CLIMATE
ACTION
TRACKER
BROWN TO GREEN:
G20 TRANSITION TO A LOW CARBON ECONOMY
Italy
This country profile assesses Italy’s past, present and indications of future
performance towards a low-carbon economy by evaluating emissions,
decarbonisation, climate policy performance and climate finance. The
profile summarises the respective findings from, amongst others, the
Climate Change Performance Index (CCPI, operated by
Germanwatch and Climate Action Network Europe), the Climate Action
Tracker (CAT, operated by Climate Analytics, NewClimate Institute, Ecofys
and the Potsdam Institute for Climate Impact Research), and analyses
from the Overseas Development Institute (ODI).
Human Development Index
GHG emissions
per capita
Share of global
GHG emissions
0.87
0.82
GDP
per capita
(tCO2e/cap)
G20
average
8.7
8
0.9%
0
Share of
global GDP
1
G20
average
G20 average
Source: UNDP, data for 2015
Source: World Bank Indicators, data for 2012
$
1.9%
$
$
$ 26,842
$ 15,071
Source: IEA, data for 2013
9
600
8
7
500
6
400
5
300
4
200
3
100
2
30
20
26
20
22
20
18
20
14
20
10
20
20
20
19
19
19
06
0
02
-100
98
1
94
0
Emissions per capita (tCO2/capita)
700
90
Total emissions (MtCO2e/a)
GREENHOUSE GAS (GHG) EMISSIONS
Historic emissions
(excluding forestry)
Energy-related
CO2 emissions
Energy-related
CO2 emissions per capita
Current policy emissions projections
(excluding forestry)
Historic forestry
emissions/removals
G20 average of energy-related
CO2 emissions per capita
Italy’s greenhouse gas (GHG) emissions peaked in
2005 and decreased since then. Future projections
show an increase up to a level of 524 MtCO2e.
Emissions from land use, land-use change and
forestry (LULUCF) are in the negative range.
Energy-related carbon dioxide (CO2) emissions
account for 75% of Italy’s GHG emissions. CO2 per
capita emissions have developed in line with overall
GHG emissions. The CCPI evaluates Italy’s emissions
level as medium compared to other countries,
recognising a positive trend.
Composition of
GHG emissions
83%
N O 6%
CH 8%
F-Gases 2%
CO2*
2
4
CCPI evaluation of emissions level and trend
Level
Weak trend
very poor
poor
medium
good
very good
Strong trend
CO2 emissions
from forestry -4%
*CO2 emissions incl. LULUCF
Source: Annex I countries: UNFCCC (2015);
Non-Annex I countries: IEA (2014)
and CAT (2015)
Sources: Past energy related emissions from the Climate Change Performance Index (CCPI); past non-energy and future emissions projections from the Climate Action Tracker (CAT).
CCPI calculations are primary based on the most recent IEA data; CAT calculations are based on national policies and country communications.
Brown to green: G20 transition to a low carbon economy
Italy - Country Profile
DECARBONISATION
Energy intensity of the economy
Total Primary Energy Supply per GDP PPP
(MJ per 2005 US dollar)
10
The energy intensity of Italy’s economy (TPES/GDP) has
barely changed in recent years, and is about one third
below the G20 average. The CCPI evaluates Italy’s level of
energy intensity as relatively good, with a decreasing
trend.
9
8
7
6
5
4
3
2
1
20
12
20
10
20
08
20
06
20
04
20
02
20
00
19
98
19
96
19
94
19
92
19
90
0
Energy intensity
CCPI evaluation of energy intensity of GDP
Level
Average energy intensity
in G20
Weak trend
Source: CCPI, 2016
very poor
poor
medium
good
Strong trend
very good
Carbon intensity of the energy sector
70
Carbon intensity in the energy sector (CO2/TPES) slightly
declined since 1990, sitting below the G20 average since
2009. Future projections show carbon intensity
remaining relatively constant in the future, although the
2°C compatible pathway clearly indicates a decrease is
needed over time. The CCPI evaluates Italy’s carbon
intensity of primary energy supply as medium, but due
to the recent decrease recognises a positive trend.
