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The distributive effects of carbon taxation in Italy


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  • Chiara Martini


The distributive incidence of environmental policies has not been widely investigated whereas more attention has been focused on the efficiency of environmental reforms. According to the Kyoto Protocol, domestic policies aimed at reducing carbon emissions can include carbon/energy taxes, emission trading, command-and-control regulations and other policies. Until now, only a few European countries have implemented energy or carbon taxes: Nordic countries have been the firstcomers, suggesting a tight link between institutional environment and the potential for policy adoption. In my analysis I assume that carbon taxation is fully shifted forward to consumers. The estimation of a complete demand system can clarify the impact of ecological tax reforms, help government to select appropriate fiscal policy and give producers the ability to forecast market demand. The demand systems underlying the simulation are represented by extensions of the Almost Ideal Demand System of Deaton and Muellbauer (1980b) and the Quadratic Almost Ideal Demand System (Banks et al., 1997). The different taxation scenarios I simulate is modelled by referring to the Financial Law for 1999 and the DPCM 15/1/1999; The output of the demand system estimation will allow to calculate the compensating and equivalent variations and to estimate the revenue raised by carbon taxation introduction.

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Bibliographic Info

Paper provided by Department of Economics - University Roma Tre in its series Departmental Working Papers of Economics - University 'Roma Tre' with number 0103.

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Length: 37
Date of creation: 2009
Date of revision:
Handle: RePEc:rtr:wpaper:0103

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Keywords: carbon tax; regressivity; demand system; welfare measures;

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Cited by:
  1. Cludius, Johanna & Beznoska, Martin & Steiner, Viktor, 2012. "Distributional effects of the European Emissions Trading System and the role of revenue recycling: Empirical evidence from combined industry- and household-level data," Discussion Papers 2012/6, Free University Berlin, School of Business & Economics.
  2. Martin Beznoska & Johanna Cludius & Viktor Steiner, 2012. "The Incidence of the European Union Emissions Trading System and the Role of Revenue Recycling: Empirical Evidence from Combined Industry- and Household-Level Data," Discussion Papers of DIW Berlin 1227, DIW Berlin, German Institute for Economic Research.
  3. Giovanni Marin & Massimiliano Mazzanti, 2013. "The evolution of environmental and labor productivity dynamics," Journal of Evolutionary Economics, Springer, Springer, vol. 23(2), pages 357-399, April.


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