Economists and policy makers refer to carbon tax as an efficient instrument to control 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 of a carbon tax in Italy (the results can be easily extended to the case of a permission trading scheme), which include the percentage increase in prices and the increase in the imports of commodities to substitute domestically produced ones as intermediate input. The present study is not “behavioral”, in the sense that the change in the consumers' behavior and choice, induced by higher prices, is not taken into account.
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Mongelli, I., Tassielli, G., Notarnicola, B. (2009). Carbon Tax and its Short-Term Effects in Italy: An Evaluation Through the Input-Output Model. In: Suh, S. (eds) Handbook of Input-Output Economics in Industrial Ecology. Eco-Efficiency in Industry and Science, vol 23. Springer, Dordrecht. https://doi.org/10.1007/978-1-4020-5737-3_18
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