Public goods and private interests: The role of voluntary green power demand in achieving environmental improvements

This dissertation explores the role of consumer purchasing behavior in providing public, environmental goods. It does so by empirically evaluating one market---voluntary demand for renewable energy. The dissertation addresses the following five research questions: (1) What does early experience with green power marketing tell us about the prospects for this market to deliver environmental benefits? (2) What product design and marketing approaches might be used to increase voluntary demand? (3) What motivates non-residential customers to voluntarily purchase green power? (4) What role might public policy play in the creation of the green power market? (5) What preferences do individuals hold on the most appropriate forms of support for renewable energy?; By helping to answer these questions, this dissertation seeks to better understand the gap between widespread positive attitudes for the environment and an often-anemic response to green product offerings. It contributes to not only the public goods and environmental marketing literatures, but also to contingent valuation methodology and to an emerging literature on the motivations of firms to contribute to environmental causes. The analysis performed is diverse, and includes: a literature review, a mail survey of green power marketers, a mail survey of non-residential green power customers, and contingent valuation and opinion surveys of U.S. residents. Detailed statistical analysis is performed on the data collected from the residential and non-residential surveys.; The analysis reveals that customer participation in green power programs to date has been weak. The possibility that the traditional economic concept of "free riding" may explain this low response is raised, and the dissertation identifies a number of marketing approaches that might be used to partially combat this problem. Analysis of survey data shows that non-residential green power purchases have been motivated principally by altruistic concerns; this finding differs substantially from the extant literature on firm motivations to pursue environmental initiatives. Meanwhile, a mail survey of marketers illustrates the importance of policy in stimulating the green power market. Finally, responses to contingent valuation and opinion surveys show that U.S. residents prefer collective payments for renewable energy over voluntary programs.; Overall, this analysis presents a more nuanced understanding of the "green" market than traditionally offered by neoclassical economics and environmental marketing. Some evidence of free riding is found, but this work also identifies other barriers to the development of the green market. The study concludes that green power marketing may increase renewables supply, but that traditional public policy supports should not be abandoned in the hope that customer-driven markets will take up the slack.