Consumer preferences for a green certificate program in South Korea

This study explores whether residential consumers in South Korea are willing to participate in a hypothetical green certificate program. We employ a choice experiment to examine the heterogeneous preferences of South Korean consumers via three different estimation modelsd a mixed logit, a latent class, and a hybrid model that combines both the mixed logit and the latent class models. The mixed logit estimations suggest that solar power is preferred to wind or bio energy but with the greatest heterogeneity. Approximately 67% of respondents indicate a significant preference for a green certificate program in the latent class model specification. Estimates from the hybrid model reveal that respondents who are in favor of a green certificate also prefer solar power and a higher share of renewable electricity, but with significant heterogeneity. Willingness to Pay (WTP) calculations for the hypothetical green certificate range between 9.6USD/month and 10.6USD/month. Our results suggest that a tradeable green certificate program that is open to residential consumers and one that operates distinctly from the prevailing renewable energy certificate (REC) market in South Korea, has the potential of enabling the country attain its renewable energy goals while ensuring global competitiveness and the cost-efficient development of green energy. (c) 2021 Elsevier Ltd. All rights reserved.