Alessio D’Amato

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

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.

Environmental Quality and Income Inequality: The Impact of Redistribution on Direct Household Emissions in Italy

This paper investigates the relation between income distribution and direct households’ emissions in Italy. Our results seem to confirm some recent articles concerned with income-pollution relationship in other countries. Indeed, our empirical analysis shows that decreasing inequality would lead to higher aggregate emissions, whereas increasing inequality would reduce environmental problems. By going into a deeper inquiry of such results, we identify some weaknesses in the framework proposed by the literature, namely the shape of emission intensities distribution. We show that changes in such distribution might lead to opposite conclusions. [JEL numbers: Q01; Q56; D12]

An Exercise on the optimal use of groundwater resources

According to the EU water framework directive 2000/60, water tariffs should be based on the full cost recovery principle, including scarcity and external effects. To disregard these two aspects is not only conceptually misleading, as we try to show, but also leads to a wrong, distorted tariff. Our attempt to measure such distortion with respect to the italian case shows, for example, that water tariffs should be up to three times higher than the actual ones. That is to say, a significant correction in water prices is needed to achieve efficiency.