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Policy-Instrument Choice and Benefit Estimates for Climate-Change Policy in the United States

Matthew Kotchen, Kevin Boyle and Anthony A. Leiserowitz

No 17539, NBER Working Papers from National Bureau of Economic Research, Inc

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 2,034 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 percent 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.

JEL-codes: Q4 Q48 Q5 (search for similar items in EconPapers)
Date: 2011-10
New Economics Papers: this item is included in nep-ene, nep-env, nep-reg and nep-res
Note: EEE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published as Energy Policy, Volume 55, April 2013, Pages 617–625

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