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Using stated preference methods to assess environmental impacts of forest biomass power plants in Portugal

Anabela Botelho, Lina Lourenço-Gomes (), Ligia Pinto, Sara Sousa () and Marieta Valente ()
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Sara Sousa: Instituto Politéctnico de Coimbra, ISCAC

No 59, NIMA Working Papers from Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho

Abstract: As a renewable energy source, the use of forest biomass for electricity generation is advantageous in comparison with fossil fuels, however the activity of forest biomass power plants causes adverse impacts, affecting particularly neighbouring communities. The main objective of this study is to estimate the effects of the activity of forest biomass power plants on the welfare of two groups of stakeholders, namely local residents and the general population and we apply two stated preference methods: contingent valuation and discrete choice experiments, respectively. The former method was applied to estimate the minimum compensation residents of neighbouring communities of two forest biomass power plants in Portugal would be willing to accept. The latter method was applied among the general population to estimate their willingness to pay to avoid specific environmental impacts. The results show that the presence of the selected facilities affects individuals’ well-being. On the other hand, in the discrete choice experiments conducted among the general population all impacts considered were significant determinants of respondents’ welfare levels. The results of this study stress the importance of performing an equity analysis of the welfare effects on different groups of stakeholders from the installation of forest biomass power plants, as their effects on welfare are location and impact specific. Policy makers should take into account the views of all stakeholders either directly or indirectly involved when deciding crucial issues regarding the sitting of new forest biomass power plants, in order to achieve an efficient and equitable outcome.

Keywords: Forest Biomass; Stated Preference Methods; Contingent Valuation; Discrete Choice Experiments; Environmental Impacts; Public Attitudes (search for similar items in EconPapers)
JEL-codes: C90 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2015-11
New Economics Papers: this item is included in nep-dcm, nep-ene and nep-env
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Published in Environment, Development and Sustainability, October 2016, Volume 18, Issue 5, pages 1323–1337

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Persistent link: https://EconPapers.repec.org/RePEc:nim:nimawp:59/2015

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DOI: 10.1007/s10668-016-9795-6

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