Taxing international emissions trading

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

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4 Citations (Scopus)


We investigate the efficiency and effectiveness consequences of emissions trading taxation. A theoretical partial equilibrium model is developed, showing that permits taxation distorts the equilibrium price and abatement efforts. Potentially counterintuitive conclusions concerning the tax revenue are also derived. A CGE model complements theoretical results, suggesting that the change in the equilibrium permits price brought about by taxation can be significant. Finally, we conclude that policy design based on cost effectiveness might lead to wrong conclusions: the socially desirable design of emissions trading taxation requires homogenous tax rates applied to net sellers and no rebate rates allowed for net buyers. © 2013 Elsevier B.V.
Original languageEnglish
Pages (from-to)609 - 621
Number of pages13
JournalEnergy Economics
Publication statusPublished - Nov 2013
Externally publishedYes


All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Energy(all)

Cite this

Costantini, V., D'Amato, A., Martini, C., Tommasino, M. C., Valentini, E., & Zoli, M. (2013). Taxing international emissions trading. Energy Economics, 40, 609 - 621.