Advertisement

Carbon Tax and its Short-Term Effects in Italy: An Evaluation Through the Input-Output Model

  • Ignazio Mongelli
  • Giuseppe Tassielli
  • Bruno Notarnicola
Part of the Eco-Efficiency in Industry and Science book series (ECOE, volume 23)

Economists and policy makers refer to carbon tax as an efficient instrument to control CO2 emissions, but concerns about possible negative effects of its implementation, as for instance the loss of competitiveness on the international market, have been expressed.

In the present chapter the IO model is used to estimate the short-term effects of a carbon tax in Italy (the results can be easily extended to the case of a permission trading scheme), which include the percentage increase in prices and the increase in the imports of commodities to substitute domestically produced ones as intermediate input. The present study is not “behavioral”, in the sense that the change in the consumers' behavior and choice, induced by higher prices, is not taken into account.

Keywords

Price Increase Intermediate Input Tradable Permit Economic Instrument Kyoto Target 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Armington, P. S. (1969). A theory of demand for products distinguished by place of production. International Monetary Fund Staff Papers, 16, 159–177.CrossRefGoogle Scholar
  2. Baumol, W., & Oates, W. (1988). The theory of environmental policy. New York: Cambridge University Press.Google Scholar
  3. Borges, A. M. (1986). Applied general equilibrium models: An assessment of their usefulness for policy analysis. OECD Economic Study, 7, 7–43.Google Scholar
  4. Cornwell, A., & Creedy, J. (1996). Carbon taxation, prices and inequality in Australia. Fiscal Studies, 17(3), 21–38.CrossRefGoogle Scholar
  5. ENEA-ISTAT. (2000). Indagine sui consumi delle fonti energetiche nell'industria in Italia, anno 1999.Google Scholar
  6. European Union. (2003). Directive 2003/87/EC of the European Parliament and of the Council of October 13, 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC, OJ L275/ 32, 25.10.2003.Google Scholar
  7. Hertel, T. W. (1997). Global trade analysis: Modelling and applications. New York: Cambridge University Press.Google Scholar
  8. Houghton, J. T., Meira Filho, L. G., Lim, B., Treanton, K., Mamaty, I., Bonduki, Y., et al. (1996). Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories, IPCC/OECD/IEA.Google Scholar
  9. IPCC. (2001). Third Assessment Report: Climate Change 2001. Geneva, Switzerland: International Panel on Climatic Change.Google Scholar
  10. ISTAT. (2004). Tavola Intersettoriale dell'economia italiana del 2000. Roma: Italian National Statistics Institute.Google Scholar
  11. Italian Ministry for the Environment and Territory. (2002). Third national communication under the UN Framework Convention on Climate Change. Italy: Italian Ministry for the Environment and Territory.Google Scholar
  12. Jaffe, A. B., Peterson, S. R., Portney, P. R., & Stavins, R. N. (1995). Environmental regulation and the competitiveness of US manufacturing: What does the evidence tell us. Journal of Economic Literature, 33(1), 132–163.Google Scholar
  13. Karl, T. R., & Trenberth, K. E. (2003). Modern global climate change. Science, 302, 1719–1723.CrossRefGoogle Scholar
  14. Labandeira, X., & Labeaga, J. M. (1999). Combining input-output analysis and micro-simulation to assess the effects of carbon taxation on Spanish households. Fiscal Studies, 20(3), 305–320.CrossRefGoogle Scholar
  15. Labandeira, X., & Labeaga, J. M. (2002). Estimation and control of Spanish energy-related CO2 emissions: An input-output approach. Energy Policy, 30(7), 597–611.CrossRefGoogle Scholar
  16. Leonard, H. J. (1988). Pollution and the struggle for the world product. Cambridge: Cambridge University Press.Google Scholar
  17. Leontief, W. (1966). Input-output economics. New York: Oxford University Press.Google Scholar
  18. Macchi, E., Chiesa, P., & Bregani, F. (2003). Settore elettrico italiano: quali alternative e costi per rispettare Kyoto? Energia, 1, 58–67.Google Scholar
  19. Manne, A. S., & Richels, R. G. (1993). The EC proposal for combining carbon and energy taxes. Energy Policy, 21(1), 5–12.CrossRefGoogle Scholar
  20. Miller, R., & Blair, P. (1985). Input-output analysis: Foundations and extension. Englewood Cliffs, NJ: Prentice Hall.Google Scholar
  21. Ministero dell'Industria e delle Attività Produttive. (1999). Bilancio Energetico Nazionale, available at: http://mica-dgfe.casaccia.enea.it/.
  22. Mongelli, I., Tassielli, G., & Notarnicola, B. (2005). Global warming agreements, international trade and energy/carbon embodiments: An input-output approach to the Italian case. Energy Policy, Accepted for publication.Google Scholar
  23. Morgensten, R. D., Ho, M., Shih, J. S., & Zhang, X. (2004). The near-term impacts of carbon mitigation policies on manufacturing industries. Energy Policy, 32(16), 1825–1841.CrossRefGoogle Scholar
  24. Pearce, D. (1991). The role of carbon taxes in adjusting to global warming. The Economic Journal, 101(407), 938–948.CrossRefGoogle Scholar
  25. Poterba, J. M. (1993). Global warming policy: A public finance perspective. Journal of Economic Perspective, 7(4), 47–63.Google Scholar
  26. Sadelberg, I. W. (1973). A nonlinear input-output model of a multisectored economy. Economet-rica, 41(6), 1167–1182.CrossRefGoogle Scholar
  27. Suh, S., Huppes, G., & Udo de Haes, H. (2002). Environmental impacts of domestic and imported commodities in US economy. Proceedings of the 14th international conference on input-output techniques, Université du Québec à Montréal, Canada.Google Scholar
  28. Symons, E., Proops, J., & Gay, P. (1994). Carbon taxes, consumer demand and carbon dioxide emissions: A simulation analysis for the UK. Fiscal Studies, 15(2), 19–43.CrossRefGoogle Scholar
  29. Tietenberg, T. (1990). Economic instruments for environmental regulation. Oxford Review of Economic Policy, 6, 1–17.CrossRefGoogle Scholar
  30. Treloar, G. (1997). Extracting embodied energy paths from input-output tables: Towards an input-output-based hybrid energy analysis method. Economic Systems Research, 9/3, 375–391.CrossRefGoogle Scholar
  31. Wyckoff, A. W., & Roop, J. M. (1994). The embodiment of carbon in imports manufactured products. Implications for international agreements on greenhouse gas emissions. Energy Policy, 22(3), 187–194.CrossRefGoogle Scholar
  32. Zhang, Z. X., & Folmer, H. (1998). Economic modelling approaches to cost estimates for the control of carbon dioxide emissions. Energy Economics, 20, 101–120.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media B.V. 2009

Authors and Affiliations

  • Ignazio Mongelli
    • 1
  • Giuseppe Tassielli
    • 2
  • Bruno Notarnicola
    • 3
  1. 1.Institute for Prospective Technological StudiesJoint Research Center (JRC), European Commission (EC)SevilleSpain
  2. 2.Department of Commodity ScienceUniversity of BariBariItaly
  3. 3.Commodity Science at the Faculty of Economics — TarantoUniversity of BariBariItaly

Personalised recommendations