Tonnes of CO2 per TPES (tCO2/TJ)
60
50
40
30
20
10
Carbon intensity
(past trend)
Average carbon intensity
in G20
Carbon intensity
(current policy projection)
Global benchmark
for a 2°C pathway
30
20
26
20
22
20
18
20
14
20
10
20
06
20
02
20
98
19
94
19
19
90
0
CCPI evaluation of carbon intensity of energy sector
Level
Weak trend
Sources: Past: CCPI; future projections: CAT
very poor
poor
medium
good
Strong trend
very good
40%
800000
35%
700000
30%
600000
25%
500000
20%
400000
15%
300000
10%
200000
5%
100000
0
Total coal in TPES [TJ]
Share of coal in Total Primary Energy Supply (TPES)
% of coal (past trend)
% of coal (current policy
projections)
Average % of coal in G20
Global benchmark for a 2°C
pathway (min & max)
Source: CAT
Brown to green: G20 transition to a low carbon economy
30
Evaluation of coal share in TPES
20
26
20
22
20
18
20
14
20
10
20
06
20
02
20
98
19
94
19
19
90
0
The share of coal is relatively low in Italy,
compared to other G20 members. In 2012,
coal accounted for 10% of the country’s total
primary energy supply. According to future
projections, the share will decrease slightly
over the years to 6% in 2030, which would be
in line with a 2°C compatible development.
Total coal consumption (TJ)
poor
medium
good
Source: own evaluation
Italy - Country Profile
Renewable energy in TPES and electricity sector
40%
1000000
35%
800000
30%
25%
600000
20%
400000
15%
10%
200000
Total renewable energy in TPES [TJ]
1200000
45%
The share of renewable energy in electricity has
risen strongly. It doubled its share in just five years
from 2007, reaching 31% in 2012. Projections
predict further increases, up to 41% in 2030. The
share of renewables in Italy’s total primary energy
supply has also increased since 2007 and currently
is on a level of 17%. Italy’s level of renewables is
rated as relatively good compared with other
countries, and the recent increase has led to a
positive trend.
5%
0
% of renewable energy
in electricity (past trend)
% of renewable energy
in TPES (past trend)
% of renewable energy
in electricity
(current policy projections)
G20 average % of
renewable energy in TPES
Total renewable energy
consumption (TJ)
20
30
20
26
20
22
20
18
20
14
20
10
20
06
20
02
19
98
19
94
19
90
0
CCPI evaluation of renewable share in TPES
Level
Sources: CCPI and CAT
Weak trend
poor
medium
good
Strong trend
very good
Electricity demand per capita
Emissions intensity of the electricity sector
Italy’s electricity demand per capita increased steadily in the
past decades. After peaking in 2007, a slight decrease set in,
but electricity demand remained at a very high level compared
to the G20 average. Future projections indicate the per capita
electricity demand will remain stable until 2030.
The emission intensity of Italy’s electricity has measurably
declined since 1990. The country’s emissions intensity is below
the G20 average and it can be expected, that decrease will
continue until 2030.
Electricity demand per capita
(past trend)
Average electricity demand
per capita in G20
Electricity demand per capita
(current policy projections)
100
30
20
26
20
22
20
18
20
14
Good practice benchmark:
without nuclear or large
hydro potential (Denmark)
Emissions intensity
(past trend)
Average emissions intensity in G20
Good practice benchmark:
with large hydro potential (Norway)
Emissions intensity
(current policy projections)
Source: CAT, 2015
20
10
20
20
06
0
02
30
20
26
20
22
20
18
20
14
20
10
20
06
20
02
20
98
19
19
19
94
0
200
20
1000
300
98
2000
400
19
3000
500
94
4000
600
19
5000
700
90
6000
19
Emissions intensity of electricity [gCO2/kWh]
7000
90
Electricity demand per capita [kWh/cap]
very poor
Source: CAT, 2015
Evaluation of the electricity
emission intensity
poor
medium
good
Source: own evaluation
Brown to green: G20 transition to a low carbon economy
Italy - Country Profile
CLIMATE POLICY PERFORMANCE
Climate policy evaluation by experts
Checklist of the climate policy framework
CCPI experts criticise Italy for lacking a coherent climate and
energy policy, reflected in its unsteady CCPI scores. On a
national level Italy’s performance is evaluated as poor.
