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Willingness to Pay for Climate Change Mitigation: Evidence from China

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Abstract:
China has become the largest emitter of carbon dioxide in the world. However, the Chinese public's willingness to pay (WTP) for climate change mitigation is, at best, under-researched. This study draws upon a large national survey of Chinese public cognition and attitude towards climate change and analyzes the determinants of consumers' WTP for energy-efficient and environment-friendly products. Eighty-five percent of respondents indicate that they are willing to pay at least 10 percent more than the market price for these products. The econometric analysis indicates that income, education, age and gender, as well as public awareness and concerns about climate change are significant factors influencing WTP. Respondents who are more knowledgeable and more concerned about the adverse effect of climate change show higher WTP. In comparison, income elasticity is small. The results are robust to different model specifications and estimation techniques.

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JEL Codes: Q54: Climate; Natural Disasters and Their Management; Global Warming, Q41: Energy: Demand and Supply; Prices, Q52: Pollution Control Adoption and Costs; Distributional Effects; Employment Effects, Q21: Renewable Resources and Conservation: Demand and Supply; Prices, Q28: Renewable Resources and Conservation: Government Policy, Q35: Hydrocarbon Resources, R12: Size and Spatial Distributions of Regional Economic Activity

Keywords: Willingness to pay, Climate change, China, Interval regression

DOI: 10.5547/01956574.37.SI1.yli

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Published in Volume 37, China Special Issue of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.

 

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