Estimated Willingness to Pay for Green Electricity by Using Contingent Valuation Method

Abstract

Renewable energy sources have been receiving increasing support from the public authorities because of the environmental advantages they procure in comparison with conventional fossil energy sources. However, renewable energy technologies are still immature or have not reached an adequate level of economic performance. Therefore, they cannot yet compete directly with conventional energy technologies. The liberalization of electricity market may appear to be a partial response to this problem by enabling consumers who want to pay for the environmental goods to purchase green electricity directly from a supplier. This solution has been tested in a number of countries (Germany, United States, Netherlands, etc.), and could also be introduced such a solution in Japan if the residential electricity market would be liberalized. This report provides the information about what class of consumers would purchase green power, what would gives them motivation to contribute, and their estimated willingness-to-pay by using contingent valuation method. © 2006, JAPAN SECTION OF THE REGIONAL SCIENCE ASSOCIATION INTERNATIONAL. All rights reserved.