Abstract

In 2019 the Italian legislature introduced two different fiscal measures, both are aimed at reducing atmospheric pollution and promoting decarbonisation in the vehicle sector. These measures are a kind of feebates system, a term used to describe policy instruments that penalise the purchase of a specific good with a tax (fee) and give a bonus to the consumer for the purchase of other products (rebate). They therefore give individuals incentives to internalise the pollution externalities of specific goods, like cars. The first measure is known as the “ecobonus”. It is a tax incentive that aims to improve the purchase of low-emission or electric cars. The second measure, known as the “ecotax”, is a tax based on CO2 emissions that must be paid on the purchase of new high-emission cars. This chapter aims at analysing these measures, also in a comparative perspective, providing interesting suggestions and implications from the policy making standpoint on the debated issue.