Willingness to Pay in Different Countries

by Patrick Quarberg

In an attempt to determine the consumer’s willingness to pay for climate change mitigation, Carlson et al.(2012) conducted a survey in three countries in 2010; China, Sweden, and the United States. In general, they observed that the Swedes tended to be most informed and concerned about the effects of climate change, and thus had a higher willingness to pay (WTP). WTP values were found by asking respondents to pick a number from a matrix that identified the most they would be willing to pay to mitigate climate change. The survey asked respondents how much they would pay for different levels of CO2 reduction, specifically 30%, 60%, and 85% reduction in CO2 emissions. Additionally, if respondents stated that their WTP was higher than $220, they were asked to fill in their actual WTP in an open-ended question. Even if respondents had a zero response at the 30% or 60% level, they were still asked about the next level of reduction. The survey also asked several questions about attitudes toward climate change, including whether climate change could be stopped, or just mitigated.

The results show that a large number of respondents from all three countries believe that global average temperature has risen in the past century, and that humans played some role in that increase. However, the Chinese and the Swedish are more likely to believe that their own country should be actively reducing emissions, even if other countries aren’t. On the whole, Chinese and Swedish respondents were more in agreement about mitigation policy than Americans. An interesting finding is that a much smaller proportion of Americans, compared to the Swedes or Chinese, believe that climate change should be reduced in a place where it is cheapest to do so, rather than in their home country. Additionally, the proportion of climate change skeptics in America was markedly higher than in other countries. In America, as much as 27% of people believed that humans have not affected temperature increase, compared to 6% and 5% in Sweden and China, respectively. However, when it comes to WTP the Swedes have the greatest, and Americans just beat out the Chinese, which is interesting, considering the proportion of skeptics in America. Moving forward, investigations should look into the source of American skepticism to determine why it is so much higher in America than in other countries, as it seems that if more Americans simply believed in climate change, there would be a much greater mean WTP, which would be helpful in mitigating climate change.

Carlsson F., Kataria M., Krupnick, A., Lampi, E., Lofgren, A., Qin, P., Chung, S., Sterner, T. 2012. Paying for Mitigation: A Multiple Country Study. Land Economics. Volume 88, pp. 326-340.

 

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