Add references at CitEc

Downloads: (external link) ... y-in-chile&Itemid=87 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to (This is usually a temporary error during hostname resolution and means that the local server did not receive a response from an authoritative server. )

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this paper

More papers in Working Papers from Latin American and Caribbean Environmental Economics Program Contact information at EDIRC.
Bibliographic data for series maintained by Liz Delgado ( this e-mail address is bad, please contact ).

Page updated 2024-07-17
Handle: RePEc:lae:wpaper:201016