Willingness to Pay Framework

Climate Change Mitigation in Households

Dalia Streimikiene, Asta Mikalauskiene, Dalia Štreimikienė, Asta Mikalauskienė

• Publisher: CRC Press
• Year: 2021
• Print ISBN: 9780367643768
• eBook ISBN: 9781000418224
• Edition: 1
• Topic: Biological Sciences
• Subtopic: Sustainable Development
• Index: Biological Sciences

This book aims to develop a framework for the assessment of population 'preferences in climate change mitigation policies by applying a Willingness to Pay (WTP) approach and presents the results from several case studies in Lithuania on renewable energy generation and renovation in different households. These analyses of climate change mitigation policies and measures, based on the assessment of their effectiveness, provide recommendations for developing innovative measures in other countries. Since public preferences are variable, climate change mitigation policies can change these preferences and allow to form new ones.

Features:

• Analyses social benefits of climate change mitigation measures and their integration methods based on assessment of public preferences.
• Presents several practical case studies on energy needs where the Willingness to Pay framework was applied.
• Discusses climate change mitigation barriers in energy sector and the effectiveness of climate change mitigation policies to overcome them.
• Provides a novel approach for climate change mitigation policies development in households.
• Includes useful information for evaluating and planning policies related to renewable energy investment.

This book is a useful reference for those in the academic, research, and business communities, policy makers, graduate students, and professionals involved with climate change mitigation projects.

1

Assessment of Climate Change Mitigation Benefits and Their Integration in Climate Policies

1.1 Insights of Behavioural Economics in Developing Energy and Climate Policies

Among the many challenges inherent in developing climate change policies, reconciling of immediate local costs with long-term globally distributed benefits must be one of the most difficult tasks. Not surprisingly, the political debate was focused on the former. Discussions on how and to what extent to address climate change have focused almost exclusively on reducing the costs of greenhouse gas (GHG) emissions. But the motivation to adopt climate change mitigation measures and cover certain costs linked with these actions must ultimately come from the idea that climate change mitigation provides benefits to society. These perceived benefits are determined by various elements. There are benefits that depend solely on the individual’s situation. They also spread across borders and are uncertain. These benefits are linked to different perspectives on risk aversion, risk perception, time choice, intergenerational responsibility and ethical motivations. They differ in terms of magnitude and characteristics of avoidable damage in the future.

Energy consumption and energy-efficient investments are closely linked to consumer decision-making and behaviour. These aspects have led to a greater interest in developing policy interventions targeting energy demand and there is great interest among scholars and decision makers in assessing the changes in consumer behaviour in response to these interventions. Behavioural economics can provide new perspectives that can help shape climate change mitigation policies, based on insights on how individuals value opportunities, make decisions and change their behaviour.

It is important to stress that energy policy is not only about climate change mitigation but also how it is closely linked with the security of energy supply and energy affordability. Climate change mitigation policies also have to deal with the problems of expensive and interruptible renewable energy sources (RES). If consumer behaviour can be changed to reduce energy demand or to make energy demand more responsive in time and space to weather-related energy supply shortages, this could make a significant contribution to facilitating the use of renewable energy by climate change mitigation policies. Conversely, failure to address public concerns about security of energy supply or climate change mitigation policies could undermine the achievement of ambitious GHG reduction targets (Pollitt & Shaorshadze, 2011).

Traditionally, the economics is focused on how price changes affect consumer behaviour. Research on behavioural economics and psychology has shown that non-monetary interventions are more conducive than monetary interventions in order to c...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Contents
• Authors
• Acknowledgement
• Introduction
• 1 Assessment of Climate Change Mitigation Benefits and Their Integration in Climate Policies
• 2 Assessment of WTP for Climate Change Mitigation in Lithuania
• 3 Lithuania’s Climate Change Mitigation Policy Related to Energy Consumption in Households
• 4 Barriers to Climate Change Mitigation in the Energy Sector
• 5 Policies to Support Renovation of Multi-Flat Buildings and Address the Energy Poverty of Ageing Societies
• Conclusions
• References
• Index