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Are South African consumers arm-chair environmentalists? Implications for renewable energy

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Author(s): 
Nomsa Phindile Nkosi and Johane Dikgang
Publication date: 
October, 2016

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. It is vital that households’ determinants of the additional cost burden associated with renewable energy are assessed, in an effort to win public acceptance of the introduction of renewable energy. The US$966 willingness to pay (WTP) for renewable energy represents a significant premium over generation costs, and signals social acceptance of renewable energy. Most importantly, given the wide degree of heterogeneity in WTP models, a clear message to policymakers and stakeholders is that they need to do more to communicate the economic and environmental benefits associated with renewable energy.

Mercurial Superfly CR7 High
Publication PDF: 
Series title: 
Working paper 638
Classification-JEL: