IDEAS home Printed from
   My bibliography  Save this article

Financing Public Expenditure via Emissions Taxation under International Emissions Trading: Is There Any Scope for Emission Tax Harmonization?


  • Alessio D’Amato

    () (University of Rome “Tor Vergata”)

  • Amanda Spisto

    () (University of Rome “Tor Vergata”)


We address the issue of emission tax harmonization in a model featuring two representative firms located in two countries. Firms are subject to an international emissions trading system and to domestic emissions taxation; the latter generates public revenue but also implies implementation costs. Decentralized tax setting causes a spillover across countries via the permits price. Nonetheless, harmonization might imply a lower aggregate social welfare. This happens when uniform taxation prevents the exploitation of significant differences across countries in terms of costs and benefits of taxation. Finally, we identify cases where harmonization implies larger aggregate social welfare but lacks unanimous consent.

Suggested Citation

  • Alessio D’Amato & Amanda Spisto, 2009. "Financing Public Expenditure via Emissions Taxation under International Emissions Trading: Is There Any Scope for Emission Tax Harmonization?," Rivista di Politica Economica, SIPI Spa, vol. 99(3), pages 247-272, JULY-SEPT.
  • Handle: RePEc:rpo:ripoec:v:99:y:2009:i:3:p:247-272

    Download full text from publisher

    File URL:
    Download Restriction: Payment required

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item


    environmental tax harmonization; international emissions trading; transboundary pollution;

    JEL classification:

    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rpo:ripoec:v:99:y:2009:i:3:p:247-272. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sabrina Marino). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.