Cooling the tropics sustainably: Evidence from a choice experiment on energy efficient air conditioners in the Philippines

Energy efficiency of home appliances plays a crucial role in climate mitigation policies, especially considering the increasing energy consumption in developing countries. In countries with high temperatures, such as the Philippines, switching to energy efficient air conditioners (ACs) can substantially contribute to climate mitigation. By conducting a choice experiment survey, we investigated the attributes influencing the decision to purchase energy efficient ACs in the Philippines. Utilising primary data with a broad range of socio-economic characteristics, we find that households have a higher willingness-to-pay (WTP) for energy efficient models. Notably, the WTP for higher energy efficiency levels is sufficiently high to choose efficient ACs, which indicates that running costs are considered important. This finding is connected with the fact that the electricity unit price in the Philippines is one of the highest in the Asian countries. Moreover, regarding preference variability, certain consumer groups, such as AC owners, younger age segments, higher income brackets, and those with higher environmental awareness, displayed a higher WTP. Furthermore, our survey reveals the potential for a significant rebound effect in AC use, particularly among people whose daily AC usage exceeds the sample average. Therefore, these results emphasise the necessity of combining the transition to energy efficient ACs and other policy instruments, such as reducing excessive AC usage and expanding renewable energy. • Choice experiment on energy efficient air conditioners (ACs) in the tropical climate. • Willingness-to-pay (WTP) for higher energy efficiency exceeds the common AC price. • Current AC owners have higher WTP for increased energy efficiency. • Energy efficient ACs cause severe rebound effects, mainly among frequent AC users. • Subsidies for low-income groups and prevention of AC overuse are crucial.