Valuation Of Environmental Externalities In China’s Biomass Power Generation

With the rapid development of Chinese economy, environmental problems like global warming and air pollution are becoming increasingly prominent, which seriously threat the sustainable development. Biomass is a promising renewable energy, and biomass generation can reduce greenhouse gas (GHG) emission and environmental pollution. Efficient, low-carbon and environmental friendly, it has advantages over the conventional fossil-fueled generations. However, problems are emerging along with the progress of biomass generation industry. The most critical one is the deficiency of quantifying the environmental externalities of biomass power, resulting to insufficient bases for promoting policies. Choice Experiment (CE), as a non-market evaluation approach, has been widely applied to assess the environmental values by foreign researchers, in contrast to few studies with this method in China. CE is able to not only make the overall estimation to the variations of environmental qualities, but also conduct the assessment to every single attribute value of the qualities through the observation to the choices of subjects.Firstly, this study analyzes both the domestic and foreign researching status of environmental externalities, and indicates the superiority of CE in quantification. Secondly, questionnaire was designed based on CE including five attributes of GHG emissions reduction, aid rain alleviation, haze index, toxicity and premium for electricity, and the face-to-face surveys were conducted nationwide. Finally, models of CE are adopted to calculate the residents’Willingness to Pay (WTP) biomass power, and the validities of results are verified.This paper tests the stabilities of respondents’ preferences in the way of setting repeated choice sets. Results demonstrate that only 53% of respondents are steady in preference. Analysis is conducted on the results of both the whole sample (WS) and the stable sample (SS), which the latter comparably possesses with more significance.The results indicate that respondents are willing to pay extra electricity bill for environmental improvement, and the WTPs for different environmental attributes and different types of biomass generation are distinguished. In the whole sample, respondents focus on two aspects of the GHG emission reduction and haze index, and have more WTPs for good of air quality; while in the stable sample, respondents also emphasize the acid rain alleviation besides the GHG emission reduction and haze index. The gross respondent’s WTP to the grade A of environmental quality is 26.67 yuan/month (WS) and 34.42 yuan/month (SS), and 0.2 yuan/kw·h (WS) and 2.26 yuan/kw·h (SS). The highest WTP is for theagricultural and forestry biomass power, and then the biogas power, and the lowest--the garbage incineration power, which are respectively 54 yuan/month,41 yuan/month and 35 yuan/month (WS), and 37 yuan/month,29 yuan/month and 25 yuan/month (SS).