Inderscience Publishers

Who should pay the bill for promoting green electricity? An experimental study on consumer preferences

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This paper presents an experimental investigation of the individual Willingness to Pay (WTP) for green electricity. The experimental design comprises a public-choice scenario and an individual-choice scenario. It involves three different payment vehicles for the public promotion of renewables: direct tax, indirect tax and CO2 tax. We test for the extent of free-riding, the impact of different payment vehicles on individual WTP and crowding-out effects caused by the public promotion of green electricity. Combined with data collected by means of a supplementary opinion survey, our results indicate that individuals prefer binding collective contributions rather than individual market-driven activities in this field.

Keywords: crowding out, free-riding, green electricity, taxation, WTP, willingness to pay, renewable energy, consumer preferences, public choice, individual choice, direct tax, indirect tax, carbon tax

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