Valuing Climate Change Mitigation

Valuing Climate Change Mitigation

Applying Stated Preferences in the Presence of Uncertainty

Sonia Akter and Jeff Bennett

Valuing Climate Change Mitigation discusses the role of uncertainty in valuing the benefits of climate change mitigation policies using contingent valuation and choice experiment techniques. It treats climate change using three dimensions of uncertainty: scenario, policy and preference. Conceptual frameworks are advanced to account simultaneously for these various dimensions of uncertainty. The authors then explore the impact of introducing these uncertainties into benefit estimates for the Australian Carbon Pollution Reduction Scheme.

Chapter 7: The Role of Global Cooperation

Sonia Akter and Jeff Bennett

Subjects: economics and finance, environmental economics, valuation, environment, climate change, environmental economics, valuation


7.1 INTRODUCTION The previous chapter examined whether the simultaneous presence of scenario and policy uncertainty influences the extent of public support for the climate change mitigation actions defined under the CPRS. This chapter investigates the influence of political uncertainty, a special form of policy uncertainty, on individual WTP for climate change mitigation. In addition to the scientific uncertainty analysed in the previous chapter, the lack of global commitment to reducing GHG emissions is a key concern for the effectiveness of unilaterally implemented climate change mitigation measures. The discussion of the data presented in Chapter 5 showed that respondents’ perceptions of the likelihood of success of the CPRS varied significantly between with and without global cooperation scenarios. This implies that the sampled respondents were aware of the relevance of global cooperation in determining the success of climate change mitigation efforts. An investigation is undertaken in this chapter to examine whether guaranteed global cooperation increases individual WTP for the CPRS. The hypothesis is that the mean WTP for the CPRS with guaranteed global cooperation will be higher than the mean WTP without guaranteed global cooperation. The information collected during the CV survey was used for this analysis. Respondents were asked whether they would be willing to pay the offered bid amount if global cooperation could be reached. Global cooperation was defined as a situation where, in addition to the EU countries and Australia, at least three major GHG-emitting countries, that is, the USA, China and India, would implement a similar emissions reduction...

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