Marieta Valente

Using stated preference methods to assess environmental impacts of forest biomass power plants in Portugal

As a renewable energy source, the use of forest biomass for electricity generation is advantageous in comparison with fossil fuels; however, the activity of forest biomass power plants causes adverse impacts, affecting particularly neighbouring communities. The main objective of this study is to estimate the effects of the activity of forest biomass power plants on the welfare of two groups of stakeholders, namely local residents and the general population. To this end, we apply two stated preference methods: contingent valuation and discrete choice experiments, respectively. The former method was applied to estimate the minimum compensation residents of neighbouring communities of two forest biomass power plants in Portugal would be willing to accept. The latter method was applied among the general population to estimate their willingness to pay to avoid specific environmental impacts. The results show that the presence of the selected facilities affects individuals’ well-being. On the other hand, in the discrete choice experiments conducted among the general population all impacts considered were valued, in particular odour and fauna and flora impacts. The results of this study stress the importance of performing an equity analysis of the welfare effects on different groups of stakeholders from the installation of forest biomass power plants, as their effects on welfare are location and impact specific. Policy makers should take into account the views of all stakeholders either directly or indirectly involved when deciding crucial issues regarding the sitting of new forest biomass power plants, in order to achieve an efficient and equitable outcome.

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

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.

When Is Green Too Rosy? Evidence from a Laboratory Market Experiment on Green Goods and Externalities

In a context where sustainable consumption and production need to be encouraged, economic experiments can provide significant insights into how individuals consider environmental externalities in their choices and how public policy can foster the environmental public good. Experimental studies aiming to evaluate market mitigation of externalities through the provision of green goods usually choose to adopt neutral language in terms of framing. Our study implements an incentivized economics experiment to explore how supply and demand consider negative externalities. Furthermore, the study addresses the impact of using non-abstract wording when describing negative externalities. Two types of goods can be produced and bought, namely goods generating negative externalities on other consumers (either labelled as B or brown) and goods that cause no harm to others (either labelled A or green). We conclude that the provision of green goods increases from 18.1% in the abstract frame to 70% in the environmental frame. Framing is, therefore, a relevant variable for the outcome of this experimental market. This has important implications for economic experiments aiming to evaluate pro-environmental behaviours and provide policy orientations for the provision of green goods.