Recent changes in renewable energy policy cut investments
and slowed growth rates. Internationally, experts criticise
Italy’s passive role in the EU, simply following EU climate
policy without being proactive. Overall, the experts rated
Italy’s performance as relatively poor.
Low emissions development plan for 2050*
2050 GHG emissions target
Building codes, standards and incentives for low-emissions options
Support scheme for renewables in the power sector
Emissions performance standards for cars
The CCPI evaluates a country‘s performance in national and international climate
policy through feedback from national energy and climate experts.
Emissions Trading Scheme (ETS)
very good
Carbon tax
good
* Understood as decarbonisation plans and not specifically as the plans called for in
the Paris Agreement
medium
Source: Climate Policy Database, 2016
poor
CCPI evaluation of climate policy
poor
medium
good
6
5
01
01
I2
CC
P
4
CC
P
I2
3
01
2
01
I2
CC
P
I2
CC
P
1
01
01
I2
0
very good
CC
P
I2
CC
P
9
01
00
I2
CC
P
I2
I2
CC
P
very poor
CC
P
00
8
very poor
CCPI edition
National
International
Source: CCPI, 2016
Compatibility of national climate targets (INDCs) with a 2°C scenario
6000
As an EU member state, Italy did not submit its own
Intended Nationally Determined Contribution
(INDC) or emissions reduction target for COP21.
Total emissions (MtCO2e/a)
5000
4000
3000
2000
1000
Max
0
-1000
Min
Historic emissions
(excluding forestry)
sufficient
Source: CAT, 2015
Brown to green: G20 transition to a low carbon economy
role model
30
20
26
20
22
20
Emissions in INDC scenario (min & max)
CAT evaluation of the EU’s Intended
National Determinded Contributions (INDC)
medium
18
Fair emissions reduction range
in a 2°C pathway
Current policy emissions
projections (excluding forestry)
inadequate
20
14
20
10
20
06
20
02
20
98
19
94
19
19
90
-2000
Under its INDC, on 6 March 2015 the EU proposed a
binding, economy-wide target to cut domestic
greenhouse gas emissions by at least 40% below
1990 levels in 2030. No individual EU member state
has its own INDC.
The Climate Action Tracker (CAT) rates the EU
emissions target as “medium”, meaning the INDC is
inconsistent with limiting warming below 2°C. It
would require other countries to make a
comparably greater effort, and much deeper
emissions reductions.
The overall level of GHG emissions reductions
proposed in the EU28 INDC does not fall within the
range of approaches for fair and equitable emission
reductions. Current policies are projected to reduce
domestic emissions by 23–35% below 1990 levels in
2030, and do not put the EU on a trajectory towards
meeting either its 2030 or 2050 targets. The EU’s
Emissions Trading Scheme is an important
instrument to achieve its 2020 and 2030 targets.
However, an accumulated surplus of emissions
allowances could dilute the 40% GHG target by 7%
in 2030. It is therefore important that the EU creates
a robust market reserve for eliminating that surplus,
to keep in line with the 40% GHG target.
Italy - Country Profile
FINANCING THE TRANSITION
Investment attractiveness
Allianz Energy and
Climate Monitor
MEDIUM
RECAI* (E&Y index)
Category (own assessment)
Climate Transparency rates Italy’s investment attractiveness as low to
medium, due to differences in positions of political parties on energy
(and climate) policy, and the limited political influence of green lobbies.
However, low policy predictability is balanced by favourable investment
potential and conditions, prior experience with green investments, and a
well-established value chain for renewables.
