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Discrete-choice experiments valuing local environmental impacts of renewables: two approaches to a case study in Portugal

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Abstract

Despite the often mentioned environmental benefits associated with transition from fossil fuels to renewable energy sources, their use for electricity production has non-negligible negative environmental impacts. The most commonly mentioned in surveys concern different types of landscape impacts, impacts on the fauna and flora, and noise. These impacts differ by size and location of plants, and by source of energy, rendering the policy decision complex. In addition, there are other welfare issues to take into consideration, as positive and negative environmental impacts are not evenly distributed among population groups. This paper proposes to compare the welfare impacts of renewable energy sources controlling for the type of renewable as well as the specific environmental impact by source. To this end, two discrete-choice experiments are designed and applied to a national sample of the Portuguese population. In one case, only individual negative impacts of renewables are used, and in another case, the negative impacts interact with a specific source. Results show the robustness of discrete-choice experiments as a method to estimate the welfare change induced by the impacts of renewable energy sources. Overall, respondents are willing to pay to reduce the environmental impacts, thus making compensation for local impacts feasible. Moreover, the estimations reveal that respondents are significantly sensitive to the detrimental environmental effects of specific renewable energy sources, being willing to pay more to use these sources of energy relative to others.

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Notes

  1. The surveys were administered as part of a broader research project on renewables in Portugal (in accordance with the acknowledgement included in this paper).

  2. As the direction of the preferences is not clear (the parameters may have positive or negative values), the impact attributes are specified as normally distributed. As a conventional procedure, the price attribute will be specified as a fixed or non-random parameter.

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Authors and Affiliations

  1. DEGEIT and GOVCOPP, University of Aveiro, Aveiro, Portugal

    Anabela Botelho

  2. CETRAD and DESG, University of Trás-os-Montes and Alto Douro, Vila Real, Portugal

    Lina Lourenço-Gomes

  3. EEG and NIPE, University of Minho, Braga, Portugal

    Lígia M. Costa Pinto & Marieta Valente

  4. ISCAC, Polytechnic Institute of Coimbra, Coimbra, Portugal

    Sara Sousa

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  1. Anabela Botelho
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  2. Lina Lourenço-Gomes
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  3. Lígia M. Costa Pinto
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  4. Sara Sousa
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  5. Marieta Valente
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Correspondence to Lígia M. Costa Pinto.

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Botelho, A., Lourenço-Gomes, L., Pinto, L.M.C. et al. Discrete-choice experiments valuing local environmental impacts of renewables: two approaches to a case study in Portugal. Environ Dev Sustain 20 (Suppl 1), 145–162 (2018). https://doi.org/10.1007/s10668-018-0169-0

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