INTERNALIZATION OF EXTERNALITIES IN THE PRODUCTION OF ELECTRICITY, A CHOICE EXPERIMENT METHOD

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SHARZEHI GHOLAMALI; JAVIDI ABDOLLAH ZADEH AVAL NARGES

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Journal: ENERGY ECONOMICS REVIEW Year:2011 | Volume:8 | Issue:29 Page(s): 1-29

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Information Journal Paper

Title

INTERNALIZATION OF EXTERNALITIES IN THE PRODUCTION OF ELECTRICITY, A CHOICE EXPERIMENT METHOD

Author(s)

SHARZEHI GHOLAMALI | JAVIDI ABDOLLAH ZADEH AVAL NARGES | Issue Writer Certificate

Keywords

NON-MARKET-VALUATIONQ2

RENEWABLE ENERGYQ1

CHOICE EXPERIMENTQ1

WILLINGNESS TO PAYQ2

CONDITIONAL LOGITQ2

Abstract

Environmental cost–benefit analysis is applied for the evaluation of RENEWABLE ENERGY projects. Since some benefits and costs do not have market values, it is imperative to apply economic valuation techniques in order to estimate them. The need for investment in renewable energies is apparent, considering the earth’s finite resources and their fast depletion. Fossil fuels draw on finite resources, which eventually dwindle, become too expensive or too environmentally detrimental to retrieve. It is of considerable interest to policy makers to know if individuals are willing to pay more for renewable energies rather than for fossil fuel energy.Choice experiment method is applied in the valuation of non-market goods. This paper estimates the WILLINGNESS TO PAY for a hypothetical program that promotes the utilization of renewable energies. Using the CHOICE EXPERIMENT method, we estimate preferences of respondents for electricity produced using RENEWABLE ENERGY resources. Responses to the choice questions show that our respondents favor policies promoting the utilization of renewable energies and strongly approve of the reduction of pollution caused by thermal power plants.Our results, therefore, suggest that consumers are willing to pay a higher price for electricity in order to internalize the external costs of energy security, climate change, and air pollution caused by thermal power plants. On the other hand, these results show that as incomes increase WILLINGNESS TO PAY increases, while the WILLINGNESS TO PAY is negatively associated with age and education has no significant effect on WTP.

Cites

CHOICE MODELING: A NEW APPROACH TO VALUATION OF ENVIRONMENTAL COMMODITY; CASE STUDY: GANJNAMEH, HAMADAN

References

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APA: Copy

SHARZEHI, GHOLAMALI, & JAVIDI ABDOLLAH ZADEH AVAL, NARGES. (2011). INTERNALIZATION OF EXTERNALITIES IN THE PRODUCTION OF ELECTRICITY, A CHOICE EXPERIMENT METHOD. ENERGY ECONOMICS REVIEW, 8(29), 1-29. SID. https://sid.ir/paper/99518/en

Vancouver: Copy

SHARZEHI GHOLAMALI, JAVIDI ABDOLLAH ZADEH AVAL NARGES. INTERNALIZATION OF EXTERNALITIES IN THE PRODUCTION OF ELECTRICITY, A CHOICE EXPERIMENT METHOD. ENERGY ECONOMICS REVIEW[Internet]. 2011;8(29):1-29. Available from: https://sid.ir/paper/99518/en

IEEE: Copy

GHOLAMALI SHARZEHI, and NARGES JAVIDI ABDOLLAH ZADEH AVAL, “INTERNALIZATION OF EXTERNALITIES IN THE PRODUCTION OF ELECTRICITY, A CHOICE EXPERIMENT METHOD,” ENERGY ECONOMICS REVIEW, vol. 8, no. 29, pp. 1–29, 2011, [Online]. Available: https://sid.ir/paper/99518/en

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