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The Carousel Value-added Tax Fraud in the European Emission Trading System


  • Maria Berrittella

    (Dipartimento di Scienze Economiche, Aziendali e Finanziarie, Università degli Studi di Palermo)

  • Filippo Alessandro Cimino

    (Facoltà di Scienze Economiche e Giuridiche, Università Kore di Enna)


In this article, we analyse the effects of the carousel value-added tax fraud in the European carbon market and the legislative measures that the EU Member States could adopt to deal with this phenomena. We use a computable general equilibrium model, called GTAP-E and the version 6 of the GTAP database to evaluate the economy-wide and terms of trade effects. The policy test has been designed for five European countries: Belgium, France, Germany, Italy, Netherlands and the United Kingdom. According to our findings, the legislative measures aimed to remove the VAT fraud in the European Emission Trading System will have positive effects in terms of GDP and welfare in the selected EU Member States.

Suggested Citation

  • Maria Berrittella & Filippo Alessandro Cimino, 2012. "The Carousel Value-added Tax Fraud in the European Emission Trading System," Working Papers 2012.75, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2012.75

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    References listed on IDEAS

    1. Regina Betz & Misato Sato, 2006. "Emissions trading: lessons learnt from the 1st phase of the EU ETS and prospects for the 2nd phase," Climate Policy, Taylor & Francis Journals, vol. 6(4), pages 351-359, July.
    2. Claudia Kemfert & Michael Kohlhaas & Truong Truong & Artem Protsenko, 2006. "The environmental and economic effects of European emissions trading," Climate Policy, Taylor & Francis Journals, vol. 6(4), pages 441-455, July.
    3. Shoven,John B. & Whalley,John, 1992. "Applying General Equilibrium," Cambridge Books, Cambridge University Press, number 9780521266550, March.
    4. McDougall, Robert & Alla Golub, 2007. "GTAP-E: A Revised Energy-Environmental Version of the GTAP Model," GTAP Research Memoranda 2959, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    5. Burniaux, Jean-Marc & Truong Truong, 2002. "GTAP-E: An Energy-Environmental Version of the GTAP Model," GTAP Technical Papers 923, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    6. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685.
    7. Nijkamp, Peter & Wang, Shunli & Kremers, Hans, 2005. "Modeling the impacts of international climate change policies in a CGE context: The use of the GTAP-E model," Economic Modelling, Elsevier, vol. 22(6), pages 955-974, December.
    8. Dagoumas, A.S. & Papagiannis, G.K. & Dokopoulos, P.S., 2006. "An economic assessment of the Kyoto Protocol application," Energy Policy, Elsevier, vol. 34(1), pages 26-39, January.
    9. Alfred Endres & Cornelia Ohl, 2005. "Kyoto, Europe?—An Economic Evaluation of the European Emission Trading Directive," European Journal of Law and Economics, Springer, vol. 19(1), pages 17-39, January.
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    More about this item


    Domestic Emission Trading; General Equilibrium Analysis; Legislative Measures; Value-added Tax Fraud; Welfare;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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