A new study conducted by New Scientist magazine, Stanford University, and Resources for the Future takes a look at which climate policies Americans will likely support when costs are taken into account. During today's E&ETV Event Coverage, Jeremy Webb, editor of New Scientist, Peter Aldhous, San Francisco bureau chief of New Scientist, Jon Krosnick of Stanford University, and Ray Kopp, senior fellow at Resources for the Future discuss these new findings. The panelists analyze why Americans favor action to reduce emissions in the electricity sector over a cap-and-trade approach.
Jeremy Webb: My name is Jeremy Webb and I'm the editor of New Scientist magazine. I want to just take a couple of minutes to familiarize you with New Scientist. If you don't know us, we used to be a U.K. magazine. We started in 1956, so it's our 50th year this year and we are now the world's best selling weekly science magazine. You should all have a copy of the magazine in the pack as you came in and, also, you can see us on the Web at www.newscientist.com. The full survey details are on the Web and there's an article in here all about it as well.
Now, you might ask what is a British magazine doing funding an opinion poll in the U.S.? Well, there's a simple answer, and that is we're no longer a British magazine. As I hinted earlier, we are an international magazine. We have three editions, one of which is American. We're very much international. We have a bigger reporting team now here in the U.S., sorry, as big a reporting team here in the U.S. as we do in the U.K. So, as an international science magazine, global warming, climate change is a big issue for us. And internationally all eyes, I can tell you, are on the U.S.
There's a widespread understanding around the world that without the U.S. any effort to slow global warming can only ever be a partial solution. Now, we know what the U.S. administration thinks. We know what their policies are. But we were wondering what ordinary Americans are thinking. And that was the motivation behind this survey. So to tell us more you're going to hear from three people. You're going to hear from my colleague Peter Aldhous, from New Scientist; Ray Kopp, from Resources for the Future; and Jon Krosnick from Stanford University. And my job is done. All I had to do was introduce you and I will look after the questions at the end. I suggest we leave questions to the very end, so that we can get the formal proceedings over and then we'll take questions from the floor. When you do ask questions there are some microphones around and also if you'd tell us where you're from when you ask a question please. Peter?
Peter Aldhous: So yes, thanks Jeremy. I'm Peter Aldhous. I'm San Francisco bureau chief with New Scientist magazine. As you can tell from my accent I'm a relatively recent transplant to the United States. I've lived here now for a couple of years, and over that time I've noticed what seems to me to be quite a sea change in attitudes towards global warming in this country. Certainly media interest has mushroomed and the topic now seems to be very much on the political agenda.
So, in that context, I've been particularly struck by a series of recent opinion polls which suggest that really a significant majority of the U.S. public wants to see more action from the federal government on limiting global warming. But when I looked at these polls there seem to be two things that often were missing or certainly weren't explored at great depth.
First was asking Americans exactly what should be done to fight global warming from the various specific policy options are available to us. And second was the question in many of these polls that actually this action may have a cost, and that cost is likely to be passed on to consumers.
So put very simply, I was interested in two very practical questions, how and how much? So New Scientist, over the years, as Jeremy has told you, has taken a very close interest in the debate over global warming, mostly on the scientific side. But this really seemed natural territory in which we could make a contribution. And in this we could have really found no better partners then Jon Krosnick and his team at Stanford University and Ray Kopp from Resources for the Future. Jon's team has extensive experience conducting polls on environmental issues and brought true academic rigor and analysis to the project. Ray's expertise meanwhile, in policy and environmental economics, was crucial to us in determining which policies we would ask people about and how much we would tell them that they might cost.
Now, Ray is going to comment in detail on the specific policies we investigated and tell us, I think, something about the basis for the prices we quoted. Jon has a presentation to give us on the full results and the analysis. But before passing you over to our collaborators I'd first like to urge you to read the article in New Scientist and also to offer you if you up my personal thoughts on the messages that are contained within the poll results.
Now, I'm a journalist. Journalists are possibly somewhat cynical based. And I must admit that I feared when we ran this poll that what we might find was that support for action or any specific action to combat global warming would crumble when we started to mention costs and costs to individuals. Our results are actually more encouraging. Support for specific policies clearly is price-sensitive. But our poll does suggest that specific actions to combat global warming can command majority backing from the U.S. public. Up to point, it seems that Americans will accept paying more for energy if it helps to limit climate change. That's quite a significant message I think. So, for politicians who want to find voter-friendly ways to tackle this issue I think this should provide some comfort.
Looking in more detail, perhaps the most striking result from our poll is that Americans seem rather suspicious of policies that use market forces to help bring down our greenhouse gas emissions. They do not seem to be big fans of emission taxes. And, similarly, seem to have relatively little enthusiasm for what are called cap-and-trade schemes. Instead, our results suggest that the U.S. public seems more likely to support prescriptive regulations, often known as standards or mandates, which tell companies exactly how they must achieve a cut in emissions.
Now, this may simply reflect a lack of trust towards oil and power companies. But it does present a significant challenge, I think, because policies of this type are predicted by many environmental economists to be less cost-effective than those such as cap and trade, which give companies some more choice in how to reduce emissions and rely in part on the market mechanism.
Now, just a little note of caution here, we don't know how much these various policies are going to cost, how much the cost will be of a cap-and-trade scheme against something like a low-carbon standard. But our poll does suggest that it would have to be significantly cheaper to overcome the public's skepticism towards something like cap and trade.
In electricity sector for example, our results suggest that the cap and trade as we described it would only command majority support if a typical household were paying about an extra $6 a month on electricity. A standard requiring companies to generate more electricity in ways that don't emit any greenhouse gases, well, that it seems would enjoy the same popularity, even if it caused a monthly bill to rise by $70 a month.
Now, we're not suggesting that these dollar figures should simply be taken at face value. The true test will only come when the real costs, which as I said, are yet unknown, hit home. But we do hope that these results will provide the springboard for a debate engaging the U.S. public on how to achieve the biggest bang for the buck in the fight against global warming. And I certainly suggest that those economists and policymakers, who support policies like cap and trade as the best way of doing this, have some explaining to do.
Finally, I would just like to say that we hope our poll will stimulate further efforts to take the pulse of the American public opinion on this vital topic. It is by no means the final word. This is, after all, the world's leading democracy and the future of the planet is at stake. So, I hope this isn't the end and we see some more.
Thanks, so I'll pass it over to Ray.
Ray Kopp: Thanks so much Peter. And welcome everyone. Let me just start out by thanking New Scientist magazine for providing Jon and I the opportunity to run this survey. It's always hard finding money to do research, even if its policy relevant research. And it's great for New Scientist to kind of step forward and help us with that, along with the folks who support the climate and technology policy at the Resources for the Future.
Truth in advertising, I am an environmental economist. I do support cap and trade and carbon taxes, just from a kind of DNA perspective here. Jon, as a political psychologist, I don't think he has a preference one way or another about that. But we did want to examine these policies in some detail.
I'm just going to talk a little bit about those, the design of the policies and how we kind of set them up within this survey. Then Jon, who is the real survey expert, will talk specifically about how the survey was put together, how it was administered, and go through those results.
So, the motivation for this stems from some work that Jon and I have been doing for the last, oh, probably at least 10 or 15 years or so with public opinion surveys about individual's preferences for environmental policies and goods provided through environmental policies, whether it's air pollution, water pollution, hazardous waste, or what have you. And what you generally find out is that the American public in general has preferences over those particular kinds of outcomes.
