This paper focuses on the effects of policies aimed at preventing an increase in pollution through the introduction of a tax, harmonised at EU level, on NOx and SO2. We assess the economic effect on member countries’ industries of different levels of taxation through the use of a CGE model. Our results suggest a separate role for environmental and commercial policies. The case study estimates the potential effects of the same policies at regional level (Apulia). A slowdown of the Italian economy would have a negative impact on the regional economic performance.
Keywords: CGE, transboundary pollution, environmental taxation.
Jel Code: Q53, Q56, R13.