LIBRI DI LUIGI DE PAOLI

The Italian draft National Energy-Climate Plan (NECP), in accordance with the requirements of the Regulation on the Governance of the EU Energy Union, deals with the five dimensions of the Energy Union. However, energy security, the internal energy market and research, innovation and competitiveness are not examined in this paper. The present assessment of the Italian energy-climate plan proposal is limited to three dominant objectives: decarbonization, energy efficiency (or better: energy savings) and the deployment of renewables. This paper reviews the contents of the 2030 objectives and the tools proposed to achieve them and expresses an overall assessment of the NECP proposal presented by the Italian Government. Globally, the targets presented by Italy for 2030 are slightly higher than those assigned by the EU: 34.6% instead of 33% for emission reduction compared to 2005, a 30% instead of 29% share of energy from renewables in gross final consumption and an approximate 40% reduction of the energy demand instead of 32.5% (compared to the baseline scenario for 2030 of PRIMES 2007, which remains the reference of the European EED). The proposed objectives are ambitious and demonstrate Italy’s full adherence to the long-term vision of the EU Commission, which judged them positively in its assessment. The proposed interventions are very numerous and concern all economic sectors. Their implementation requires a capacity of the public administration which is not always available in Italy, which is also due to an institutional system that requires a high level of coordination between the various stakeholders. The intervention tools indicated are not novel with respect to those developed and used in the past. Furthermore, in some cases they are generic and in other cases, the concrete measures only cover a limited period and therefore only partially guarantee the achievement of the set objectives. This way of proceeding, although criticized by the Commission in its assessment of the Italian NECP, preserves comprehensible and indeed desirable degrees of flexibility due to the impossibility of predicting the evolution of variables such as technology, international prices or the response of private subjects to public interventions over a long period of time. However, if the results were not in line with expectations, action should be taken promptly, which is problematic given the time required for public decisions in Italy.

This paper is an introduction to the EPEE’s special issue, which examines nine draft National Energy and Climate Plans (NECPs). Firstly, we will briefly review the EU’s energy-climate goals for 2020 and 2030 and we will look at its long-term "climate neutral" vision for 2050. We will then assess how successful or not individual member states were in achieving the EU’s 2020 targets and how they can best achieve 2030 goals. In the third section, we will look at the overall achievement objectives for 2030 based on draft NECPs assessed by the European Commission in June 2019. However, we will express some criticism of the planning process required by the Regulation on the Governance of the Energy Union. Finally, we will present the findings of expert contributors from nine EU countries - Austria, Belgium, France, Germany, Italy, the Netherlands, Poland, Spain and the United Kingdom - who have assessed their respective countries’ energy-climate plans

The Paris Agreement has created a double bifurcation. First, from top-down approach (with an emissions limit imposed from above) to a bottom-up approach based on national emissions reduction pledges. And second, from a mitigation-centered policy to a more balanced mitigation and adaptation efforts. The following work proposes, however, that further steps must be taken to bring the theme of development back to the center of the fight against climate change. The article is divided into four parts. First is a reflection on the fact that mitigation has captured much of the attention during the past twenty years, but that adaptation is progressively gaining importance in policies to combat climate change. The next section explains why, starting from the Framework Convention on Climate Change in 1992, the objective of the "stabilization of greenhouse gases concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system" has led first to define the increase of 2 ° C as the limit not to be exceeded, then to the search for an equivalent level of CO2 concentration and last to the related carbon budget. The third part shows why the goal of not exceeding the 2 ° C temperature increase is illusory when considering the discrepancy between actual mitigation policies and theoretical commitments required based on the data presented by the IPCC. Even salvation coming from negative emission technologies at the moment seems more theoretical than real. The final conclusions state that, given the insufficiency of the mitigation tools, adaptation must be taken seriously - not as a passive solution, but as a conception of a different kind of development, which is required not only to fight climate change, but also for other purposes. .

The European Union Emissions Trading System (EU ETS or simply ETS) has now been in place for more than 10 years. There is broad consensus that, although emissions have been below the intended objective during this period, this result is hardly due to the ETS. In these 10 years, several changes have been introduced to the initial rules. Lately, the European Council and Parliament, based on proposals from the European Commission (EC), decided to reform the ETS by introducing a market stability reserve (MSR) with the aim of overcoming the lack of effectiveness regarding ETS, as implicitly recognized by these institutions. In fact, there were other possibilities for reforming the ETS. The purpose of this paper is to present the reasons that favour the introduction of a reserve price for auctions of EU emissions allowances (EUAs) as soon as possible, but at least by the fourth phase of the ETS. It also explains why it would be an effective and no-regret option to start from a low level of the reserve price and reaching in about ten years the level making it convenient to switch from coal to gas in electricity production. The paper is divided into five sections. The first section summarizes the key stages of the history the EU ETS with some comments. The second section analyses the factors that explain the reduction in emissions, particularly during the second phase of the ETS. The next section examines the decisions that have been taken regarding the amount of primary offering of emission permits. The fourth section discusses the reasons that have led to the surplus of permits in circulation since the end of the second ETS phase and the remedies proposed by the European Commission. Finally, the paper presents the case for the introduction and fixing of the minimum and maximum price during the auction for the sale of permits.

