Would You Pay $162 More For Cleaner Electricity?

New study finds people willing to pay more for cleaner electricity.

Image
New study calculated how much more consumers would be willing to pay for cleaner electricity.
Depending on how the composition of the U.S. Congress changes in November, policy changes might be possible. Photo:Kreg Steppe (Flickr Creative Commons)
Interview with Yale's Matthew Kotchen on Electricity Rates
Download Audio
Audio Playlist
Interview with Yale's Matthew Kotchen on Electricity Rates

There's been a lot of talk and some political movement toward a national standard for the use of clean energy. But the topic is still rife with politics. Researchers at Yale and Harvard have released a study that says Americans on average would be willing to pay $162 per year in higher electricity bills to fund a national standard requiring that 80% of energy be "clean." 

But "clean" has different meanings for different people.

"When you say clean energy, it's not entirely clear what you mean by clean energy," said Matthew Kotchen who is an associate professor of environmental economics and policy at Yale and co-author of the study. "Some people just think of it as just renewables such as wind, solar or geothermal. Some people would include natural gas because it's cleaner burning than coal and some people would actually include nuclear power because it doesn't produce any greenhouse gas emissions."

The survey asked a variety of "yes or no" questions to respondants who voted on a price increase like a referendum. By using those responses, researchers were able to calculate how much more consumers would be willing to spend.

Another part of the report shows that the current Congress would not pass new energy policies that would increase prices. But they would likely pass under the previous Congress. "Changing the composition of either the House or the Senate by just a few members makes a really big difference in terms of what's possible," said Kotchen.