Agricultural and Resource Economics (Mar 2024)
Choice modeling approach to evaluate the economic value of renewable energy development
Abstract
Purpose. This research aims to quantify the willingness to pay (WTP) of urban residents in the Mekong Delta for the environmental and social benefits associated with renewable energy projects. By analysing their preferences and priorities regarding renewable energy implementation, this study aims to contribute to the increasing knowledge on the drivers of sustainable energy transitions in developing regions. Methodology / approach. This paper leverages a choice modeling (CM) framework to analyse the economic viability of renewable energy investments in Vietnam. The CM technique is advantageous for its ability to capture individual preferences for complex goods or services characterised by multiple attributes and trade-offs. This enables a detailed assessment of the diverse economic values associated with renewable energy sources, beyond their traditional energy generation capacity, including environmental externalities, social impacts, and potential synergies with other sectors. Results. Residents showed significant WTP for renewable energy initiatives improving landscape aesthetics, wildlife habitats, air quality, and job opportunities. Higher income, education, and knowledge level are positively associated with greater WTP. Younger respondents showed a strong position in favor of renewable energy sources. Households with more children were less likely to support the status quo, and married respondents were more pro-renewable. Perceived community involvement emerged as a significant factor in supporting renewable energy policies. Originality / scientific novelty. This study represents a novel application of CM within the Vietnamese context, providing valuable quantitative data for policymakers and stakeholders. By estimating WTP for specific renewable energy attributes, we inform cost-benefit assessments and support the development of efficient policies for managing renewable energy investments. This data facilitates resource allocation and prioritisation of projects with the highest societal value. Practical value / implications. Our findings underscore the crucial role of public awareness and education in driving renewable energy implementation. Residents with a clear understanding of the benefits demonstrate a higher WTP. Hence, we recommend a multifaceted communication strategy to educate the public about the environmental, social, and economic benefits of renewable energy. This involves utilising diverse channels like community meetings, media outreach, online platforms, and expert engagement to disseminate accurate and engaging information. By fostering knowledge and understanding, we can cultivate a strong public mandate for renewable energy investment, facilitating informed decision-making and accelerating the transition to a sustainable energy future in the Mekong Delta.
Keywords