In other words, if you ask them do they think air pollution is important and would they be willing to do something about it? You'd get a yes. Even if you start assigning prices to that, would you pay more for electricity to reduce air pollution? Yes. This is kind of the standard sort of thing you see in public opinion polling.
But when you go down another layer below that you find out that not only to individuals have preferences for these outcomes, now that they can rank those things, you know, air pollution first, water pollution second, something like that. Even with respect to the prices they might have to pay to achieve those particular outcomes. But they care about how the outcome is achieved.
It's like we can do a poll of everyone around here and you would suggest do you think it's important to have better security at airports? And probably everybody would go yes. All right? But you probably care about how that security is going to be undertaken. If it's full strip searches you start to lose enthusiasm pretty fast for these sorts of things. So it's not surprising that people care about the policies and how they're being implemented. That's true, or we assumed that was going to be true for policies that affect climate change.
Right now on Capitol Hill, big debate going on about domestic policies to limit greenhouse gases in the United States. These are mandatory policies. Cap and trade, being talked about an awful lot. Carbon taxes to a lesser extent. But the debate is taking place this week is about standards, CAFE standards for fuel economy in cars, renewable portfolio standards for electricity generation, perhaps renewable low carbon fuel standards for transportation. And these are very different animals than the cap and trade and the carbon tax, particularly from an economic perspective.
There's both theory and the great material of empirical evidence to suggest that the incentive-based approaches are less costly, more economically efficient than the standard approaches. And as a result, for any given amount of cost to the economy you can achieve greater environmental improvement if you choose these economic incentive based approaches. And so the idea was motivated by that fact, the fact that this is a debate that's ongoing in Congress right now.
And the idea was, well, suppose we generate a survey mechanism that allows us to look at the average American's preferences for these particular approaches for dealing with greenhouse gases. And so that's what set this study up.
It turned out to be a little more difficult than we thought when we first came up with the idea, but, again, two different kinds of approaches that we're dealing with. And there's lots of different ways of regulating greenhouse gases, but we're putting them into two different buckets.
One we're calling standards, which are these government mandates. Let's say, for example, energy efficiency standards on appliances or energy efficiency standards on light bulbs or CAFE standards, those things are of the government mandate form. Portfolio standards that's being talked about is a federal renewable portfolio standard for electric power generation, these are mandates that really limit the ability of firms to meet particular goals like greenhouse gas emissions. They are told how to meet those goals in particular ways.
The other side, again, are these incentives-based approaches. Tradable permit systems, you obviously heard about, that's the one that's in place in the European Union right now and is a cornerstone for how the European Union reduces greenhouse gases. And carbon taxes, which try to incentivize behavior within corporations and even households, but without being prescriptive about the activities they ought to undertake to reduce those emissions. So those are the two broad categories that we wanted to look at. What we did though is we had one particular outcome.
So the idea is we're going to have a variety of regulations that people are going to have an opportunity to evaluate, but the outcome is always going to be the same. And the outcome was chosen arbitrarily, a 5 percent reduction in greenhouse gas emissions by 2020 for the United States.
Now, some people may say that's a pretty modest goal, perhaps it is. We didn't really focus on the outcome. We just wanted to control the outcome across all these different policies. And so the respondents were not told what a 5 percent reduction would yield in the way of reduced risks of climate change, only that there's a 5 percent reduction that's going to take place from every single one of these policies. And so in the respondent's own brain they're deciding what effect that's going to have on climate change. And that could vary across every single respondent, but at least it does not vary across the policies. And I think that if this was a 10 percent reduction I don't think it would've made any difference to the results we have.
I think we're pretty sure that the outcome is one of those things that is well controlled. We picked two particular sectors of the U.S. economy then to deal with; transportation, and basically through transportation, fuels, and electricity generation. Greenhouse gas emissions from transportation fuels about a third of all the emissions in the U.S. Electricity generation, about another third. And the idea was that we would pick two standards, one for transportation fuels and one for electricity generation.So if you put that standard in place to get a 5 percent reduction in greenhouse gas emissions from that sector. Well, no, from that sector you get a set of emission reductions that's 5 percent of total U.S. greenhouse gas emissions. And so for each one of these sectors you are having that sector bear all the burden of reducing emissions to hit that particular outcome. And so for electricity generation, if you just focus on electricity generation you are bringing its emissions down by perhaps 15 percent, so that you can get a 5 percent reduction in overall aggregate U.S. emissions. And what we came up with are two standards. One is kind of like a low carbon fuel standard. Basically it's just requirement that more ethanol gets mixed with gasoline, up to about 30 percent ethanol by 2020. And it's just a mandate. Oil companies simply have to do this. Electricity generation is a low carbon portfolio standard, which basically says if you look at the low carbon technologies, nuclear, hydro, wind, geothermal, wave, anything you want out there. You have to increase the amount of those particular technologies. It's about a 35 percent growth in their net generation between now and 2020. And Jon will go through to show you how these things are actually teed up to respondents so you can see the language that respondents actually saw, but those are the two standards. Then for each of those sectors, transportation and electricity generation, there were two more regulatory approaches. So there's a standards approach and then for transportation fuels there was a permit system on the carbon content of fuels. So you could put a cap on the carbon content of the fuels and that cap would force petroleum manufacturers to change a variety of different kinds of things, up to their choosing, to hit that particular cap. And the second one would be a carbon tax on the carbon content of fuels. And a similar symmetric treatment in electricity generation, a permit system for CO2, pretty standard, and a carbon tax for CO2 emissions, again, pretty standard. So, for each sector there are three different policies. One policy is a standard.
The other two policies are these economic incentive-based approaches that are being debated, a carbon tax and a permit trading system. So, there is a total then of six different policies. And these six policies are presented to respondents, and Jon, again, will explain how they're presented and the order and the randomization and what have you. And individuals get to vote on those particular policies. The trick here is that there're costs associated with each of those policies. And so when you think about some respondent getting the standard for this 30 percent ethanol mix, there are three different prices that they might see associated with that, randomly assigned to that respondent. The first price would be that this regulatory policy would raise gasoline prices to $4 a gallon by 2020. You could alternatively get one that says it raises the price to $7 a gallon by 2020, or a very high price of $15 a gallon by 2020.
Now, the carbon tax for the transportation fuels and the permit, the tradable permit for transportation fuels draws from those same three prices. And so, again, they're randomly assigned. So if someone is getting perhaps the first regulatory option they look at, that they're voting on, may indeed be the standard and it may be at $4 a gallon. The second one they're looking at may be a carbon tax and it may also be at $4 a gallon. It just depends on the random draw, but it could be $15 a gallon also. The idea is you randomize these things so that we can control for the variation in people's choices with respect to the dollar values they're facing. And then there's a similar treatment for electricity generation. Electricity generation though is provided individuals in terms of increments in their monthly electricity bill. And so we began with an average electricity bill, about $85 a month, which is the geographic average in the U.S. and we talk about increases from $2 to $10 to $70 a month with respect electricity. Now, the idea was for each of these center points, $7 a gallon and an increase of about $10 a gallon, that center point, we tried to associate that with our best guess at what we think these policies would cost. There's evidence out there and there's empirical literature that looks a carbon tax or perhaps the tradable permit system that you can use as a bit of a benchmark to know what these prices might be, information from models at Resources for the Future or Energy Information Agency. And so we're probably pretty good at predicting the cost of some of those incentive-based approaches. The ethanol requirement of 30 percent, who knows? California is going through an analysis right now of trying to cost out its low carbon fuel standard, but there's no information available yet on that.
