Valuing environmental benefits through decomposition of willingness to pay for hybrid lighting

The use of inefficient lighting contributes strongly to European greenhouse gas (GHG) emissions. This has been acknowledged by EU policy makers who have enacted various measures to promote energy-efficient technologies. Besides reducing greenhouse gas emissions and thus climate change, this provides fertile ground for innovation within the lighting industry. As a result, hybrid lighting is emerging; a new lighting technology that enables unparalleled lighting quality and electricity savings. This work uses the contingent valuation (CV) method to elicit end-users’ willingness to pay (WTP) for hybrid lighting in a decomposed scenario in which lighting quality and electricity savings effects are valued individually and in a holistic scenario yielding joint benefit valuation. Furthermore, end-user valuations of electricity savings are broken down into the private component monetary savings and the public component GHG emission reductions. The CV data collected from a sample of 570 homeowners and future homeowners were analyzed using Weibull specifications and it was found that the public component of WTP makes up 9% of end-user perceived value of hybrid lighting, corresponding to a WTP of €30.13 per ton of evaded GHG emissions. The sum of the decomposed WTP values equates to the WTP elicited in the holistic scenario and therefore the findings are not subject to the embedding effect that frequently distorts multi-component CV studies. An analysis of demographic variables revealed that education level correlates positively with WTP for environmental benefits