Environmental and Resource Economics

, Volume 46, Issue 4, pp 429–458

Distributional Preferences and the Incidence of Costs and Benefits in Climate Change Policy

  • Beilei Cai
  • Trudy Ann Cameron
  • Geoffrey R. Gerdes
Article

DOI: 10.1007/s10640-010-9348-7

Cite this article as:
Cai, B., Cameron, T.A. & Gerdes, G.R. Environ Resource Econ (2010) 46: 429. doi:10.1007/s10640-010-9348-7

Abstract

We explore the relationship between willingness to pay (WTP) for climate change mitigation and distributional preferences, by which we mean individuals’ opinions about who should be responsible for climate change prevention and whether the share of climate change impacts borne by the poor is a cause for concern. We use 1,770 responses to an online stated preference survey. The domestic costs in our survey’s policy choice scenarios are expressed as a set of randomized shares across four different payment vehicles, and the international cost shares are randomized across four groups of countries. We also elicit respondents’ perceptions of the likely regressivity of climate change impacts under a policy of business-as-usual. WTP is higher when larger cost shares are borne by parties deemed to bear a greater responsibility for mitigation, and when respondents believe (and care) that the impacts of climate change may be borne disproportionately by the world’s poor. That WTP for an environmental policy depends on the distributional consequences of the policy is an unsettling result: efficiency assessments are typically assumed to be separate from equity considerations in most benefit-cost analyses.

Keywords

Climate change Distributional preferences Equity Regressivity Stated preference Payment vehicle Construct validity 

JEL Classification

C35 C83 H41 Q51 Q54 

Supplementary material

10640_2010_9348_MOESM1_ESM.pdf (160 kb)
ESM 1 (PDF 160 kb)

Copyright information

© Springer Science+Business Media B.V. 2010

Authors and Affiliations

  • Beilei Cai
    • 1
  • Trudy Ann Cameron
    • 1
  • Geoffrey R. Gerdes
    • 2
  1. 1.Department of Economics, 435 PLC1285 University of OregonEugeneUSA
  2. 2.Payment System StudiesBoard of Governors of the Federal Reserve SystemWashingtonUSA

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