• Energy Research
• 13. Climate action close

To meet international efforts to prevent climate change, the South Korean government is seeking to transform its main power source from coal to natural gas (NG), which emits less carbon dioxide (CO2) than coal. The government needs information about public preferences for increasing NG-fired generation. Therefore, the purpose of this paper is to provide the government with this information by gathering the data on public preferences for increasing NG-fired generation for reducing CO2 emissions, analyzing these data, and obtaining the implications from the analysis. To this end, a survey of 1000 people, after explaining the merits and demerits of NG-fired power, were asked to determine the proper ratio of NG-fired generation by choosing one of six examples: lower than 10%, 10%–20%, 20%–30%, 30%–40%, 40%–50%, and higher than 50%. An interval data model was employed to deal with the data. The average value of the ratio was estimated to be 26.7% with statistical significance, which is greater than the actual value of 22.2% from 2017. Finally, whether and how much some variables such as education level, age, gender, and income level of the respondent affected their preferences for NG-fired generation were investigated.

Abstract Bioethanol (BE), a renewable energy, is well-known to mitigate the greenhouse gas emissions compared with conventional gasoline. Thus, the Korean government is considering the introduction of a BE mandate in which the legal blend is 5% BE and 95% gasoline (E5) until 2020 in order to expand BE use. We should examine the public acceptability of the introduction, which incurs a rise in the fuel price. This study attempts to assess the public's willingness to pay (WTP) a premium for introducing the E5 program in Korea. To this end, a contingent valuation (CV) survey of 1000 randomly selected consumers was conducted in 2014 across the nation. We used a one-and-one-half-bound dichotomous choice question in the CV survey and applied the spike model to handle the WTP data with zeros. The mean WTP, a premium for the E5 per liter, is estimated to be KRW 290 (USD 0.27), which is statistically meaningful at the 1% level. This value amounts to 15.6% of the gasoline retail price in 2014 (KRW 1856 or USD 1.70) and can be interpreted as the external benefit of BE. We can conclude that gasoline consumers in Korea are ready to pay a significant premium for the E5.

Asian dust (AD), a seasonal phenomenon in East Asia, refers to dust winds that blow from inland China and the Gobi Desert. Generally, AD occurs in the spring, but due to climate change and the desertification of AD sources, it has recently started occurring in every season except for midsummer. The occurrence of AD adversely affects human health and damages various industries. Accordingly, the Korean Meteorological Administration has provided an AD forecast service to minimize damage. The most essential part of providing the AD forecast service is the Asian Dust Aerosol Model (ADAM). This study tries to provide useful information for policymaking and research and development by deriving the economic value of ADAM improvement. To this end, a choice experiment (CE) was applied. The CE can derive the marginal value of or the marginal willingness to pay (MWTP) of improvement in attribute. All the MWTP estimates obtained in this study were statistically significant. The household MWTP estimates for a 1% improvement in ADAM accuracy and a one-level subdividing were obtained as USD 0.04 and USD 0.12 per household. This finding indicates that people have a greater preference for improving AD forecast segmentation than for improving ADAM accuracy.

This paper attempts to investigate the short- and long-run causality issues among oil consumption, CO2 emissions, and economic growth in the Philippines by using time series techniques and annual data for the period 1965–2012. Tests for unit root, co-integration, and Granger-causality tests based on an error-correction model are presented. Three important findings emerge from the investigation. First, there is bi-directional causality between oil consumption and economic growth, which suggests that the Philippines should endeavor to overcome the constraints on oil consumption to achieve economic growth. Second, bi-directional causality between oil consumption and CO2 emissions is found, which implies that the Philippines needs to improve efficiency in oil consumption in order not to increase CO2 emissions. Third, uni-directional causality running from CO2 emissions to economic growth is detected, which means that growth can continue without increasing CO2 emissions.

Abstract This paper investigates the short- and long-run causality issues between electricity consumption and economic growth in Korea by using the co-integration and error-correction models. It employs annual data covering the period 1970–2002. The overall results show that there exists bi-directional causality between electricity consumption and economic growth. This means that an increase in electricity consumption directly affects economic growth and that economic growth also stimulates further electricity consumption.

Heat accounts for about one-third of the final energy use and it is mostly produced using fossil fuels in South Korea. Thus, heat production is an important source of greenhouse gas emissions. However, using renewable heat that is directly produced from renewable energy, such as bioenergy, geothermal, or solar heat can save energy and reduce greenhouse gas emissions, rather than transforming conventional fuel into heat. Therefore, an energy policy for renewable heat urgently needs to be established. It is such situations that this paper attempts to assess the consumers’ additional willingness to pay (WTP) or the price premium for renewable heat over heat that is produced from fossil fuels for residential heating. To that end, a nationwide contingent valuation survey of 1000 households was conducted during August 2018. Employing the model allowing for zero WTP values, the mean of the additional WTP or premium for one Gcal of heat produced using renewable energy rather than fossil fuels was estimated to be KRW 3636 (USD 3.2), which is statistically meaningful at the 1% level. This value represents the price premium for renewable heat over heat that is based on fossil fuels. Given that the heat price for residential heating was approximately KRW 73,000 (USD 65.1) per Gcal at the time of the survey, the additional WTP or the price premium corresponds to about 5% of that. When considering that the cost of producing renewable heat is still significantly higher than the cost of producing fossil fuels-based heat, more efforts to lower the production costs of renewable heat as well as financial support of the government for producing and supplying renewable heat are needed to ensure residential consumers’ acceptance of renewable heat.

Renewable energy receives particular attention in Korea because of concerns about climate change and scarce traditional energy resources. The government plans to enhance photovoltaic (PV) power’s share of total power generation from 0.5% in 2014 to 10.1% in 2029. The present study tries to look into the public willingness to pay (WTP) for increasing PV power generation, applying the contingent valuation approach. A survey of 1000 interviewees was carried out in Korea. The observations of the WTP responses were gathered using a dichotomous choice question and analyzed employing the mixture model. The mean household WTP estimate is obtained as KRW 2183 (USD 1.9) per month, which possesses statistical significance. The total yearly WTP expanded to the population is worth KRW 476.9 billion (USD 423.1 million). These values can provide a useful basis for policy-making and decision-making about the economic feasibility of increasing PV power generation.

Abstract The utilization of renewable energy sources for hydrogen production is attracting attention regarding a sustainable future energy system. The South Korean Government aims to develop and commercialize marine biological hydrogen (MBH) technology, which produces hydrogen using marine hyperthermophilic archaeons. The purpose of this study is to perform an economic evaluation of MBH technology based on households’ mean willingness to pay (WTP). The contingent valuation method and cost–benefit analysis are used as methodologies for detailed analysis. The results show that the mean WTP estimate is KRW 2508 (USD 2.14) per household per year, but the ratio of households with zero WTP is considerable. The net present value and the benefit–cost ratio of MBH technology development are KRW 169.04 billion (USD 144.35 million) and 5.65, respectively, proving the high economic feasibility of the technology. Several implications for future decisions on MBH technology are provided based on the results.