Contingent valuation method of new and renewable energy as a future alternative in Korea

Abstract

Environmental awareness is increasing all over the world. Concerns about the effects of global warming, such as rising sea levels, are inspiring growing interest in clean energy. The Fukushima nuclear disaster made renewable energy appear to be the main energy source of the future. This paper estimates the value of renewable energy as a substitute for nuclear energy by inferring Korean customers’ willingness to pay (WTP) for it. We use the contingent valuation methodology (CVM) to determine the WTP of renewable energy and thereby estimate its value. We also identify the direct and social factors that influence the WTP and study the relationships between them through multiple regression analysis. The per capita value of renewable energy is found to be 38,921 won, and renewable energy was found to be affected chiefly by ethical factors. Moreover, constructing renewable energy facilities instead of nuclear facilities would require an additional 40 trillion won (approximately), complicating the promotion of renewable energy generation in view of Korea’s public debt. © 2015 SERSC.