The objective of our study is to investigate households’ attitudes and willingness to pay (WTP) for the proposed second nuclear power plant in South Africa. Traditional analysis of such data has tended to ignore zero WTP values. A spike model which explicitly accounts for zero WTP is employed. We also test for effect of distance on WTP. The proximity to the nuclear plant dummy is negative and significant in the probit model, which implies that those who are closer to the plant are more likely to state a zero WTP.
Discussions between policymakers about renewable energy have gained momentum in recent years, amid growing recognition of the need for more investment in green energy sources. The question is whether households in developing countries like South Africa will support green energy actions if it comes at an additional cost or whether they are simply arm-chair environmentalist. To assess this, we use the contingency valuation method (CVM) to identify the determinants of support for renewable energy.
The availability of secure energy resources at sustainable quantities and affordable prices is fundamental to South Africa’s current objective of enhancing and sustaining its current growth trajectory. Economic reforms, since the early 1990s, have led to the economy growing at an average rate of almost 5% per annum. A major consequence of this strong growth is the rapid increase in domestic demand for oil energy.