And, again, for this fairly aggressive renewable portfolio standard we have, not a lot of information about its particular cost. But I think Jon and I are convinced that within the range of these price variations, from $4 to $15 a gallon, the ethanol standard probably fits within that huge broad range, and, similarly, within $87 to $155 a month for a typical electric bill, I think we encompass the cost of all those particular programs. But, again, our motivation was really not too focus on the prices so much as the preferences that people have for these policies and how they move with respect to these particular prices. So what I'm going to do is I'm going to turn it over to Jon, but, again, I just want to return to the motivation for this study. What we're concerned about is if everything was equal, that is if prices to individuals were the same and they had the choices among these policies, which policies would they rank higher than others? Number one. Second, in the real world all things are not equal. A good deal of evidence suggests that these economic incentive-based policies will be less expensive. So, if they are less expensive, how sensitive then are these individual preference rankings to that price? In other words, if people look at this and they say, "I really like this idea of a mandated fuel standard. And at $4 a gallon, yeah, I'm all for that." When it gets up to $7 a gallon and your carbon taxes are $4 a gallon, and you still get the exact same environmental outcome, do they say, "Well, I'll swallow hard. I really do like this mandate, but if it's going to cost me that much more and I can get the same thing with a carbon tax, I'll go with a carbon tax." Because that's the question that I think is facing Congress right now. They do have to weigh off the efficiency gains of these particular kinds of economic incentive-based approaches, perhaps against the prior beliefs of individuals about the efficacy of those particular programs. Again, the information we have in our survey is not going to allow us to answer that particular question. We don't know the motivation for people's votes. We only know their votes.
So why don't I turn it over to Jon and he'll tell you how this thing actually turns out.
Jon Krosnick: Well, thank you Ray. So, the moment you've been waiting for. How exactly did we do this survey? And what exactly did we find? But before I tell you that, I just want to delay a quick moment to thank Peter and Ray for a fabulous collaboration experience that we've had. There was no reason to imagine that this would go nearly as smoothly as it did and it has gone very nicely. And I especially want to acknowledge two talented folks at Stanford, Matt DeBell and Brent Bannon, who did a lot of the work on making this project work, who also represent an international collaborative team, Matt American and Brent British. So we maintained our cross-oceanic character, even within the Stanford team.
Let's see now. So, let me tell you about the survey data collection first of all and then I'll tell you about the results. You probably know that contemporary surveys are done in three principal ways these days. There are face-to-face interviews being conducted in thousands of homes across the country every month, mainly by the federal government, but in some other contexts as well, a very expensive, but highly accurate way of getting reports from people. More affordable are telephone surveys involving random digit dialing, which gives every household with a listed or unlisted telephone number an opportunity to be in the sample with a known probability. The costs of telephone surveys are rising and that has led to an interest in collecting data via the Internet.
The vast majority of Internet surveys these days are done with nonscientific samples of volunteers of people who choose to do surveys for money. We cannot know the representativeness of those samples because they're not drawn scientifically. But this survey was done by the Internet, by the one company in this country that uses the Internet to draw scientific samples. This is a company called Knowledge Networks. It's based in Menlo Park California and it was, in fact, created by two Stanford professors, Doug Rivers and Norman Nie. And they used an approach that was developed in the Netherlands actually in the 1980s. William Saris there came up with this idea at a time when the world wasn't quite ready for it yet. What he did was literally to knock on the doors of a random sample of Dutch households and offer these households a free Commodore 64 computer. I see a few people appreciate the humor there. A pretty old device and a little modem where you stuck the telephone into the suction cups, if you remember those. And these folks, each week, would complete a survey and modem in the results to the researchers at the University of Amsterdam.
Well, this idea came to the United States in the late 1990s through Knowledge Networks. Now, what they do is to call our representative sample of American households by random digit dialing and to offer these households an opportunity to join their survey panel. Households that do not have computers or Internet access are given that at no cost by the survey firm. They are also paid in exchange for completing a 10 minute questionnaire each week. This is the only American representative national sample on the Internet for research and we used them. The reason we did it is because we wanted to provide respondents with a considerable amount of information, as you'll see in a moment, and we wanted them to have the opportunity to think about that information, at whatever pace they liked, before making decisions. And as you'll see, the idea of reading this script to people over the telephone is possible, but it would've been pretty cognitively demanding. And so we felt the Internet was the preferable way to go.
Now, the survey began with some text that I'd like to read to you, so you get a feel for how did we set this up for respondents. This is directly from the computer screens that these respondents read. In recent decades, people have been putting large amounts of greenhouse gases such as carbon dioxide into the air, mostly by burning gasoline, coal, and natural gas. Most scientists who study the Earth's climate believe that these greenhouse gases trap heat from the Sun on Earth. So these scientists believe that by adding carbon dioxide to the air in recent years, people have been making the Earth warmer. These scientists also say that the Earth will continue to get warmer in the future. If the Earth keeps getting warmer, this could hurt people and nature: scientists say, for example, that there are likely to be more droughts, flooding of coastal areas where people live, more severe storms, and many plants and animals will become extinct. These scientists who study the Earth's climate say that the warming and its effects can be reduced if people put less carbon dioxide into the air in the future.
For this reason, some people in the U.S. federal government are thinking about ways to reduce the amount of carbon dioxide that Americans put into the air. So the logic here is to frame, why would we be asking you these questions and who believes what with regard to the issues. Then we tell respondents, in this survey, we would like to ask for your opinion about six possible ways to do this. You might think they are all good ideas. You might think they are all bad ideas. Or you might think some are good and others are bad. We want to know what you think, so that we can inform policy-makers in Washington about which, if any, of these policies the American public would favor and which they would oppose. And I hope this gives you a sense for the length to which we go to respect respondents, but to provide information and background so that in case they haven't got the full picture they understand where the work is coming from. And also to tell them the purpose of the work they're about to do, why it is they're going to be thinking about and voting on these policies, because their decisions will have real consequences, as in today's meeting here. OK, so after this introduction, we provided to respondents quick summaries of the six policies, in a random order, so that they could get a quick feel for overall what they were going to be reading about. Then we provided longer descriptions of each of the policies, one at a time, and asked respondents to vote in favor of or against each policy at a particular price. Lastly, we had them rank the six policies to give them, after they'd read all six of them, an opportunity to reconsider their preferences and express those. And, lastly, we asked some questions that we use to predict voting behavior, to see which people were more enthusiastic and which people were less enthusiastic.
And so if you're a smart and skeptical consumer of survey data you are now sitting in your chair saying, "OK, this sounds like a pretty demanding set of tasks. I want to see some evidence that respondents were thinking carefully, paying attention, making sensible judgments." And so I will offer some evidence that we used to test exactly that, that assertion, to see whether we should have confidence in these findings. So, let me, again, repeat for you the overview of the policies.
So, the random order that Ray alluded to had two parts. First of all, each respondent was randomly assigned either to read about the vehicle fuels first and electricity second or to read about electricity first and vehicle fuels second. So, about half the sample did each. So there was no preference given order wise to one of these sectors or another. Another random ordering determined whether people read about the low carbon standard first, the emissions tax first or the cap and trade program first. So within the two sectors these three policies were randomly ordered and each respondent read them in the same order for the two sectors.
