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Willingness to Pay for Climate Stability


A review article by Evan Johnson and Gregory Nemet, Robert M. La Follete School of Public Affairs at the University of Wisconsin-Madison, on willingness to pay (WTP) for climate policy. This working paper is divided into five sections as follows:

  1. Section 1 describes the characteristics of WTP as an empirical tool for climate stability.
  2. Section 2 discusses literature review on WTP for climate policy, through to social and behavioural aspects.
  3. Section 3 explains calculations used and the results of comparison of various studies.
  4. Section 4 discusses a new research agenda to improve factors for identifying WTP.
  5. Section 5 concludes the study.

Students will learn about WTP in context to climate stability and the need to study it. They will also learn about which factors are commonly used to identify WTP and how they are calculated through empirical assessment. Additionally they will also learn about the challenges of using the current factors in determining the WTP and what can be done to improve its measurement.

Use this tool to help your students find answers to:

  1. What is willingness to pay (WTP)?
  2. How is WTP calculated with regards to climate policy?
  3. What factors are commonly used to define willingness to change and how can they be improved?
About Tool
Tool Name Willingness to Pay for Climate Policy: A Review of Estimates 
Discipline Economics 
Topic(s) in Discipline Climate Change Economics, Capitalism, Cost Benefit Analysis, Tragedy of the Commons, Economic Policy, Willingness to Pay (WTP), Economic Theory, Public Policy, Integrated Assessment Model, Consumer Psychology, Economic Policy
Climate Topic Climate Mitigation and Adaptation, Policy, Politics and Environmental Governance
Type of tool Reading (pp 1 – 32) 
Grade Level Undergraduate
Location Global
Language English
Translation      –
Developed by Evan Johnson and Gregory Nemet, Robert M. La Follete School of Public Affairs at the University of Wisconsin-Madison  
Hosted at Social Science Research Network Website
Access Online/Offline
Computer Skills Basic


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