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Subjective Well-Being Approach to Environmental Valuation: Evidence for Greenhouse Gas Emissions

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Abstract

The subjective well-being approach to environmental valuation is applied to analyze the valuation of greenhouse gas emissions with a fairness-adjustment in the valuation exercise. Results indicate that industrialized countries have high willingness-to-pay to reduce emissions. Developing countries differ in their valuations. Results indicate that poor countries have willingness to pay whereas middle income countries indicate willingness to accept payments to reduce emissions. Such high willingness-to-pay of industrialized countries, however, does not imply that they can pay off developing countries in order to continue emitting as usual. Still, the different positions with regard to emissions point to possibilities toward some inter-group payments and transfers system to allow societies to contribute toward global reduction emissions reduction.

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Notes

  1. See also Di Tella and MacCulloch (2006), Kahneman and Krueger (2006), and Frey and Stutzer (2010) for surveys on the subjective well-being researches in economics.

  2. Happiness and life satisfaction are the common measures used in SWB studies. Andrews and Robinson (1991) discuss various measures of well-being.

  3. The Earth’s atmosphere is principally comprised of nitrogen (78%) and oxygen (21%). Argon (0.9%) is the third largest volume of gas in the atmosphere. The remainder of about 0.1% is a mixture of carbon dioxide, methane, nitrous oxide, chlorofluorocarbons, ozone, etc., listed in sequence of proportional shares. The volume of water vapor, which contributes about two-thirds of global greenhouse effect, varies in terms of altitude. There is very little water vapor in the stratosphere but plenty near the Earth’s surface. Naturally occurring water vapor and carbon dioxide create the greenhouse effect that sustains life on Earth. The problem is that the increased volumes of greenhouse gases especially carbon dioxide have, as a consequence, intensified the greenhouse effect, which then leads to climate change.

  4. Or, the results on environmental attitudes could reflect the effects of omitted variables. But Ferrer-i-Carbonell and Gowdy (2007) find that introducing omitted variables do not even alter their results.

  5. Other countries with sizeable greenhouse gas emissions but not included in the paper because data on the attitudinal questions are not available in the World Values Survey 2005 include: Iran, Russian Federation, South Africa, Saudi Arabia, and United Kingdom.

  6. “Great emitter” means having a share of at least 4% of total CO2 equivalent emissions; “major emitter,” a share of 2–3.9% of total CO2 equivalent emissions; and “large emitter,” a share of 1–1.9% of total CO2 equivalent emissions.

  7. “Extremely large population” means having a share of at least 4% of total population; “extra large population,” a share of 2–3.9% of total population; and “large population,” a share of 1–1.9% of total population.

  8. The sum of the absolute values of the coefficients of the upper and of the low income classes may point to income inequality with respect to well-being. For Europe and United States, income inequality is between 0.49 and 0.51; for Asia and Pacific, between 0.32 and 0.35; for Latin America, between 0.65 and 0.68; and for Sub-Sahara Africa, between 0.80 and 0.95.

  9. The World Values Survey does not cover other dimensions.

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Authors and Affiliations

  1. Department of Economics, Ateneo de Manila University, 1108, Quezon City, Philippines

    Edsel L. Beja Jr.

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Appendices

Appendix

Details of the regressions

Table 4 Europe and United States
Full size table
Table 5 Latin America
Full size table
Table 6 Asia and Pacific
Full size table
Table 7 Sub-Sahara Africa
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List of Variables from World Values Survey 2005

V22 All things considered, how satisfied are you with your life as a whole these days? Using this card on which 1 means “completely dissatisfied” and 10 means “completely satisfied,” where do you put your satisfaction with your life as a whole?

figure a

V55 Are you currently (read out and code one answer only)

  1. 1

    Married

  2. 2

    Living together as married

  3. 3

    Divorced

  4. 4

    Separated

  5. 5

    Widowed

  6. 6

    Single

I am going to read out a list of environmental problems facing many communities. Please, tell me how serious you consider each one to be here in your own community. Is it very serious, somewhat serious, not very serious or not serious at all? (Read out and code one answer for each problem):

 

 

Very serious

Somewhat serious

Not very serious

Not serious at all

V 109 Poor air quality

1

2

3

4

I am going to read out a list of environmental problems facing many communities. Please, tell me how serious you consider each one to be here in your own community. Is it very serious, somewhat serious, not very serious or not serious at all? (Read out and code one answer for each problem):

 

 

Very serious

Somewhat serious

Not very serious

Not serious at all

V 111 Global warming or the greenhouse effect

1

2

3

4

V235 (Code respondent’s sex by observation)

  1. 1

    Male

  2. 2

    Female

V237 This means you are ____ years old (write age in two digits)

V238 What is the highest educational level that you have attained? [Note: If respondent indicates to be a student, code highest level s/he expects to complete.]

  1. 1

    No formal education

  2. 2

    Incomplete primary school

  3. 3

    Complete primary school

  4. 4

    Incomplete secondary school: technical/vocational type

  5. 5

    Complete secondary school: technical/vocational type

  6. 6

    Incomplete secondary school: university preparatory type

  7. 7

    Complete secondary school: university preparatory type

  8. 8

    Some university-level education, without degree

  9. 9

    University-level education, with degree

V241 Are you employed now or not? If yes, how many hours a week? If more than one job: only for the main job (code one answer)

 

Yes, has paid employment

 Full time employee (30 hours a week or more)

1

 Part time employee (less than 30 hours a week)

2

 Self-employed

3

No, no paid employment

 Retired/pensioned

4

 Housewife not otherwise employed

5

 Student

6

 Unemployed

7

 Other (write in): ______________

8

V253 On this card is a scale of incomes on which 1 means the “lowest income decile” and 10 means the “highest income decile” in your country. We would like to know in what group your household is. Please, specify the appropriate number, counting all wages, salaries, pensions and other incomes that come in.

figure b

List of Countries from World Values Survey 2005

 

Argentina

Rwanda

Australia

South Korea

Brazil

Sweden

Burkina Faso

Switzerland

Chile

Thailand

China

Ukraine

Ethiopia

United States

Finland

Uruguay

Germany

Vietnam

Ghana

Zambia

India

 

Indonesia

 

Italy

 

Japan

 

Malaysia

 

Mali

 

Mexico

 

Norway

 

Peru

 

Poland

 

Romania

 

List of Variables from World Development Indicators Online

Income = Gross domestic product (GDP) per capita in US$

CO2 = Carbon dioxide gas emissions in thousand metric tons

CH4 = Methane gas emissions in thousand metric tons of CO2 equivalent

HFC = hydroflourocarbons gas emissions in thousand metric tons of CO2 equivalent

N2O = Nitrous oxide gas emissions in thousand metric tons of v equivalent

PFC = Perflourocarbons gas emissions in thousand metric tons of CO2 equivalent

SF6 = Sulfur hexafluoride gas emissions in thousand metric tons of CO2 equivalent

Other = HFC + PFC + SF6 (all in CO2 equivalent emissions)

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Beja, E.L. Subjective Well-Being Approach to Environmental Valuation: Evidence for Greenhouse Gas Emissions. Soc Indic Res 109, 243–266 (2012). https://doi.org/10.1007/s11205-011-9899-1

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