OK, so now let me give you a quick overview example of how, in some detail, the low carbon standard for vehicle fuels was described to respond. So imagine you're sending at home in front of your computer and this is what you read. So the quick overview is that this low carbon standard would require oil companies to change the way they make fuel for cars and trucks. This will reduce the amount of greenhouse gases put out by vehicles, increase the price of fuel, and cause people to use less of it. That's the quick summary of the policy at the beginning.
Now here's that same policy being described in more detail a moment later. The government could require each oil company to change the way they make fuel. By 2020, 30 percent of the fuel each company sells would have to be a type that produces less greenhouse gases than gasoline. Oil companies can do this by mixing gasoline with ethanol, which is a kind of alcohol usually made from plants. This requirement would cause fuel prices to go up, because oil companies would pass on to their customers the cost of the ethanol, and the cost of setting up their factories to mix the new fuel. The increased price of fuel would also cause people to drive less and/or to buy cars that use less fuel. Compared to current gasoline prices the price of fuel will go up about ten cents per gallon each year until it reaches about $4 per gallon in 2020. Now, you notice it's got 10, 30, 70 and 4, 7, 15, so depending upon which price condition the respondent is randomly assigned to they see one set of numbers. This will reduce the amount of greenhouse gases put out by the U.S. in 2020 by 5 percent. If an election were being held today, 1-2 in vote in favor of this policy or would you vote against it? Now, we could've given you a much, much longer much more detailed description, but we wanted to provide the essence of it with enough detail so that you could make a judgment and compare across the six. OK, so that's the methods.
Here are the results. So let me just give you one quick taste of the fact that this Knowledge Networks survey sample seems to be quite representative of the country when compared with other surveys that we've done recently. Our research team has been working with ABC News and the Washington Post and Time magazine recently to do surveys, the people questions in depth about their opinions on global warming. And the results of those surveys coupled with a couple of earlier surveys we did with federal government support are reported here on the right hand side of this slide. This is simply a question that asked people in much more detail than this wording up here. Saying to people you may have heard about the idea that the Earth's temperature may have been heating up gradually over the last 100 years. This is referred to as global warming. Do you personally think the Earth's temperature probably has been heating up gradually or probably has not been heating up gradually over the last 100 years? And you can see that the percent of people saying they thought it did has increased from 76 percent up to about 84 or 85 percent between 1997 and 2007 in random digit dial telephone surveys we've done.
In this new Knowledge Networks' survey done for New Scientist that percentage is 85 percent, right in there in the same range with the telephone surveys. And this sample looks in many other ways just like we would expect, based on other surveys that have been done. Are people less favorable toward more expensive policies? Well, Ray, being an economist, would say, "I sure hope so, if they're paying any attention, because that's the way they'd behave in the marketplace." And, in fact, in our survey that's true. And I'm showing you this, the same results in a series of ways, graphically to make it easy for you to digest. And the point here is for you just to look at the fact that in each of these six graphs there is a little downward ski slope sort of pattern, not always consistent in a linear fashion, but in every case as the price goes up the number of votes in favor of the policy goes down. In every single comparison. This is true on the electricity side and it's true on the vehicle fuel side. This is the low carbon standard set of policies, the emissions tax, and, at the bottom, the cap and trade. So the first thing for you to notice here is that as price goes up support for the policy goes down. That's what we expect. And that's what we see in the survey. Now, bear in mind, different respondents saw different prices. It's not as if we said to you, "Well, would you vote for it at $4? What about $7?" When you recognize that we're manipulating the policy, no, you just see one price. And different people see different prices and recognize the lower prices as more appealing. Now, what about the appeal of the six policies holding price constant? So, I want to start in this picture with the low price only.
So, what you have here are the low carbon standard, the tax, and the cap and trade option for fuel. And the same, standard, tax, and cap and trade for electricity. And the key finding here is to note the fact that you have 75 percent of Americans voting in favor of the government mandating how electricity is manufactured. That is saying a fixed fraction of electricity must be manufactured from green sources. That's a large number at this relatively low, and yet reasonable, price. The emissions tax still commands majority of support at 60 percent and the cap and trade program as well commands a majority of support at 53 percent. But there is clearly a preference here among our respondents for a program that mandates reduction in greenhouse gas emissions as opposed to methods that rely on the marketplace to produce those as a result of economic incentives. Now, you'll notice that the bars are much less over on the vehicle fuel side of things. That even at the lowest price none of these vehicle fuel increases commanded majority support. And yet that same trend, such that a greater preference is exhibited for a mandate dictating to companies a way that they must reduce emissions is more appealing than other methods.
Now, I'm going to show you two more slides for the medium price and the high price, but the pattern is going to stay exactly same. So what I want you to watch here as I go through this in a sort of dynamic method here is that all of the bars are going to drop. As the price goes up all the bars will get lower. But the shape of the pattern, high, low, lower, highest, lower, lowest is the same. So here's now the medium price and here is the high price. And so even at the highest price the mandated standard for electricity generation commands 50 percent support. So let me go back one more time so you can see, as I go back and forth here, the bars get shorter as the price goes up. But the preference is apparent in each of these cases. So the bottom line is that there is clearly a sensitivity to price, but there's also a preference for mandates as opposed to incentives.
OK, the last thing I want to tell you is about the results of a regression that is intended to assess the extent to which people are actually thinking systematically in making these judgments. So what we did was to simply add up, for each respondent, the number of policies that they voted in favor of. Some people voted in favor of all six, some people voted against all six, and some people voted in favor of some, but not others. And so what we wanted to do was to predict the inclination to vote in favor of these policies. And the first two lines that you see here show statistically significant negative coefficients telling you, in essence, what you've already seen, but with a little bit of a tweak. What we've done here is, for the respondents, knowing where they live and knowing the fact that some respondents live in places with relatively high gasoline prices, others living in relatively low price areas, some people living in areas with high electricity prices and others living in areas with low electricity prices, we adjusted the prices we provided to translate them into the likely impact on their pocketbooks. And in each of these cases, the more money each of these respondents would have to pay for vehicle fuel and electricity the less willing they were to vote in favor of these policies. You know that already. But more interesting is the remaining sets of coefficients. What we found here was that respondents who believed global warming probably had been occurring were considerably more likely to vote in favor of these policies than people who thought global warming probably had not been occurring. And that's a no-brainer. You sure would hope that that would be happening and, in fact, it does. In addition, Knowledge Networks asked their respondents if they would describe themselves as environmentalists or not. And people who described themselves as environmentalists were more likely to vote in favor of these policies than people who didn't. Makes sense. And, by the way, because this is a simultaneous regression, we're holding constant each of these other variables when looking at the effect of any one variable. So that means environmentalists are more likely to vote in favor, even if they all think global warming has been happening and they all will be hit equally by the price and so on.
