Economic Valuation of Renewable Transport Fuels: Evidence From Solar Fuel Willingness to Pay in Quebec, Canada

ABSTRACT The transport sector is one of the largest contributors to global greenhouse gas emissions, making it a key priority for climate mitigation policies. In this context, renewable fuels represent a promising complementary pathway to transport electrification, particularly due to their compatibility with existing internal combustion engine infrastructure. However, their large‐scale deployment entails significant economic costs that are likely to be transferred to consumers, making public acceptance and willingness to pay (WTP) critical for policy design and implementation. This study estimates Quebec households' WTP for the adoption of renewable fuels, with a particular focus on solar fuels produced through artificial photosynthesis. The analysis is based on the contingent valuation method using a payment card format combined with a dichotomous choice question. Data were collected through an online survey of 367 respondents. To address potential econometric issues arising from zero and protest responses, a two‐step Heckman selection model is employed. In addition, robustness checks explicitly include protest responses in the estimation sample to assess the sensitivity of results to alternative treatment of non‐purchase motivations. This allows for a more nuanced distinction between true zero valuations and objections to the payment vehicle or policy design. The results show a positive but heterogeneous WTP. In the baseline specification excluding protest responses, non‐parametric estimates range from CAD 0.17 to CAD 0.28 per liter, while parametric estimates adjusted for selection bias range from CAD 0.38 to CAD 0.42 per liter. When protest responses are included, non‐parametric estimates decrease to CAD 0.10–0.27 per liter, whereas parametric estimates slightly increase to CAD 0.41–0.45 per liter, indicating the overall robustness of the econometric correction. Econometric findings indicate that the decision to pay is primarily driven by attitudinal factors, particularly climate change perception and trust in government climate policy, whereas the level of WTP is mainly influenced by socioeconomic characteristics and environmental engagement. The significant role of institutional trust and perceived policy credibility highlights the importance of non‐economic determinants in shaping support for energy transition policies. From a policy perspective, the results suggest generally favorable but conditional public acceptance of renewable fuels in Quebec. While they provide indicative support for financing mechanisms such as fuel taxes or dedicated R&D funds, these findings should not be interpreted as direct evidence of political feasibility. Instead, they reflect a stated preference in a hypothetical context, where acceptance is strongly mediated by trust in institutions and perceived policy effectiveness. These elements are crucial for the design of socially acceptable and credible low‐carbon fuel policies.