Examining willingness to pay for energy futures in a fossil and renewable energy-rich locale

Abstract

The debate over transitioning from fossil fuels to renewables often focuses on the trade-offs between fossil fuels' economic benefits and the environmental benefits of renewable energy. However, most of the extant literature has focused on the willingness to pay to increase or decrease reliance on a single, specific energy source. We implement a choice experiment in New Mexico focusing on tradeoffs between energy choice, employment, and greenhouse gas emissions within a policy context, controlling for heterogeneity across respondent groups. We find jobs are important across respondents. We also find statistically significant differences in respondent preferences for energy types based on geographic proximity to fossil fuel production and opinion about anthropogenic climate change. In many cases, preference impacts are asymmetric across respondent groups. This suggests that an energy policy with majority support may require a portfolio approach, resulting in an intricate design.