The impact of regional emissions taxes: the Spanish case

The internalisation of environmental damage associated with greenhouse gases is crucial to protect natural resources and human health. In this paper, we present an empirical model addressed to examine whether several variables impact on regional pollution in Spain, with emphasis on the instruments implemented to mitigate the environmental damage. We can further distinguish among private or public instruments. The former refers to the business expenditure on pollution abatement; the latter includes Pigouvian taxes (national) and the emissions trading system (international). The Spanish pollution taxes are managed at regional tier in response to territorial preferences, but it can also be a source of mobility of production factors among regions, and then, we will analyse the adequacy of this level of government.