Essays on atmospheric emissions and environmental policy

Abstract

The problem of atmospheric pollution is one of the major concerns about damaging effects of human activities on the environment. Some of the gases released into the atmosphere known as greenhouse gases (GHG) have a global effect, contributing to climate change. An increasing number of scientific studies seek to quantify and predict the possible effects of global warming, and they often conclude that these could be extremely serious. The risks associated to climate change clearly need an international effort to be faced. The aim of this thesis is to provide some empirical evidence to enrich the debate on the evolution of emissions and on the policy instruments that could reduce atmospheric pollution. A first essay analyses the evolution of GHG emissions and acidification emissions for Italy, in the years 1995-2005. The aim is to highlight how different economic factors have driven the evolution of Italian emissions. The main factors considered are economic growth, the development of a technology allowing a more environment-friendly way of production, and the structure of consumption. The knowledge of the role of different determinants is helpful to figure out effective political instruments that would permit to reduce environmental pressures. Essay two and three analyze a specific EU policy, the Energy Taxation Directive (ETD), an environmental taxation approved in 2003 that affects the price of energy products. In 2011, the European Commission proposed a new version of the ETD to increase the effectiveness of the instrument through higher rates and less exemptions. However, in May 2012 the European Parliament did not approve the Commission proposal. These studies simulate the effect that the reform would have had on the level of prices, if implemented. The aim is to shed light on the possible reasons that caused the attempt of improving this instrument to failure. The last essay refers to the current debate regarding carbon-motivated border tax adjustment (CBTA). CBTA are tariffs applied to imports designed to avoid drawbacks of emission reduction policies when only one or few regions (the abating regions) implement them. Through CBTA the abating regions level out different treatment applied to domestic and imported products. Through a multi-region and multi-sector analysis we compute and compare two possible CBTA systems that the EU could implement to complement a hypothetical carbon tax applied to domestic products. Results at country and product level contribute to better understand the effects of this instrument and to add information to the political debate on it.