External costs and environmental taxation: the role of transport sectors within the Italian economy

This chapter aims to verify the coherence of the Italian environmental tax framework with the polluters pays principle - as measured through the environmental external costs of different activity sectors, with a particular focus on transport - and to draw recommendations for environmental tax reform within the context of the broader Italian fiscal system. The external costs generated by different activity sectors are estimated based on official data and methods such as Istat’s accounts of air emissions by economic sector (23 pollutants and 64 sectors) and the newly released government guidelines for evaluating the external costs of public infrastructure. The external costs due to each activity sector are then compared with the level of environmental taxes paid by the same sector, resulting in tax reform recommendations that focus in particular on the road, maritime and air transport sectors.