Willingness to Pay for Carbon Offset: A Study on Personal Car Owners in Khulna City

Abstract
Global warming has become a buzzing issue in the present time. Greenhouse gas (GHG) is the main cause behind global warming. Carbon dioxide is a major component of greenhouse gas. Frequent meteorological conditions including high heat, cold, drought, and precipitation, as well as natural disasters are largely caused by the increase in GHG. Worldwide efforts are being made to reduce CO2 emissions and counteract the impact of GHG. Thus, this study aims to examine factors affecting personal car owners’ willingness to pay for carbon offset and preferences for different attributes of carbon offsetting. It is mainly a cross-sectional study which is based on primary data collected from personal car owners of Khulna City. Using Discrete Choice Experiment (DCE) technique the author has surveyed 105 car owners through following systematic random sampling procedure. Descriptive statistics, logistic regression, conditional and mixed logistic regression have been used to attain answers of the research questions. The descriptive analysis suggests that more than half of the respondents are willing to pay carbon offset. In addition to this, average monthly income of personal car owners is around BDT 100,000 and most of the car owners are middle aged people with educational qualification is up to tertiary level. On the other hand, logistic regression result shows that respondents’ education, monthly income, environmental knowledge, attitude, perception and concern have significant positive influence on their willingness to pay for carbon offset. Additionally, age of the respondent negatively affects their offsetting decision. In case of car owners preferences for different attributes of carbon offsetting, conditional and mixed logit results show that personal car owners of Khulna City have significant positive preference for tree plantation program for mitigating the negative effects of CO2. Furthermore, the number of respondent having preference for carbon offsetting attribute increase with the decrease in offset amount. Finally, car owners also have the highest positive marginal willingness to pay for tree planation program. Therefore, the study recommends to take necessary initiatives like- different tree plantation project for neutralizing the effects of GHG from environment.

Key Words: Carbon Offset, Willingness to Pay, Choice Experiment, Personal Car Owners, Khulna City.

JEL Code: Q51, Q52, Q54, Q59

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