TY - JOUR
T1 - Residential willingness to pay for deep decarbonization of electricity supply
T2 - Contingent valuation evidence from Hong Kong
AU - Cheng, Y.S.
AU - Cao, K.H.
AU - Woo, C.K.
AU - Yatchew, A.
N1 - Funding information:
Major funding for this paper comes from the Hong Kong Research Grants Council's General Research Fund (No. HKBU 12401014) awarded to the first author. Additional funding is provided by the Hong Kong Baptist University and Education University of Hong Kong. Without implications, all errors are ours.
Publisher copyright:
© 2017 Elsevier Ltd. All rights reserved.
PY - 2017/10
Y1 - 2017/10
N2 - Motivated by the government's proposed target of reducing CO2 emissions by 30% of the 2005 level in the year 2020, we estimate the residential willingness-to-pay (WTP) for deep decarbonization of Hong Kong's electricity supply, which is heavily dependent on coal-fired generation. Our contingent valuation survey conducted in 2016 of 1460 households yields dichotomous choice data based on the respondents’ answers to a series of closed-ended questions. Such data are less susceptible to the strategic bias that often plagues self-stated WTP data obtained by direct elicitation via open-ended questions. Using binary choice models, we find that average WTP is 48–51%, relative to current bills, if the decarbonization target is achieved via natural gas generation and renewable energy. However, estimated WTP declines to 32–42% when decarbonization entails additional nuclear imports from China. As the projected bill increase caused by the target's implementation is 40%, our WTP estimates support the government's fuel mix policy of using natural gas and renewable energy to displace Hong Kong's coal generation.
AB - Motivated by the government's proposed target of reducing CO2 emissions by 30% of the 2005 level in the year 2020, we estimate the residential willingness-to-pay (WTP) for deep decarbonization of Hong Kong's electricity supply, which is heavily dependent on coal-fired generation. Our contingent valuation survey conducted in 2016 of 1460 households yields dichotomous choice data based on the respondents’ answers to a series of closed-ended questions. Such data are less susceptible to the strategic bias that often plagues self-stated WTP data obtained by direct elicitation via open-ended questions. Using binary choice models, we find that average WTP is 48–51%, relative to current bills, if the decarbonization target is achieved via natural gas generation and renewable energy. However, estimated WTP declines to 32–42% when decarbonization entails additional nuclear imports from China. As the projected bill increase caused by the target's implementation is 40%, our WTP estimates support the government's fuel mix policy of using natural gas and renewable energy to displace Hong Kong's coal generation.
KW - Contingent valuation
KW - Electricity decarbonization
KW - Hong Kong
KW - Residential willingness-to-pay
UR - http://www.scopus.com/inward/record.url?scp=85021838195&partnerID=8YFLogxK
U2 - 10.1016/j.enpol.2017.07.006
DO - 10.1016/j.enpol.2017.07.006
M3 - Journal article
AN - SCOPUS:85021838195
SN - 0301-4215
VL - 109
SP - 218
EP - 227
JO - Energy Policy
JF - Energy Policy
ER -