Carbon Tax and its Short-Term Effects in Italy: An Evaluation Through the Input-Output Model
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.
KeywordsPrice Increase Intermediate Input Tradable Permit Economic Instrument Kyoto Target
Unable to display preview. Download preview PDF.
- Baumol, W., & Oates, W. (1988). The theory of environmental policy. New York: Cambridge University Press.Google Scholar
- Borges, A. M. (1986). Applied general equilibrium models: An assessment of their usefulness for policy analysis. OECD Economic Study, 7, 7–43.Google Scholar
- ENEA-ISTAT. (2000). Indagine sui consumi delle fonti energetiche nell'industria in Italia, anno 1999.Google Scholar
- 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
- Hertel, T. W. (1997). Global trade analysis: Modelling and applications. New York: Cambridge University Press.Google Scholar
- 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
- IPCC. (2001). Third Assessment Report: Climate Change 2001. Geneva, Switzerland: International Panel on Climatic Change.Google Scholar
- ISTAT. (2004). Tavola Intersettoriale dell'economia italiana del 2000. Roma: Italian National Statistics Institute.Google Scholar
- 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
- 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
- Leonard, H. J. (1988). Pollution and the struggle for the world product. Cambridge: Cambridge University Press.Google Scholar
- Leontief, W. (1966). Input-output economics. New York: Oxford University Press.Google Scholar
- Macchi, E., Chiesa, P., & Bregani, F. (2003). Settore elettrico italiano: quali alternative e costi per rispettare Kyoto? Energia, 1, 58–67.Google Scholar
- Miller, R., & Blair, P. (1985). Input-output analysis: Foundations and extension. Englewood Cliffs, NJ: Prentice Hall.Google Scholar
- Ministero dell'Industria e delle Attività Produttive. (1999). Bilancio Energetico Nazionale, available at: http://mica-dgfe.casaccia.enea.it/.
- 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
- Poterba, J. M. (1993). Global warming policy: A public finance perspective. Journal of Economic Perspective, 7(4), 47–63.Google Scholar
- 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