Does Money Grow on Trees? People's Willingness to Pay for Cellulosic Wood Ethanol

Abstract

According to the American Environment Research and Policy Center, America’s dependence on fossil fuels, and the resulting global warming pollution, has been increasing both nationally and at the state level for decades (AERPC, 2009). The Intergovernmental Panel on Climate Change (IPCC, 2007) issued its Fourth Assessment Report in 2007, describing how atmospheric concentrations of carbon dioxide and other greenhouse gases have increased as a direct result of human activity for over one hundred years. Various implications of this increase in greenhouse gases include increases in average air and ocean temperatures, melting of snow and ice, and rising global average sea level. These environmental implications have important negative ecological and economic effects. Educational campaigns, policy initiatives and an increased public interest in alternative energies have led to the beginnings of a shift in this trend of increasing greenhouse gas emissions. Emissions declined in 17 states between 2004 and 2007 due to the use of cleaner and more efficient forms of energy (AERPC, 2009). To continue this decrease in carbon emissions, it is in the interest of researchers and decision makers to expand the clean energy market, where doing so requires an understanding of the public’s preferences and behavior regarding energy consumption. Attitudes are commonly linked to intentions and behavior, and as such, are believed to be an important component of the construction and implementation of various public policy initiatives (Krosnick, 1988; Ritchie & Spencer, 1994; Hini et al., 1995; Kaiser et al., 1999). Attitudes have been directly linked to behavioral change by Loudon and Della Bitta (1993), who state “behavioral change is a function of change in behavioral intentions...changes in behavioral intentions are related to change in attitude” (p.422), and by Bamberg (2003), who maintains that “degree of environmental concern has a direct strong impact on people’s behavior” (p.4). As a determinant of behavior, attitudes such as environmental concern are important to understand if we are to promote alternative energies like biofuels. Understanding whether or not environmental concern affects consumers’ decisions to purchase biofuels will be of great use to policy makers and other groups interested in expanding the emerging biofuels market. On the other hand, consumer perceptions of biofuels are also likely to be important.