Now, in addition to that, we found Democrats were slightly more likely to support these policies than Republicans were. And that's not surprising either, of course, because all of the policies involve government intervention into the marketplace. Next, what we found is that people with higher incomes were more likely to vote in favor of these policies. And we're inclined to view this as an indication that the economic hardships imposed by these policies would be lessened for people with higher incomes. By the same token, people with lower incomes would be hit harder. And so that very same price increase would have more impact on them. That makes them more hesitant to support these policies. Interestingly, what we found is that there was more support for all of these policies among young adults than among older adults. And it's very tempting to view that as an indication that adults who figure, you know, by the time global warming effects have any impact I'll be under the ground. I don't see any personal need to support these policies, whereas, those folks who feel more personally vulnerable to actually living with the consequences of global warming may be more likely to support these policies. And, interestingly, even among those old folks, if they're living with children under 18 that makes them more likely to support these policies. Now, certainly those folks have the added expenses of childcare, but it may be that they envision the next generation experiencing the negative effects of climate change and that makes them more supportive of these policies. Lastly, we had an interesting finding that emerged that folks who live in the western region of the United States, including where I live in California, were more inclined, controlling for all these other variables, to support these policies. We've seen this in many other surveys. There seems to be a greater sensitivity to the environment and a greater willingness to pay for environmental protection in the western part of the country. But that deserves much more study in the future. Okay, so quick conclusions for you.
First of all, intervention in the electricity sector seems preferred to intervention over in the vehicle fuel sector. The low carbon standard mandating how companies produce vehicle fuels or electricity seems preferred the most. And carbon taxes preferred moderately, and the cap and trade program preferred the least. So what about future research, because I certainly want to second, very enthusiastically, Ray and Peter's comment that this should not be viewed as the end of the story, but rather the beginning, we hope, of more research along these lines. First, we should certainly consider more policy approaches. We only looked at six. There are many other ways to consider what the public would feel. They might be even more enthusiastic about some other approaches. Secondly, as Ray talked about, our focus here was to hold constant greenhouse gas emissions at a humble 5 percent by the year 2020. You can certainly imagine and some are discussing the idea that we could reduce emissions by much larger percentages and it'd be interesting to see whether public attitudes change as the payoff becomes greater. No doubt the cost will become greater as well. It would be interesting to look at that relationship. No doubt you are thinking, gee, I bet that people's responses to these programs are importantly contingent on how they were described to them. And I'm sure you're right about that. Describing the programs in different ways could very well have produced different results. We could have hired a fabulous Madison Avenue ad agency to tell us how to sell cap and trade most effectively, and we might well have seen more positive attitudes as a result. It is worth looking at the extent to which people's judgments are contingent on those kinds of factors.
What we have found in general is that when you provide people with enough information to make a substance-based judgment the peripherals, whether a famous movie star happens to be endorsing it or not, for example, has relatively little impact, as does the small aspects of the phrasing of questions. Nonetheless, it's interesting just to think about a few very concrete and specific interesting issues we could investigate. So, for example, we told people about a carbon tax. We did not tell people what would happen with the revenue raised by government through that tax. You can imagine describing what would happen to that revenue and you could describe it in different ways. We could, conceivably, see people being more positive about carbon taxes if they saw the results of the tax collection being something that they viewed as positive. Secondly, it may be the case that people are skeptical that programs like cap and trade actually work in a marketplace. And so providing evidence to them that it actually would work might make them less skeptical about it. And, lastly, we could talk about both the costs and benefits of each of the policies beyond those that we discussed, and that might make a difference.
Lastly, I'll just put in a sort of plug for a tweak to results that we have found interesting over the years that maybe Ray and Peter will comment on as we get into questions. The real question I think at the moment is how you take these results and translate them into the policymaking arena? And one interesting illustration was on the front page of newspapers just a couple of weeks ago describing the maybe temporary, maybe permanent death of immigration bill that you heard about announced with such enthusiasm a few weeks before. And the argument that many observers are making is that it died because of public opinion, that even though there was bipartisan support for that legislation, in the end, a relatively small fraction of passionate Americans voiced their views so loudly that they stopped the train from moving dead in its tracks. That can happen in the climate arena as well. But it's not going to happen from the general public. And the survey results I've told you about applied to the general public as a whole. That kind of train stopping effort will happen mainly from individuals who care passionately about this issue, those who are concerned about it and those who are skeptical about it. So it would be interesting to do a similar study to this one focusing only on those individuals who are passionately concerned about the climate issue and the policymaking implications that it has. And we could do that in the future as well.
OK, a final word. I hope that you've gotten a chance, through this presentation and maybe some others that you've heard in the line of research that Ray and I and others have been doing, that social science has some potential value to offer in policymaking debates, that by objective data collection and information provision to representative samples of Americans we can learn about differentiated and thoughtful views that point toward some policy approaches as being more appealing than others. And I, for one, hope that our democratic government takes this kind of information into account as it moves forward to make policy. Thank you.,/p>
Jeremy Webb: Well, thank you very much, all of you, all three. Three very good talks and I'd like to open the panel to questions now. There are also microphones, can I just reiterate, will you tell us where you're from when you get the microphone?
William Weisal: I'm William Weisel. I'm an economist, retired, doing independent research on the climate. I found the study very interesting. I think it has a couple of weaknesses that should be caveats to the policy advice that it conveys. I don't consider this extremely damaging criticism, but it sort of calls for more research. Being a researcher, everyone likes that. But I think that the problems are that partly was on the last slide, about adding a question on what happens to the revenue from taxes. One could also ask the same question about what happens to the revenue if permits under a cap and trade system are auctioned. I think adding that kind of information to a questionnaire could be absolutely crucial for the favorability of incentive based programs. If a tax is portrayed as a switch from one kind of tax to another kind of tax it has a quite different implication than whether it's an additional new tax. And that applies not only to the public, but also to members of Congress and whatnot. Also, on the electricity sector, I found that just looking at the price effects of the various policies the fuel price seemed much higher in percentage terms than the electricity price. And I think part of the reason for that is that there's a lot of heterogeneity among what people's cost of electricity are. For those getting their electricity mainly from coal-fired power plants, the percentage increase in their electricity prices might be much higher than their percentage increases in fuel prices. So, for further work in this area, I would think looking at the individual kind of carbon content of people's electricity and how much their particular prices would rise would be much more important than just taking a general average for the whole country.
Jeremy Webb: Jon, do you want to address that first and then we'll come to Ray?
Jon Krosnick: Go ahead Ray.
Jeremy Webb: We'll go Ray first.
Ray Kopp: Am I on? I mean exactly right. If you look at how we describe the carbon tax and the cap and trade, it is very lean. We haven't undertaken any analysis yet that tries to broaden that explanation at all. And so things like recycling the revenues, I mean interesting to an economist.
I mean I can almost guarantee you that if we said that, by the way, the permit trading system has already been put in place in Europe and has been very effective, which is a true statement, that would change people's preferences. This is just information that they don't have right now. But in some sense the average American is not an awful lot different than the average congressman, because until about three weeks ago when Europeans came over and started to brief U.S. Congress on how the European trading system worked, they didn't think it worked at all. And now all of a sudden they go, oh, well, that worked.
So maybe that gives us some confidence. So it is a matter of accumulating information. And I do think the next step that Jon and I would do on this would be to sit down, with a focus group of individuals, and try to say, "How is the best way to try to explain these policies?" These tax policies and these tradable permit policies, because they are not at all well understood by Congress.
I think one of the reasons that a lot of people in Congress gravitate towards a command-and-control standards kind of approach is because these other things seemed incredibly complicated and, in some sense, feel that they're unreliable because you're just relying on a price mechanism to have all this sort of stuff work out.
