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

摘要

Economists and policy makers refer to carbon tax as an efficient instrument tocontrol 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 ofa carbon tax in Italy (the results can be easily extended to the case of a permissiontrading scheme), which include the percentage increase in prices and the increase inthe imports of commodities to substitute domestically produced ones as intermediateinput. The present study is not ¿behavioral¿, in the sense that the change in theconsumers¿ behavior and choice, induced by higher prices, is not taken into account.The results of the study show that a carbon tax of 20 d/t CO2 in Italy wouldproduce a modest increase in prices and a small reduction in the emitted CO2determined by the substitution of domestically produced intermediate inputs withimported ones. Moreover, due to the assumption underlying the applied model, theresults have to be considered as an upper bound estimation or pessimistic forecast aswell as restricted to a short-run time horizon, which means before any technologicaladjustments are possible.