The goal of this article is to formulate some proposals to reduce CO2 emissions with efficient and effective policies. After presenting three possible ways that countries can follow to define their policies for combating climate change, the article discusses the tools available to implement these policies. It then reviews the reasons why it would be preferable to set centrally the carbon price rather than limit the amount of emissions and let the market setting the price. On the basis of these considerations some concrete proposals for the policy of combating climate change in Italy and the EU are formulated. It is proposed that Italy re-introduces a carbon tax, called "climate contribution" and defines its evolution in a coordinated manner with the price of ETS emission permits. To make prices of the permits more stable and predictable, it is proposed to reform of the EU ETS by introducing a floor price rather than a market stability reserve. In addition to make the European climate policy more effective and rational, it is proposed that the floor price of emission permits is fixed in such a way that within a decade it is no longer convenient to use coal in electricity production (unless in this period the carbon capture and storage becomes competitive).

The EU climate and energy policy for 2020 is summed up by three goals called 20-20-20: a) reduce GHG emissions by 20% compared to 1990; b) save 20% of the EU’s energy consumption compared to projections for 2020; c) develop a 20% share of renewable energies in overall EU energy consumption by 2020. In 2013 the EU Commission issued a Green paper to launch a debate on what should be the objectives for 2030 and early 2014 has published its proposals. This article shares the priority given in the Commission’s communication of January 2014 to the objective of reducing greenhouse gas emissions and argues that this should be the only target set in quantitative terms. Instead, the proposal of continuing to make use of the EU-ETS, although reformed with the introduction of a reserve stability fund, is not shared. In place of this solution, it is suggested to introduce a carbon tax, to be revised (and raised) periodically, based on the reduction of GHG emissions. Its level should be such that the coal power plants without CCS become no longer competitive in a few years. A less preferable solution would be to maintain the cap-and-trade with a floor and ceiling price. The promotion of renewables certainly deserves to be continued, but without quantitative mandatory targets that are not required neither at the European level nor at the level of individual Member States. Moreover, the RES support has to avoid distorting the internal market for electricity. Instead, a common European system of promotion of renewable should be introduced, with clear and limited objectives. Finally, the increase in energy efficiency should also continue to be promoted, but without any quantitative target that would be very difficult to establish and monitor.

Cross-border transmission capacities in Europe have been traditionally allocated via explicit auctions. As these will be replaced by implicit auctions, a relevant question regards the impact of this major transition on expected gains in social welfare. In this paper we study, first, the equations that describe the welfare loss associated with a suboptimal use of the transmission capacity. Second, by examining how suboptimal flows, and particularly adverse flows, change with the introduction of implicit auctions, we derive an original procedure that improves the accuracy of the welfare loss estimation when available market data are limited. Finally, we apply the proposed procedure to data pertaining to the Italian market and verify that for a net importer, such as Italy, the procedure derived in this work is particularly helpful in providing more accurate estimations of the welfare losses associated with explicit auctions. As implicit auctioning will eliminate these welfare losses, we interpret our results as a measure of the benefits associated with the current transition for the Italian market and use them to derive some more general implications.

The competitiveness of nuclear energy in an era of liberalized markets and restrictions on greenhouse-gas emissions - The debate on the benefits of nuclear energy revolves around the very competitiveness of this energy source. This article tries to show why it is not easy to answer unambiguously the question whether or not it is convenient to resort to nuclear power in a given country. After listing the factors on which the cost of electricity generation rests and discussing the range of probability of their value, the levelized cost of electricity generation from nuclear, coal and gas-fired plants is calculated using the Monte Carlo method. The results show that nuclear power is likely to be competitive, especially if policies to combat CO2 emissions will continue in the coming decades. There are, however, some margins of uncertainty, mainly related, to the one hand, to the cost of nuclear plants, that depends on the socio-institutional context, and on the other, to the fossil fuels cost, that are inherently difficult to anticipate even on average. Finally it is noted that the context of liberalized electricity markets may make it more difficult for investors to accept the risk of investing in nuclear power plants and for the community to socialize some of the costs associated with this technology.

Key words: Nuclear energy, generation costs, Montecarlo method, environmental impacts.

JEL classifications: G11, H23, L72, L94, Q31, Q40

The promotion of energy efficiency in Italy (by Luigi De Paoli e Luca Bongiolatti) - ABSTRACT: In 2004 Italy introduced an obligation for electricity and gas distribution companies to reach specific objectives regarding the improvement of energy efficiency in final energy consumption. The scope of the provision is to promote investments in energy efficiency in order to meet the greenhouse gases reduction target set by the Kyoto protocol. The adoption of binding targets of energy efficiency will also lead to the development of an energy services market, modifying the traditional relation between energy dealers and final consumers, thus leading to a more efficient use of the available resources. Similar mechanisms have already been applied in other European countries (as France and United Kingdom) and will be likely introduced in other countries with the implementation of European Directive on energy end-use efficiency and energy services. This paper describes and analyzes both the measures adopted in Italy and the results obtained after the first year of operation of the mechanism. The paper is divided in six different sections. In the first part we highlight the main problems related to the development of system based on tradable white certificates. In the second part we provide a brief description of the Italian regulatory context. In the third part there is an economic analysis of investments in energy efficiency. The fourth part considers the different options that distribution companies face in order to reach the energy efficiency targets. The fifth part shows the results obtained after the first year of operation of the mechanism. Finally, we propose some possible modifications to the scheme adopted in Italy considering the results obtained and the alternative solutions already applied in France and United Kingdom. JEL classification: Q400, Q480