Natural Gas or Algal Reef: Survey-Based Valuations of Pro-Gas and Pro-Reef Groups Specifically for Policy Advising

Abstract

Much energy-related construction causes environmental concern. Sometimes the environmental issue is so huge that it is difficult to make a policy decision even with the assistance of traditional valuation techniques. The third natural gas receiving station at Datan, Taiwan, is one example of this. The construction would be beneficial to energy security, economic development, and particulate matter (PM) 2.5 reduction. However, it would destroy a precious algal reef, which is a habitat for endangered species, biodiversity, and a unique ecological system. Thus, we used willingness-to-pay to show the strength of both pro-energy and pro-ecology opinions specifically to help with decision-making. First, respondents were asked to choose between the gas station and the reef. Then they were asked about their willingness to pay for that choice. We then estimated parametric/nonparametric models—traditional probit, structured probit, and Turnbull—to obtain reliable estimates. We found that the per-person value for pro-gas-station respondents was higher than that for pro-reef respondents, while the percentage of pro-reef respondents was higher than the percentage of pro-gas-station respondents. These results together form a clear policy implication for this case.