The significant capital cost of installing an anaerobic digester can be offset by government funding and investment groups. Another viable form of funding is by voluntary consumer premiums for renewable energy.
Sanders et. al from Purdue University and The Ohio State University surveyed Ohio consumers’ willingness to pay a premium for renewable energy produced by anaerobic digesters on dairy farms. “Digesters and demographics: Identifying support for anaerobic digesters on dairy farms” was published in the November 2010 Journal of Dairy Science.According to the paper, the researchers used cluster analysis to segment consumers by willingness to pay, age, education, income, self-identified political inclination, and a composite variable that served as a proxy for respondents’ environmental stewardship.
The respondents from the survey were combined into four separate groups: the elders, the youths, the educated wealthy and the liberal environmentalists. These four clusters were the groups that emerged the most consistently. The names for these groups are simply descriptive monikers to more easily discuss the cluster and are in no way an editorial comment on the members of the groups themselves.
The elders averaged 66 years and were the least educated group with an average of 12.5 years of education. They had the lowest income with a mean cluster income averaging $36,700. This cluster was one of the most politically conservative and had one of the lowest environmental stewardship scores; however there was some notable variation in these variables.
The researchers found this group to always have the lowest willingness to pay of all unique clusters for electricity or natural gas. In each case, the group’s willingness to pay was less than half of the average willingness to pay of the sample as a whole.
“It is possible, and indeed likely, that this reluctance was attributed in some part to their relatively low incomes. However, the elders’ low willingness to pay shows little interest in reducing their wealth through voluntary premiums or financial programs as a means to provide support for anaerobic digestion on Ohio dairy farms,” the report said.
The youths were distinguished by their age (mean age of 39) because they fell average in the other categories. They did tend to be more liberal – just left of center in the self-reported scale. They averaged an income of $50,000 per year with a mean education of 13.3 years. The youths consistently had the lowest environmental stewardship score of any of the other clusters.
The youths tended to trend closer to the center regarding willingness to pay. As a result, the researchers deducted that “This group is not currently an attractive cluster to target for support for anaerobic digestion. However, it is worth considering shifts that may occur as these individuals age: better educated members of the group might advance into the educated wealthy cluster whereas some of the more passionate but income-constrained members might move into the liberal environmentalists cluster as time passes.”
The cluster with a mean education of 16.3 years and average income of $135,000 per year was coined as the educated wealthy. They tended towards middle age and were generally more conservative.
Their environmental stewardship scores were in the middle of the range of scores represented, but their willingness to pay values were below the mean values in the sample for both electricity and natural gas dependent variables.
“Potentially, these individuals could just have been premium weary in the sense that they pay or have been asked to pay premiums for numerous other items. However, these individuals do not represent the strongest potential base of support,” the researchers reported.
The cluster of liberal environmentalists was largely defined by its political views and environmental activism. Regarding willingness to pay, two similar subgroups of the liberal environmentalists appeared, one of which was slightly more conservative, better paid, and less environmentally active.
This subgroup appeared specifically in the electricity analysis. Overall, the cluster’s average age was 47.8 years. They had 15.6 years of education and an average income of $77,000 per year.
From a digester support perspective, this cluster was the most important of the four.
“Using willingness to pay as a metric, this group demonstrated the strongest active support for digesters. Furthermore, these individuals had the highest environmental stewardship scores, indicating that they were proactive in their interest,” the researchers said.
“Anecdotally, the members of this cluster are often the most vocally opposed to large dairies. Reaching out to such a group could provide real leverage to large dairies that are in the process of locating and establishing their operations.”
The paper outlines distinctive groups that demonstrate considerable support for anaerobic digestion, enough to be willing to pay a premium for it.
It was identified that the next task is to establish whether it directly translates into support for dairy farms that install digesters. The approving subsets are identifiable, and a directed examination of their willingness to extend acceptance to large dairy farms could establish more positive reception paths for new dairies incorporating the digesters.
A positive link between support for anaerobic digesters and for their use on large dairies could open up a new route for less-contested large dairy farm developments and potential resources to alleviate some of the financial burden of installing and operating a digester. PD
- Progressive Dairyman Midwest Editor
- Email Karen Lee