The evaluation of the external costs caused by the impact of air pollution on human health is fraught with theoretical and empirical difficulties. Many issues are still unsatisfactorily dealt with. Due to the lack of theoretical consensus and good empirical data, the existing estimates on external costs of air pollution in Italy show a very large variability. This sends a noisy signal to the policy makers who ought to develop fiscal policies. In the paper we report on a new estimate we performed, based on recent theoretical and empirical achievements. The focus is on air pollution caused by transport activities. We get much more conservative estimates than there were presented in previous studies.