LOW
Sources: Allianz Energy and Climate Monitor and RECAI reports
Trend**
*Adapted from RECAI and re-classified in 3 categories
(low, medium, high) for comparison purposes with Allianz Monitor.
**Taken from RECAI issue of May 2016
The Allianz Energy & Climate Monitor ranks G20 member states on their relative fitness
as potential investment destinations for building low-carbon electricity infrastructure.
The investment attractiveness of a country is assessed through four categories: Policy
adequacy, Policy reliability of sustained support, Market absorption capacity and the
National investment conditions. The Renewable Energy Country Attractiveness Index
(RECAI) produces score and rankings for countries’ attractiveness based on Macro
drivers, Energy market drivers and Technology-specific drivers which together
compress a set of 5 drivers, 16 parameters and over 50 datasets.
Historical investments in renewable energy and investment gap
This section shows Italy’s current investments in the overall power sector (including distribution and transmission) as well as in renewable
energy expressed as the share of the total annual investments needed to be in line with a 2°C compatible trajectory.
Investments
in the power sector
% of current investments
in the power sector
compared to
the investment needs
under a 2°C pathway
79%
Investments in renewable energy
for the power sector
74%
% of current investments
for renewable energy
in the power sector
compared to
the investment needs
under a 2°C pathway
Source: Adapted from WEIO, 2014(1)
WEIO (2014) compares annual average investments from 2000 to 2013 with average annual investments needed from 2015 to 2030 under a 2°C scenario
(1)
Carbon pricing mechanisms
Emissions Trading Schemes (ETS)
An ETS caps the total level of GHG emissions and
allows industries to trade allowances based on
their marginal abatement cost. By creating a
supply and demand for allowances, an ETS
establishes a market price for GHG emissions.
Carbon Tax
Italy does not yet have a carbon tax either in place, or under
consideration. However, Italy is part of the EU-ETS, which covers
2GtCO2e of emissions and 45% of the EU’s emissions.
GHG
A Carbon tax directly sets a price on carbon by
defining a tax rate on GHG emissions or – more
commonly – on the carbon content of fossil
fuels. Unlike an ETS, a carbon tax is a price-based
instrument that pre-defines the carbon price,
but not the emissions reduction outcome of a
carbon tax.
Sources: World Bank and Ecofys, 2016; other national sources
Brown to green: G20 transition to a low carbon economy
Italy - Country Profile
Fossil fuel subsidies
88% of Italy’s energy is generated from fossil fuels, and its subsidies aim to keep energy prices low to enable equitable access to energy.
The bulk of Italy’s fossil fuel tax subsidies focus on consumption. The government provides two tax exemptions for fossil fuel production,
and direct spending for gas and coal. Under its former feed-in tariff system, Italy provided incentives for promoting new electricity
capacity from renewable as well as fossil fuel sources (through, e.g. cogeneration, heat recovery, etc.). Italy abolished this system for plants
built after 2009 and considered an accelerated phase-out process for existing contracts. So far, agreements have been negotiated for
1GW of installed capacity, to be phased out.
Average annual
national subsidies (2013-14)*
Italy
G20 total
% of government’s income
from oil and gas production (2013)*
1.2 billion
0.2%
$70 billion
Source: ODI, 2015
*The indicators above refer only to subsidies for fossil fuel production, and include direct spending (e.g. government budget expenditure on infrastructure that
specifically benefits fossil fuels), tax expenditure (e.g. tax deductions for investment in drilling and mining equipment) and other support mechanisms (e.g.
capacity mechanisms).
Public climate finance
Of all the G20 countries, Italy has contributed the least climate finance, both in absolute terms and relative to GDP. It has made the sixth
smallest G20 pledge to the GCF. Italy’s contribution includes export credits to support Italian companies to invest in developing countries.
Green Climate Fund
pledge
Average climate finance
provided (2013-14)
$
$
$
+
$0.3
$0.06
billion
billion
bilateral
climate finance
multilateral
climate funds
$0.05 billion
$0.01 billion
Source: ODI, 2016
Brown to green: G20 transition to a low carbon economy
Italy - Country Profile