We know from previous polling that people are reluctant to pay the increased energy prices that will be required under the ETS.
Yesterday the ABS put out some survey results that let us do a revealed preference test on willingness to pay more for greenpower electricity.
In March this year, just under a third of people indicated that they were willing to pay more. But another question on how many are actually paying more came up with a much lower result – 5%. Talk is cheap, greenpower is expensive.
The question about willingness to pay has been asked four times: in 1999, 2002, 2005, and 2008. In the first three surveys willingness to pay was stable on around a quarter of respondents. So the third recorded in 2008 is a clear change.
Yet given the saturation media coverage of climate change issues – I set myself an even bigger task than I realised in going through the results of a daily Google news search for my monitoring of alarmist, denialist and NIMBY stories – it is a clear but small change. There is a major gap between what is required to reduce carbon emissions and what Australians are prepared to do themselves to achieve that reduction.
Andrew Norton 
I would be one of the 27% or so that is happy to pay more under an ETS but do not currently have ‘greenpower’. I also think that is an entirely rational and internally consistent position
I also would be interested to see what proportion of households used greenpower if it was an ‘opt out’ system. — significantly higher than 5% I suspect. (Note: I don’t think it should be ‘opt out’ — I prefer an ETS and if there is still ‘opt in’ greenpower, fine)
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Andrew, in a sense it doesn’t matter how willing people are to pay for an ETS once it is imposed. It may (or may not) be the case that electricity retailers do not offer consumers different “carbon-exposed” products – if this happens, mums and dads consumers won’t be able to choose whether they pay more for their electricity – there would just be a tariff incorporating the carbon permit price.
People may choose to buy a wholly renewable electricity product instead, in which case they would presumeably not be subject to a carbon permit price.
It will be very interesting to see what happens.
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There is a difference between legislation and voluntary action. As is, who knows where the $1.50 I am asked to pay on booking or a green airplane flight will end up, I’m not going to waste my money. If it’s legislated, who cares if I have to pay an extra $10.00.
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An ETS will help solve the collective action problem here – those who are happy to pay but only if other people do too. But taken cumulatively these surveys suggest that everyone else acts there are still large numbers of people who don’t want to contribute enough.
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I could potentially buy green power where I live, but it is marketed especially poorly. As far as I could tell, there was no obvious tangible benefit of choosing it and the salesperson couldn’t tell me the slightest bit of information either (what type of green power, who was going to build it where it wasn’t going to get built anyway etc.). If 50% of people really did pay more, would we get more green power, or would the company selling it just make more profit? I don’t know.
On this note, I’d prefer to invest the difference in (1) green companies or green company floats, or (2) making my house more efficient (e.g., changing over from refrigerative to evaporative cooling). The problem with the ETS as a consumer is that it simply locks you into one way of saving power when you can think of more and potentially better ones.
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The other thing you may want to consider is what percentage of people wouldn’t complain about paying if they knew everyone else would. There’s obviously two question which manipulate the extent of group membership. Asking a question like “would you pay even though no-one else will” is clearly different to “everyone will pay, are you going to complain?”. On this note, a second related issue you might want to consider is to what extent people justify savings based on other actions they do. For example, perhaps there is a group of people out there that use very little carbon already (e.g., don’t own a car, live in an apartment etc.), that think they shouldn’t have to pay but others should. I realize this is illogical, but my bet is that this latter group is quite common.
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“(e.g., don’t own a car, live in an apartment etc.),
That’s me! I’m greener than the greenies.
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THE VIRTUOUS CHILDFREE vs THOSE SELFISH, POLLUTING PARENTS
Andrew, your non-reproductivity is a far greater indicator of your environmental friendliness than are your accomodation and transport choices.
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I’ve never owned a vehicle other than a bike and I live in a unit. I don’t feel virtuous.
I could stand corrected, but I understand that GreenPower is a way for electricity retailers to help procure Renewable Energy Certificates – for which they have an obligation to surrender a certain number of to the Commonwealth each year proportional to their electricity sales. Each renewable energy certificate is created by some renewable electricity generator generating 1 megawatthour of electricity.
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I would be one of the 27% or so that is happy to pay more under an ETS but do not currently have ‘greenpower’. I also think that is an entirely rational and internally consistent position
Economan, I find this comment intriguing and, as you fail to spell out for us mere mortals why you think this position is rational and internally consistent, I have tried to speculate on explanations:
1) You are happy to pay more for clean energy but not unless others do, as they would under an ETS. But couldn’t one apply the same reasoning to a global ETS – ie we in Australia shouldn’t pay more until everyone pays more?
2) You believe (correctly) that there are cheaper ways to reduce emissions than by purchasing ‘Greenpower’, which normally relates to renewable energy rather than low-carbon energy per se. Generally speaking, it is presently cheaper to reduce carbon emissions by switching from coal to gas than increasing, say, wind generation. However, not many people would be aware of this, so why assume they are?
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