Preferences for climate change policies: the role of co-benefits

ABSTRACT

Policies mitigating climate change provide a global public good but are also likely to imply local co-benefits where implemented. This may affect citizens’ preferences for what policy to implement as well as where to implement it. This aspect remains understudied despite its relevance for international climate negotiations, national policies, and the development of voluntary carbon credit markets. The results of a discrete choice experiment show that citizens in five countries (Denmark, France, Germany, Italy and Spain) have quite similar mean willingness to pay for carbon emission reductions and agree on the ranking of policies targeting different sectors. Specifically, policies targeting renewable energy use, are preferred over policies targeting industrial energy efficiency or carbon sequestration and biomass production in forests. Applying follow-up questions shows that concerns over co-benefits, notably air pollution, is linked to preferences for implementation in the home country. In the absence of co-benefits, citizens are indifferent or prefer policies implemented in other countries.

Key policy highlights

• Citizens in five European countries share preferences for climate change mitigation policies, though significant intra-national heterogeneity in preferences exist

• Policies targeting increased use of renewables are preferred over policies targeting improved energy efficiency in the industry.

• Citizens express preferences for policies implemented in their own country. This is associated with their perception of co-benefits. In particular, consideration of reduced air pollution as a side effect of investing in renewable energy and in energy efficiency in the industry are important determinants of preferences for national implementation of policies.

• Preferences for national co-benefits may both enhance policy acceptance and reduce willingness to support policies implemented in other countries. The latter aspect may reduce cost-effectiveness across countries but ease effort-sharing negotiations.

KEYWORDS:

• Carbon emissions
• co-benefits
• willingness to pay
• choice experiment
• cross-country study
• policy acceptability

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 EU’s fit-for-55 plan: https://www.consilium.europa.eu/en/policies/green-deal/fit-for-55-the-eu-plan-for-a-green-transition/.

2 The fact that Baranzini, Borzykowski, and Carattini (2018) did not find an effect of an information treatment emphasizing local co-benefits, is not the same as rejecting that respondents consider co-benefits.

3 The electricity bill as payment vehicle is also used in Aldy, Kotchen, and Leiserowitz (2012) to reveal WTP for climate mitigation policies. As no common EU level taxation scheme exists, this was considered the most coherent payment vehicle across countries – even though energy also comes from other sources than electricity. The payment vehicle was also accepted as realistic among participants in the focus groups.

4 The change in reference category between Tables 4 and 6 explain the differences in the WTP of the ASC.

5 The policies considered had different scope, i.e. the WTP per ton of reduction were highest for a policy promoting energy efficiency.

6 A point raised by a reviewer.

Additional information

Funding

This research was funded by the European Union under EU FP7 [grant number 243950 NEWFOREX].