Germany’s Energiewende: A tale of increasing costs and decreasing willingness-to-pay
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Date
2016
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Abstract
This paper presents evidence that the accumulating costs of Germany’s ambitious
plan to transform its system of energy provision – the so-called Energiewende –
are butting up against consumers’ decreased willingness-to-pay (WTP) for it. Following
a descriptive presentation that traces the German promotion of renewable energy
technologies since 2000, we draw on two stated-preference surveys conducted in 2013
and 2015 that elicit the households’ WTP for green electricity. To deal with the bias
that typifies hypothetical responses, a switching regression model is estimated that
distinguishes respondents according to whether they express definite certainty in their
reported WTP. Our results reveal a strong contrast between the households’ general
acceptance of supporting renewable energy technologies and their own WTP for green
electricity.
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Keywords
willingness-to-pay, consequential script, cheap talk