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Is one carbon price enough? Assessing the effects of payment vehicle choice on willingness to pay in Sweden

Sonnenschein, Jonas LU and Mundaca, Luis LU (2019) In Energy Research and Social Science 52. p.30-40
Abstract


Existing knowledge suggests that people's willingness to pay (WTP) for climate change mitigation depends not only on personal characteristics but also on the payment vehicle (PV) that is used to elicit WTP. The aim of this research is to investigate policy-relevant differences in WTP between different PVs to support the design of carbon pricing mechanisms. The novelty of this contingent valuation study is the randomized use of four different PVs for the same sample (n = 500), in order to isolate effects of PV choice from effects driven by differences in study context and sampling. The results show that mean WTP differs between PVs. At about EUR 55 per tonne CO ... (More)


Existing knowledge suggests that people's willingness to pay (WTP) for climate change mitigation depends not only on personal characteristics but also on the payment vehicle (PV) that is used to elicit WTP. The aim of this research is to investigate policy-relevant differences in WTP between different PVs to support the design of carbon pricing mechanisms. The novelty of this contingent valuation study is the randomized use of four different PVs for the same sample (n = 500), in order to isolate effects of PV choice from effects driven by differences in study context and sampling. The results show that mean WTP differs between PVs. At about EUR 55 per tonne CO
2
it is highest for a climate surcharge on short distance flights, followed by the climate surcharge on long distance flights (EUR 36), the climate surcharge on fuels (EUR 32) and voluntary offsetting (EUR 14). Statistical tests show that for almost all pairs of PVs the differential effect of PV choice is significant. Moreover, the results illustrate that WTP means are sensitive to changes in the assumed carbon intensity of the respective energy-consuming activities (in particular for air travel). In all, the differential effects of PV choice suggest that a uniform carbon price is inadequate and prioritisation and differentiation are needed in policymaking.

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author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Carbon price, Climate change, Payment vehicle, Sweden, Willingness to pay
in
Energy Research and Social Science
volume
52
pages
11 pages
publisher
Elsevier
external identifiers
  • scopus:85061439941
ISSN
2214-6296
DOI
10.1016/j.erss.2019.01.022
language
English
LU publication?
yes
id
ea8e39c7-7776-48fa-804a-9abdc1198ce6
date added to LUP
2019-02-21 07:40:47
date last changed
2019-03-19 04:05:51
@article{ea8e39c7-7776-48fa-804a-9abdc1198ce6,
  abstract     = {<p><br>
                                                         Existing knowledge suggests that people's willingness to pay (WTP) for climate change mitigation depends not only on personal characteristics but also on the payment vehicle (PV) that is used to elicit WTP. The aim of this research is to investigate policy-relevant differences in WTP between different PVs to support the design of carbon pricing mechanisms. The novelty of this contingent valuation study is the randomized use of four different PVs for the same sample (n = 500), in order to isolate effects of PV choice from effects driven by differences in study context and sampling. The results show that mean WTP differs between PVs. At about EUR 55 per tonne CO                             <br>
                            <sub>2</sub><br>
                                                          it is highest for a climate surcharge on short distance flights, followed by the climate surcharge on long distance flights (EUR 36), the climate surcharge on fuels (EUR 32) and voluntary offsetting (EUR 14). Statistical tests show that for almost all pairs of PVs the differential effect of PV choice is significant. Moreover, the results illustrate that WTP means are sensitive to changes in the assumed carbon intensity of the respective energy-consuming activities (in particular for air travel). In all, the differential effects of PV choice suggest that a uniform carbon price is inadequate and prioritisation and differentiation are needed in policymaking.                         <br>
                        </p>},
  author       = {Sonnenschein, Jonas and Mundaca, Luis},
  issn         = {2214-6296},
  keyword      = {Carbon price,Climate change,Payment vehicle,Sweden,Willingness to pay},
  language     = {eng},
  pages        = {30--40},
  publisher    = {Elsevier},
  series       = {Energy Research and Social Science},
  title        = {Is one carbon price enough? Assessing the effects of payment vehicle choice on willingness to pay in Sweden},
  url          = {http://dx.doi.org/10.1016/j.erss.2019.01.022},
  volume       = {52},
  year         = {2019},
}