The economics of the greenhouse effect: evaluating the climate change impact due to the transport sector in Italy

The transport sector significantly contributes to energy consumption and carbon dioxide emissions, accounting for about one-third of the total carbon dioxide emissions in OECD countries. In this paper the issues of energy consumption and carbon dioxide emissions in the transport sector in Italy are addressed. A comparative static approach is applied for the years 1980 and 1995. A decomposition scheme is proposed in order to highlight the main factors determining the variation of carbon dioxide emissions over the period. Then, an evaluation of the impact of the transport sector in terms of global warming is attempted, using some monetary estimates. Results indicate that the main driving force of the variation of carbon dioxide emissions in Italy is the growth in GDP. Total global warming damage caused by the transport sector in Italy ranges from 0.02 to 0.1% of GDP.