The second thing about the pricing of this, it's very hard. So we did take averages, I agree with that. One of the things that striking out of this is people look at this and say, "Well, your gasoline prices are way high relative to your electricity prices." Well, it's easier to get carbon out of electricity sector that it is to get it out of the transportation sector. I mean the cost of a ton of carbon and that transport is an awful lot higher. We could refine that, but I don't think at the end of the day that's going to change these results in it. I mean I think the only thing that would change these results, and the results suggest that there is this underlying preference for command and control. But as an economist, when I look at this, what I think to myself is the most important thing that I want to keep in mind is that preference changes when the prices go up.
And so when you think about the, there's a price for an incentive based approach and there's a preference for the standards approach. The standard has a higher rank at given prices, but as the relative prices begin to change the votes swing in a particular direction. And so the interesting thing to know is if you had a refined estimate of those relative price changes and how that changed your voting behavior, and then you knew how more expensive a command and control was going to be than an economic incentive based approach, you might provide better information to Congress than we have right now. This is just the beginning of this kind of analysis. I don't think we've seen any surveys that have tried to look at these kinds of policies. And we did it in a fashion where we just wanted kind of a first cut response.
But your comments about refinements are right on, and we hope to do that in subsequent work.
Jeremy Webb: Jon, do you want to say something?
Jon Krosnick: No, I also share, I think you're absolutely right, that it would be real interesting to do this sort of work. My guess is that there are certainly things we could do to make the taxes more appealing and we could convince people that cap and trade programs have worked in the past. I'm less certain that in the end they will give up their preference for command and control, because it's the one, at least in a set of options we offered to people, it's the one where they're guaranteed to get specific CO2 reductions. The others rely on the marketplace to produce it and if we haven't done it yet, maybe it wouldn't work.
Trolian Silk: Hi, I'm Trolian Silk, I'm with the University of Maryland University College. I'd just like to make one real quick cynical comment and then ask two questions. The cynical comment is concerning policies E1 and E2 in your first table here. If you look at that, E1 basically says new plants will be required to do this. E2 basically says all plants will be required to do this. It looks like the people in this survey were pretty shrewd. They basically thought if you don't have a whole lot of demand you don't have a whole lot of problems with E1, whereas, E2 affects them immediately. So that's one thing. Second thing, questions. Five percent is the reduction that you're getting, is 5 percent from what you would have with business as usual or 5 percent from today? Business as usual then is what you were asking? OK, I just wanted to be clear about that. And, finally, with table 4 here, if you look at the gasoline cap and trade for table 4, it looks like basically all Republicans, about 20 percent of all Republicans support this gasoline cap and trade. And about 33 percent of all Democrats support the gasoline cap and trade. So there's really no statistical difference with strength of party identification for that policy. Was there any statistical difference with strength of party identification for any of the policies?
Jon Krosnick: Yeah, sorry, the slide is gone. But, yes, as I showed you earlier there is a small effect of party such that Democrats were on average more likely to vote for all of the policies. But you're absolutely right that there is not a big partisan gap on any single policy.
Peter Aldhous: We did look, because we were interested in that. We did want to - because I wondered, is it that the Republicans are going to be particularly opposed to a tax and that the Democrats might be more suspicious of cap and trade? And there were small effect, but I don't think they were significant in the analysis.
Chester Joy: Chester Joy with the Climate Project, which was established by former Vice President Gore to help make people aware of the problem and also is trying to move towards making some presentations about potential options. So, I found this extremely useful and I think Stanford and New Scientist and Resources for the Future, you should be proud of what you've done and hopefully what you're going to do. I was struck by the fact that, by two things, first of all I was enheartened by the lack of politicalization in the attitudes. And, secondly, I was also struck by how modest goals were. And I would urge you to - I hesitate to say get real, but the numbers may be substantially different than people are going to be presented with in reality. So that's something that I would urge you to do. But I did have a question. In your follow-up, which I strongly urge you to do in all of the ways you mentioned, especially the one that you mentioned, and that is the issue of motivation. The fact that command and control is such a persistent desire suggests an issue of political psychology as opposed to cognition. And while I appreciate that you can make it clear to people, maybe this has something to do with fundamental trust of intermediary measures as opposed to simply the guarantee question. And I wonder if you have any speculations at all, and I know that none of you are in the speculation business, but any speculations about motivation that you think would be useful to pursue?
Ray Kopp: You're the political psychologist.
Jon Krosnick: Yeah, well, yeah, I'm happy to comment. In the, whatever it is, 25 years of work I've done studying the American public's views on policy issues, what I've seen over and over again is that it appears that American's judgments are in fact much more often systematically driven by sensible assessments of cost and benefits of policies, than by symbolic attachments and distractions by peripheral cues. My colleagues often differ. There's a lot of news to be made in the political science literature by showing, yet again, how stupid Americans are on this issue or that issue. I don't see the data as supporting those kinds of claims nearly as often as my colleagues do. So, I think in this particular case my guess is that the appeal of the command and control method is one that sort of follows naturally from what are we trying to accomplish here? If we are trying to accomplish CO2 reductions, then here's a proposal whereby an enforcement agency, in this case the federal government, will see to it that this goal is accomplished. That there is a greater sense of confidence people can have in that than to say trust the marketplace, the marketplace works. But at the same time, Ray's point is really an important one. That if, in the end, trust in the marketplace will considerably reduce the cost, while not reducing the likelihood of success, my guess is Americans can be educated about that and may be open to it, but in the end maybe not. Maybe what they'll say is, "Look, I'm willing pay if you guarantee me the outcome I want. What I don't want," maybe people would say, "is a flexible permit trading system where companies can make money from selling permits to each other and, in the end, emissions are just about the same as they were before. They'd find some way to get around the rules, whatever." I'm not saying I know that people think that way, but they might. And so you're absolutely right, I think it would be fascinating to look at it in future work.
Peter Aldhous: Well, as a journalist I'm partly in the speculation business, so I did speculate a little bit that there was some trust issues going on. And I think we know, at the moment, that there seems to be a bit of a - particularly with oil companies and gas prices, I think there's some questions of trust at the moment. And maybe that played into it, I don't know. What interests me is that cap and trade is not just market-based. There's a cap and the cap should provide a guarantee of emissions going down. And, actually, interestingly, it's the one that actually talks about emissions. The mandates don't talk about emissions. They talk about you will do this thing that will have a secondary effect actually of reducing emissions. So it interests me. I was a little bit surprised that there wasn't more support for the cap and trade, because it has an element of a guarantee in it and, actually to my mind, quite a strong element of a guarantee. I mean it would be interesting just to ask people about a cap with no trade. I mean I don't see the point of doing it as a policy, but it'd be interesting to know what people think if you take away the trade. I don't know.
Ray Kopp: Just one observation. One, it would be fascinating to do this in Europe. I mean because they have experience with cap and trade in Europe and it would be interesting to see. And people have a better understanding, I think, of cap and trade in respect to carbon. And so it would be interesting to see whether these results hold up in Europe as strongly as they do in the U.S. Even among people who really understand cap and trade and carbon taxes, among the very cerebral environmental advocates who understand all of those approaches, they even advocate some of those approaches, but they really, in their heart, do distrust the price system as the thing that drives everything. And that's what separates economists from the rest of the world in some sense, is this belief that the price system will get you where you really need to go. And so the idea is, in the back of their brain, well, you know, this carbon tax thing, I just can't believe that the price, that carbon tax alone will bring forth the reductions that we really need. That's why they most more favor a cap and trade, where there's a cap in place. But still, there's this feeling that there's - particularly if you start talking about banking and borrowing provisions and things that kind of give some flexibility, than they'd much rather have a mandate. And not necessarily an old-fashioned command and control, but perhaps an efficiency standard on new generation or something like this. And so, as I say, even among people who understand these, there is this distrust a little bit about the power of a price system in the market to change behavior.
