Willingness to Pay for Emission Reductions with E85

This study examines consumers' WTP for reductions in greenhouse gas emissions from E85 as opposed to gasoline. Data were collected via a contingent choice exercise in a 2009 national online survey. As part of the fuel choice exercise, several fuel attributes were allowed to vary including emission reductions, import level, proximity of fuel availability, price, and fuel blend (E85 or regular gasoline). A random parameters model with demographics and attitudes interacted with emission reductions was estimated. The resulting estimates suggest that, overall the WTP for an emission reduction is not statistically significant. However, for some demographic and attitudinal profiles, the WTP is significant. An example profile includes younger age, female, concerned about climate change, not supportive of additional drilling, supportive of farmland being used for fuel, own or are likely to own a FlexFuel vehicle, and primary vehicle not an SUV.