Some of the most basic questions about the organization and functioning of society involve issues raised by the existence of public goods. Though the public goods literature can also contribute insights into the potential rationale for renewable energy policies, they leave most of these implications for future work (see Appendix A for a possible research agenda). They emphasize four mechanisms that marketers can use more ยป to increase customer demand for renewable energy. Specifically, the authors highlight the implications of the public goods literature for green power product design and marketing communications strategies. This report reviews current green power marketing activities in the electric industry, introduces the extensive academic literature on public goods, free riders, and collective action problems, and explores in detail the implications of this literature for the green marketing of renewable energy. ![]() By free riding, an individual is able to enjoy the benefits of the public good while avoiding payment. ![]() As with all public goods, there is a risk that few customers will purchase ``green`` power and that many will instead ``free ride`` on others` participation. But renewable energy is not a traditional product because it supplies public goods for example, a customer supporting renewable energy is unable to capture the environmental benefits that their investment provides to non-participating customers. Green power marketing targets these customers under the assumption that they will pay a premium for ``green`` energy products such as renewable power generation. Retail electricity competition will allow customers to select their own power suppliers and some customers will make purchase decisions based, in part, on their concern for the environment.
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