Jon Krosnick: I think it might be helpful just for Ray to say one other word about the following discussion he and I had at one point, and that picks up on Peter's point, which is really important. That the cap and trade system has in it, as Peter pointed out, a cap. The question is whether Americans believe the cap can be enforceable. So, in other words, if the command and control says you must make a certain amount of electricity by sunlight. That's probably not too hard to imagine monitoring that. If you say you must mix a certain amount of ethanol with gasoline, it's not too hard to imagine spot checks of gasoline stations to see whether companies are really doing that. But you can imagine companies having a little exhaust pipe out behind the back, where they sneak out some emissions that nobody knows about. And I'm not saying this is what would happen, but you could easily imagine Americans wondering is the cap enforceable, really? Couldn't you just put them out some way that once they're up there nobody could trace them back to you? So Ray can say a word about that.
Ray Kopp: Well, it's a good point. I mean the only way to kind of get around that, I mean these caps are enforceable, I mean and certainly if you're kind of in a fully upstream carbon situation. You really don't have to measure the carbon dioxide. All they do is measure the fuel going in. And we're very good at measuring fuel going in. So that's why it's been John's experience and mine that whenever you provide these kinds of ideas to people or they have in their mind would that really work or not? And you want to kind of dispel that so they focus on the policy, we usually rely on Norwegians. Right? I mean it works out very well, by saying here is a credible authority that has tried this before and it works very well. That's why I say, I'm sure if you put in this European Union tagline in there, you might change people's perceptions about these. But as I say, it'd be fascinating to do this in the European Union and see whether folks think this thing is a very credible policy vis-à-vis these other policies.
Clay Aug: I'm Clay Aug with EPA's policy office and my comment is sort of similar to what you guys were just saying. But in California there's evidence that they've both reduced costs for consumers and achieved very large savings in energy. So when you lay out these very simple examples people may be influenced by what's a much more sophisticated situation. Where, in fact, standards in the era of conservation, can achieve a lot, not as much as a tax. So that may be influencing people. And this biofuels issue, you know if you listen to government spokesmen today, they're starting to understand the price effects and palm oil price goes up as a result of these biofuel subsidies and mandates and so on. You start seeing huge releases of greenhouse gases on the other side of the world in Indonesia. And people are starting to be aware of that. At the same time, you've got General Motors is running ads that say, "No, no, this is great for the environment." So I think one of the main arguments for the tax is that it avoids this problem of manipulating public opinion or Congressmen not maybe having perfect knowledge as to how to design these programs. So I think you sort of missed a lot of the reason, you know in the discussion so far, for why we - why economists like a tax. It's partly because of the political economy and because of the unit. And also I think it's a challenge for any kind of study like this to get any idea of what the public's thinking, because they may just be - their vision may be much more sophisticated than the information.
Questioner: I think this research is very insightful. I was not surprised so much with the fuel standard, but really surprised a little bit about the electricity side. But my question really goes to the integration because much of the thinking around town and much of the policy debate that goes on recognizes that you might need a portfolio solution. That, yeah, pricing carbon is maybe, through a tax or a cap and trade, is maybe the first step, but it's insufficient. It's necessary, but insufficient. You may have to layer on efficiency standards and mandates and flat out rejections in certain permits. And it's very, very complex, so I can imagine it's going to be difficult to ferret out all of the nuances there. And I'm sure that we won't get it right, but maybe this research moves the ball forward and I would encourage you to try to see how you might look at whether an integration of these approaches - if the public understands that may be necessary.
Jon Krosnick: Certainly an integration of a complex set of portfolio options seems to have the potential to be even more appealing than any one approach. It also has the potential to turn people off in many more ways and so I think it definitely would be worth investigating. And I think, at least for me, I would think about the work that we've done, sort of one policy at a time, being the building blocks for putting portfolios together. Or you might say, well, some of these did pretty well individually. Let's see if we can package them as a group. Others did less well individually. Let's see if we can package them as a group. Let's set those aside, I'm sorry. But I think a key thing that we've seen in human psychology actually comes back from the Gestalt school many years ago. That when you put a portfolio package together it can look very different from the sum of the parts individually. And so I think that's why your perspective is just right, that if you want to pursue portfolios instead, there are a number of goals that need to be met. And by putting this package together we can achieve them all. You find much more support than you would for any one of those individually.
Jeremy Webb: And perhaps I should just mention that in the UK there is a portfolio of different things going on. We are members of the European carbon trading system. We had a tax on gasoline that was going up year by year, but that was stopped by a blockade of the refineries, by truckers. But we also have tax incentives on energy-efficient materials, insulation for housing and that sort of thing. We also have mandates. Energy suppliers, electricity suppliers are obliged to take a certain proportion of their electricity from renewable sources at a higher cost than it would cost from fossil fuels. So, that portfolio system is already operating in Europe. More questions? There's some questions there in the front, chap in the back and then there's a question down in the front here as well when you get the chance. Man in the back.
Alex Stewart: Hi, Alex Stewart with University of Oxford. One argument that I think could be made from this potentially, and I'm curious if you've debated this and thought about the relevance of these data to this argument, is sort of a reaffirmation of this long heard argument, especially in Europe, that Americans just like technological fixes. And Americans are unprepared to pay the real price of carbon and to really make the sacrifices to reduce greenhouse gases and, thus, from these data, one may be able to make the argument that, well, in this sense they're willing to trust the government to set standards rather than leave it up to the market and realizing that the price gets passed down to them.
Ray Kopp: Well, I mean all of the prices get passed down to them, whether it's a market-based or a government mandate. So all of these things, they all face prices. What I thought you were going say is that Americans are predisposed to the technological fix as opposed to what the Europeans would call lifestyle changes. And I think that's absolutely true. You mentioned a lifestyle change in the U.S. and you didn't rule any of these out. So they're certainly more inclined - they like their lifestyle. They want to maintain it. They'll pay something to maintain it and they rely on technology to help them do that. But, again, I think in all these studies I do not want to fixate and I don't want anybody here to fixate on these numbers that says Americans have a willingness to pay. They'd pay $7 a gallon for gasoline, 40 percent. We've designed surveys that try to get at that kind of willingness to pay. This survey is not one of them. This survey was designed to look at the preferences for policies and that's an important distinction. But it's clear, I think, that Americans are willing to pay something for climate change our policies to affect climate change, but they care what those policies are. But as they become more informed, as Congress does, about the character of those policies their views of the policies will change. But, clearly, as these things demonstrate all the time, the cheaper it is the more people are going to be in favor of it. And so if you're looking for ways to reduce greenhouse gases to the greatest extent, as an economist you look at it do it as efficiently as you possibly can because you will have more support for it as those prices go down than if the prices go up.
Jon Krosnick: And a slightly different way to put your comment is to say that the skeptic would have said if you ask a question like should government require electricity to be generated in greener ways, of course, all Americans would say yes. But the minute you tell them, and by the way it will cost you something, the skeptics as - at that moment all public support will evaporate. Well, clearly, we did not see that. We saw majority support for changes in the electricity sector even at very large price increases. And I do think that you're right, that that indicates both a sensitivity price, but also a willingness to pay for these changes.
