Abstract
A wide range of climate change mitigation policies have been developed around the world and these policies have become one of the major concerns, however there is still debate among scientists about what are the main external benefits and how to account for them and prepare effective climate change mitigation policies that might be widely accepted by society in general. One of the main ways to assess external benefit of climate change mitigation in energy sector is to conduct Willingness to Pay (WTP) assessments for climate change mitigation options by households. There are many studies on WTP assessment for climate stability conducted in recent years. The paper surveys the existing literature on WTP for climate change mitigation policy in the energy sector. The aim of the paper is to identify the common variables across a varied set of WTP studies in order to establish a basis for comparison. The key variables selected for analysis of WTP studies for climate change mitigation in energy sector addressed in the paper are: the WTP assessment methods; the main attributes used for comparing alternatives in WTP studies, targeted climate change mitigation policies in energy sector, mathematical model used to estimate WTP, the main socio-demographic factors having impact on WTP for climate change mitigation policies. The analysis of WTP studies for climate change mitigation is grouped in two areas: renewables and energy efficiency measures in households. The paper provides analytical structure for future studies to evaluate the effects of variation in key comparative elements upon WTP.
Highlights
Climate change mitigation policies are the main global environmental policies being implemented in energy policy since the signature of Kyoto Protocol in 2007
The climate change mitigation measures applied by the government should be based on assessment of their social benefits assessment of households willingness to pay for measures to increase energy efficiency or for specific energy efficiency improvements, such as energy saving equipment, renovation and insulation of buildings, modernization of heating and cooling systems and use of renewable energy
The assessment of willingness to pay (WTP) for micro-generation systems based on renewables would allow to assess the social benefit of these climate change mitigation measures and to develop appropriate policy tools for integration of social benefits of these technologies in their promotion schemes to ensure their faster penetration in the market
Summary
Climate change mitigation policies are the main global environmental policies being implemented in energy policy since the signature of Kyoto Protocol in 2007 These policies provide external benefits and it is necessary to assess them in order to justify climate change mitigation actions and various support measures being provided for the main climate change mitigation actions in the energy sector. Integrated assessment models, which combine a physical climate model with an economic growth model, estimate the avoided future climate damages from climate change policies These models have been widely used to determine the benefits of climate policy and by comparing marginal benefits with marginal costs—socially optimal levels of expenditure on climate stabilizing measures [1]. This approach requires assumptions about future population growth, economic activity and technology and linking
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