The willingness to pay for a carbon tax in Italy

A carbon tax aimed specifically at the reduction of greenhouse gas (GHG) emissions produced by non-ETS sectors (and in particular, from transportation) has been proposed by policy makers on several occasions but has not yet been implemented in Italy. This paper aims to test the acceptability of such a measure and to quantify its amount by estimating Italian citizens’ willingness to pay (WTP) via two contingent valuation surveys involving a sample of 603 people. We find that the median WTP ranges from €101 to €154 if the payment vehicle is an annual fixed carbon tax, and from €0.17 to €0.30 per liter if the payment vehicle is a fuel carbon tax. Such values are found to be consistent with the social cost of the GHG emissions produced annually by an Italian citizen. Earmarking the carbon tax either to mitigate the environmental impacts of climate change or to finance renewable energy projects proves to substantially increase the respondents’ WTP. A number of other impacts on the WTP were also estimated, including: respondents’ attitudes and beliefs, their place of residence and mobility habits, and various socioeconomic and demographic characteristics. The policy implications of this evidence are discussed.