“A convenient truth”: air travel passengers’ willingness to pay to offset their CO2 emissions

By Roy Brouwer, Luke Brander, P. V. Beukering. 2008

322 citations recorded by the source corpus.

Several economic reviews demonstrate the substantial costs related to climate change and consequently call for early action. These reviews, however, have been limited to measuring ‘objective’ risks and expected material damage related to climate change. The ‘subjective’ perceived risk of climate change and society’s willingness to pay (WTP) to avoid these risks are expected to provide an important additional motivation for direct action. We investigate whether and why air travel passengers—an increasingly important source of greenhouse gas emissions—are supportive of measures that increase the cost of their travel based on the polluter pays principle and compensate the damage caused by their flight. Compared to the results of the few previous studies that have elicited WTP estimates for climate policy more generally, our results appear to be at the lower end of the scale, while a comparison to estimates of the social cost of carbon shows that the average WTP estimate in this study is close to the estimated marginal damage cost. Although significant differences are found between travellers from Europe, North America, Asia and the rest of the world, we show that there exists a substantial demand for climate change mitigation action. The positive risk premium over and above the expected property damage cost assessments should be accounted for more explicitly in economic reviews as it will add to the burden of proof of direct action. Measurements of passenger WTP will help policy makers to design effective financial instruments aimed at discouraging climate-unfriendly travel activities as well as to generate funds for the measures directed at climate change mitigation and adaptation. Based on stated WTP by travellers to offset their greenhouse gas emissions, funds in the order of magnitude of €23 billion could be generated annually to finance climate change mitigation activities.

Subfields: Economics and Econometrics, Renewable Energy, Sustainability and the Environment

View Paper: https://www.semanticscholar.org/paper/b94b0dd8847c7474c57078504f295d7714e6cc9e

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

In Renewable Energy, Sustainability and the Environment

Citations in the corpus

Willingness to pay for flying carbon neutral in Australia: an exploratory study of offsetter profiles (2014, methodology): “As argued by Brouwer et al. (2008), domestic frequent flyers have a higher probability to be offsetters than the others.”
Household perceptions of climate change and preferences for mitigation action: the case of the Carbon Pollution Reduction Scheme in Australia (2011, background): “…(Viscusi and Zeckhauser, 2006; Berk and Fovell, 1999), education (Berk and Fovell, 1999; Wiser, 2007), awareness of the impacts of CO2 emissions (Brouwer et al., 2008), perceptions of responsibility for climate change (Brouwer et al., 2008), increases in temperature during the summer and…”
What determines urban households' willingness to pay for CO2 emission reductions in Turkey: A contingent valuation survey (2011, background): “Studies that directly question WTP in relation to global warming, on the other hand, usually address a specific segment of society (such as air passengers; Brouwer et al., 2008).”
Exploring airline passengers’ willingness to pay for carbon offsets (2012, methodology): “Hence, the interval regression model is used for econometric analysis (Brouwer et al., 2008; O’Garra et al., 2007).”
What explains public support for climate policies? A review of empirical and experimental studies (2016, background): “perceived ‘climate benefits’ in explaining support for particular policies (Brouwer et al., 2008; Lam, 2014; Tobler et al., 2012).”
Paying for Mitigation: A Multiple Country Study (2012, unknown): “…Brown 2000; Layton and Levine 2003), obtaining green electricity (Nomura and Akai 2004; Hansla et al. 2008), compensating for air travel emissions (Brouwer et al. 2008), taking mitigation actions (Akter and Bennet 2008), reducing dependence on foreign oil and carbon emissions (Li et al. 2009),…”
Effectiveness, earmarking and labeling: testing the acceptability of carbon taxes with survey data (2017, background): “As shown by Dresner et al. (2006) and Bristow et al. (2010), the acceptability of a given carbon tax design can be influenced by how agents perceive the instrument as effective (see also Brouwer et al. 2008 on a carbon travel tax).”
German car buyers’ willingness to pay to reduce CO2 emissions (2012, unknown): “Brownstone and Train (1999) suggest that the “extra difficulty of estimating a mixed logit” is not necessary if “the ratios of coefficients are adequately captured by a standard logit model” and when “the goal is simply estimation of willingness to pay”.”