| Summary: | Búrfellslundur, the first wind farm in Iceland, has been proposed by the biggest power company in the country, Landsvirkjun. The proposed wind farm is close to the highlands in Iceland, and will be comprised of up to 67 wind turbines with combined production capacity of 200 MW. Two experimental wind turbines have been operating in the area since 2013 with good results, with an average capacity factor of 44% annually. The purpose of this thesis was to conduct an economic valuation of the environmental impacts of Búrfellslundur by using the contingent valuation method to estimate Icelanders´ willingness-to-pay for preserving the area. The OECD and Working Group 4 of the Master Plan for Nature Protection and Energy Utilization in Iceland have recommended that such economic valuations be conducted for project developments, in order for the full welfare implications of projects to be known and potentially improve Icelandic decision-making. By conducting an economic valuation, the environmental impacts can be represented in monetary terms, equivalent to other costs and benefits of energy projects. A web-based survey was developed and administered by the Social Science Research Institute at the University of Iceland to 1500 Icelanders and the response rate was 46%. Most respondents were not willing to pay for preservation, or 53%, while 30% of the respondents were willing to pay. The mean willingness-to-pay (WTP), including respondents with a genuine WTP of zero, was 12,549 ISK. When scaled up to the Icelandic population of taxpayers, the economic value of preservation was 3.17 billion ISK. These results could have a significant impact on the assessment of social welfare gains or losses of Búrfellslundur, which have not been accounted for before as they show that the environmental impacts could be significant. They are a step towards satisfying the OECD and Working Group 4 requests of incorporating environmental impacts into economic evaluation. Uppi eru áform hjá Landsvirkjun um að reisa fyrsta vindorkuverið á ...
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