Willingness to pay for emissions reduction: Application of choice modeling under uncertainty and different management options

Abstract

This paper presents the results of a choice modeling survey of households in Queensland, Australia to assess values for reductions in national greenhouse emissions by 2020. The study is novel in two main ways. First, labeled alternatives were used to assess whether the types of management options for reducing net emissions (green power, energy efficient technologies or carbon capture) are significant in understanding preferences for reducing emissions. Second, the importance of the level and type of uncertainty involved in reductions is tested. The types of uncertainty include (1) the uncertainty of achieving emissions reduction and (2) the uncertainty of international participation as the percentage of total global emissions covered by international agreements. The results of this survey identified how choice responses vary when the level of uncertainty associated with emissions reduction options is included within choice alternatives.