Jeremy Webb: Gentleman down here. There's one of the back there.
Bill Newman: A follow-up on the last gentleman's question. I'm Bill Newman with the Climate Policy Center. I think that there still is an aversion to transparency of the price signal that is built into the prejudice in favor of government command and control. CAFE, for example, is perceived to be free. If you simply mandate that the auto manufacturers make more efficient cars there's no transparent costs, moreover, you, the individual, in the long run, will benefit. Your car will go more miles for less cost. As opposed to the transparency of a tax or compare for example a cap and trade versus a cap and trade with the safety valve. The safety valve tells you what the cost of each ton avoided is versus a cap, which is just a number that says that this is what we're going to reduce. This may be less of a question than a comment, but I would pose to you how, in your research, how much aversion, I mean, are the American people making a bet that the cost of the mandates is less than the very transparent what it means to them cost of when they sit there and multiply the miles times how much more it is going to be per gallon. I mean that's kind of my question.
Jeremy Webb: Do you have an answer for that Jon?
Jon Krosnick: Well, it's certainly a reasonable question and I guess I wouldn't be surprised if some people were thinking at that level of sophistication among our respondent group. At the same time, we did go to pretty great lengths to say, "Look, there are going to be costs to all of these involved. Here is what it's going to cost you." And so for people to say, "Well, I hear that you're telling me it's going to cost that much, but I'm more confident it's going to cost that much in the tax case or in the cap and trade case, than that it's going to cost me that in the demand and control case." It's possible. It doesn't seem terribly likely to me, but possible.
Questioner: I understand that the major purpose of the survey was not to determine willingness to pay, but have any of you made any calculations as to what the implied willingness to pay would be? My guess is that it is not the same for your two major cases. And if you have made calculations, what did you find?
Ray Kopp: I haven't and I hope Jon hasn't.
Jon Krosnick: No, I haven't and we won't.
Ray Kopp: And I don't think we will, but we haven't done that.
Jon Krosnick: So, maybe we should explain to people what this is, to say you can follow. So the question is, if you aggregate these survey results up you could try to calculate, in total dollars, what's the American public willing to pay for some improvement through some mechanism? And one of the reasons why Ray and I are reluctant to do such a calculation is because in order to make that inference we believe you need to have a series of conditions met in the measurement process that we haven't necessarily. So you have to completely convince people that they will get this particular benefit and that it will only cost them this much. And that the particular mechanism by which you get the 5 percent reduction at the fixed costs should be irrelevant to the judgment. And what we've seen is in this survey is it's not irrelevant. People are more favorable towards some approaches than others. And if we were doing real contingent evaluation to measure willingness to pay in that sense, we would have to conduct a much longer interview where we provided much more information so that the mechanism by which the 5 percent reduction is provided becomes irrelevant and we're simply assessing the value of the improvement in CO2 reduction.
Peter Aldhous: And remember also, we didn't, it was beyond the scope of the survey to talk to respondents about what a 5 percent reduction in projected emissions would mean. I mean it would not mean a lot actually. So, if you're going to do that type of survey I think you really need to have -- my impression is and Ray can speak more to it I'm sure, you need to have much more in the way of if emissions are reduced by such and such, these will be the effects.
Questioner: But since you didn't have the 5 percent in there, we could assume that they ...
Peter Aldhous: It could be done.
Jeremy Webb: OK. Thank you. Gentleman here.
Doug Baker: Check on two quick numbers. Doug Baker, for myself. You said that 85 percent believe the planet is warming up. Then the two follow-on questions would be what percentage believe it's man driven? And what percentage ...
Jon Krosnick: It's in the high 60s.
Doug Baker: High 60s? And what percentage believe it's a bad thing?
Jon Krosnick: It's also in the high 60s.
Doug Baker: OK and then ...
Jon Krosnick: Sorry, let me rephrase. Only about 12 percent of Americans think that human activity has nothing to do with causing the warming. But the remaining, let's say about 88 percent, are split between people who think that it's primarily caused by human activities versus another group that think it's a mix of human and natural processes and both of them are, of course, legitimate. Doug Baker: OK. And then, this is outside of the scope of your study, this is really the other axis. I was just struck by the cognitive disconnect that majority think it's happening. It's a bad thing. But half still buy SUVs or light trucks, minivans. So I guess a different survey would be, or if you just want to talk about this cognitive disconnect, you mentioned it briefly already. If they would promise between now and 2020, given global warming, that they would buy a more fuel-efficient vehicle or they would upgrade their heating and cooling system or something, what percentage would do that?
Ray Kopp: I'm pleased to say that you can take a look online at surveys at Stanford has done with ABC News, Washington Post, and Time magazine that have addressed exactly the issues that you're asking about. And the answer is that people - I'll tell you my personal view of what these data say, is that Americans or, in surprisingly large numbers, favorable toward government either encouraging to tax reductions or requiring businesses to change the way they provide products and services to consumers to reduce emissions on a large scale. Consumers are not very positive going home and changing the light bulbs in their own house in the hopes that that's going to change the planet. And it's hard to blame people if they say, "Look, this sounds like a global level problem. I mean I understand I can help a little bit in my house, but how much can I really do?" And, of course, my colleagues at Stanford, including Steve Schneider, who you may have heard about, are very quick to say that dumping the SUV is not a good idea immediately, because lots of greenhouse gases were emitted in the manufacture of that vehicle and would be emitted in the manufacturing of the replacement vehicle. And, actually, it will take a while before it makes sense, even for the good of the planet, to get rid of the vehicle you've already purchased and are driving. So those kinds of decisions are complicated and it may be that any individual making that kind of change would be doing a bad thing for the planet rather than a good thing overall. So what we see from the surveys is certainly a willingness to take those steps, but much more enthusiasm for government implementing big level changes to produce big level outcomes.
Ray Kopp: OK, last few questions. Is there anybody else out there wants to question? Lady in the second row then please. This is the last question.
Eneslie Fuentes: Enelis Fuentes from American Journal Physical Union. I'm curious about how you funded this study. Also about how you would fund the future studies that we all are very interested in. And the third one is whether any of the political candidates are looking to your results or have they actually approached you?
Jon Krosnick: OK. Funding is easy. The survey was paid for jointly by New Scientist magazine and Stanford University and Resources for the Future made in-kind contributions to the project. So the cash outlays for people's time and the data collection came from our two institutions. In terms of the interest from political candidates, I haven't gotten any phone calls from anybody, but I hope people are paying attention to what we're doing because we're distributing the work pretty broadly and we hope that it has some impact. And I will say, just as a closing note on that, that from the work that we've done on this issue it seems to me that at this moment, and no doubt through the 2008 presidential election, climate change will be an irresistible issue for politicians to talk about, especially for campaign efforts to focus on. Because there are a lot of votes to be won given the fact that the country is nearly unanimous in some of the fundamentals of this issue. Very rarely do we see that. And candidates who get on the side of the big majorities stand to benefit, those who are reluctant to do so stand to lose. And so I expect we'll see more interesting climate and maybe more interest in the survey results to help inform those decisions.
Jeremy Webb: Okay, that's it. Thank you very much everybody. Thanks for coming. I'd just like to say from New Scientist point of view takes to Ray and his colleagues and to Jon and his colleagues. Peter said it earlier, well, I was impressed. A fantastic job. Thank you both very much indeed. Thank you all.
[End of Audio]