External benefits of waste-to-energy in Korea: A choice experiment study

Abstract

Abstract The Korean government has planned to expand a variety of waste-to-energy (WtE) facilities in order to reduce waste disposal, decrease the crude oil imports, and mitigate greenhouse gases (GHGs) emissions. One response to this concern is to measure the external benefits of WtE. To this end, this study attempts to apply a choice experiment (CE) to four attributes or types of benefits such as the improvement of energy security, reduction of GHG emissions, job creation, and extension of landfill life expectancy. A survey of 500 households was undertaken in Seoul, Korea. The trade-offs between price and the four attributes for selecting a preferred alternative are considered in the CE survey and a marginal willingness to pay (MWTP) estimate for each attribute is derived. A nested logit (NL) model is employed in this study, rather than a multi-nomial logit (MNL) model since two specification tests indicate that the NL model outperforms the MNL model. The estimation results for the NL model show that the MWTPs for a 1% increase in energy security, a 1% reduction in GHG emissions, the creation of 10,000 new jobs, and the doubling of landfill life expectancy as a result of expanding WtE facilities is estimated to be KRW 437 (USD 4.5), 1763 (1.5), 598 (0.5), and 89 (0.1) per household per month, respectively. The findings can provide policy-makers with useful information for evaluating and planning WtE policies and projects.