The European Carbon Tax: An Economic Assessment: (1 Economics, Energy and Environment)

CARLO CARRARO* AND DOMENICO SINISCALCO** * University ofUdine, Greta and Fondazione Mattei; ** University of Turin and Fondazione Mattei 1. THE GLOBAL WARMING DEBATE The 1980s have seen an unprecedented growth in awareness ofthe problem of (man-induced) climate change. Scientific studies to assess the extent to which emissions resulting from human activities are increasing the atmos- pheric concentration ofgreenhouse gases (GHGs: carbon dioxide, methane, man-made chloro-fluorocarbons, nitrous oxide), thus contributing to raise the global mean temperature, have been carried out since the beginning of the decade. In 1990, a comprehensive report assessing the nature and the effects of global wanning was presented by the Inter-Governmental Panel on Climate Change (IPCC), jointly established by the World Meteorological Organisa- tion and the United Nations Environmental Programme. According to the Report, emissions resulting from human activities are substantially increas- ing the atmospheric concentration of GHGs. This is true, in particular, for carbon dioxide emissions, which result mainly from the burning of fossil fuels. The IPCC estimates that, in the last thirty years, the increase in the at- mospheric concentration of C02 has been substantially higher than in the last two centuries and the actual level is the highest among those registered in 160,000 years. The increasing atmospheric concentration of GHGs will enhance the greenhouse effect, resulting on average in an additional wann- ing of the earth's surface. The main greenhouse gas, water vapour, will in- crease in response to global wanning, and will further enhance it.

Table of Contents:
1. Introduction.- 2. General Issues and Evidence.- 2.1 Global Effects of the European Carbon Tax.- 2.2 Distributional Effects of a European Carbon Tax.- 2.3 Carbon Taxes and Energy Markets.- 3. Country Studies.- 3.1 Carbon Taxation in Germany: Approaches and Prospective Effects.- 3.2 The Use of Economic Models for Analysing Environmental Problems: the Case of the Greenhouse Effect for France.- 3.3 The EC Carbon Tax and Energy Demand in the United Kingdom.- 3.4 The Welfare Effect of a Carbon Tax for China.- 3.5 Environmental and Economic Effects of the European Carbon Tax: the Italian Case.- 3.6 Airborne Toxic (“Big 5”) and GHG (CO2) Emissions: Italy 1991–1995.- 4. The Policy Debate.- 4.1 Stabilizing CO2 Emissions in Europe: Individual Stabilization versus Harmonization of Carbon Taxes.- 4.2 The Carbon Tax: Economic and Policy Issues.- 4.3 Is the European Carbon Tax Really Effective?.