Taxing international emissions trading

Valeria Costantini, Alessio D'Amato (), Chiara Martini, Maria Cristina Tommasino, Edilio Valentini and Mariangela Zoli

No 143, Departmental Working Papers of Economics - University 'Roma Tre' from Department of Economics - University Roma Tre

Abstract: Most tradable permit regimes have ignored the role of emission allowance taxation whereas the OECD and the European Union have emphasized the need for further investigation of the related efficiency and effectiveness consequences. The aim of our paper is to take a first step in this direction. We illustrate a theoretical model featuring I representative competitive firms/countries. Our theoretical results show that accounting for permit taxation implies a distortion in the equilibrium price as well as an impact on emissions distribution across countries. The specific features of these distortions are then investigated through a Computable General Equilibrium model in which several options for taxes on net sellers’ permit revenues and defiscalization of net buyers’ permit costs are simulated. Welfare analysis is performed, suggesting that the design of permit taxation is relevant in determining how welfare gains and losses are distributed across countries.

Keywords: international emissions trading; permit taxation; computable general equilibrium (search for similar items in EconPapers)
JEL-codes: H23 Q58 (search for similar items in EconPapers)
Date: 2011-12
New Economics Papers: this item is included in nep-acc, nep-ene and nep-env
References: Add references at CitEc
Citations: View citations in EconPapers (2)

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http://dipeco.uniroma3.it/public/WP%20143%20(2)%202011.pdf

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Journal Article: Taxing international emissions trading (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:rtr:wpaper:0143

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