The road traced by Italy to fight the climate crisis is a path where instead of repairing, the damage is amplified. In 2021, Italy spent 41.8 billion euros on activities and projects linked directly (13.4 billion) or indirectly (28.4 billion) to fossil fuels, those which, as we know, contribute most to emissions that intensify the climate emergency. This is a good 7.2 billion euros more (+21%) than in 2020. The alarm, on the dangerous path we are travelling, is launched by Legambiente through the report “Stop environmentally harmful subsidies” (here the .pdf) presented at the XV edition of the Qualenergia Forum. According to the environmental association, the risk is that these contributions could still grow today due to current energy policies based on gas and regasification plants.
“The total number of loans to SAD (environmentally harmful subsidies) is destined to increase also in 2022 due to the effects of the Capacity Market with over 1 billion euros a year for 15 years, to which must be added 30 million a year, from 2024 to 2043 for a total of 570 million, dedicated to the two regasification terminals of Piombino and Ravenna. Without forgetting the resources spent for the energy emergency equal to approximately 38.9 billion euros” explains Legambiente looking to the future. On the contrary, however, the environmental association points out, around 14.8 billion used in fossil fuels could already be eliminated within three years if investments were made in renewable resources, networks, efficiency and a different type of mobility. Currently, most of the SADs are now linked to the energy sector, with around 12.2 billion spent and – more or less with the same figure – to transport and construction.
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If you look at the trend, with data from 2011 to 2021, you can see how Italy has continued to subsidize fossil fuels more and more: going from 9.1 billion in loans about ten years ago to 41.8 billion in 2021, with a total expenditure of 213.9 billion euros “destined, directly or indirectly, to the Oil & Gas sector“. Money that “prevented the development of at least 13 GW/year of renewable sources, capable of producing 19 TWh/year of electricity, or about 6% of the national electricity requirement” explain the environmental association.
If, instead of investing in fossil fuels, the same funding had been transferred to electrification and renewable sources in the last decade, the country would have had “a saving in gas consumption of 4 billion cubic meters a year, reaching a total of 44 billion cubic meters after 11 years, equal to 59.4% of national gas consumption”. To reverse the course it would therefore be necessary to eliminate the investments “planned for drilling and funds for gas, coal and oil research, as well as the tax breaks for company cars, the different tax treatment between petrol, diesel, LPG and methane, the Capacity Market for gas-fired plants and access to the Eco-bonus for gas boilers”, resources to be replaced with “renewables, networks, efficiency, mobility, reclamation and much more” write the environmentalists.
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Seven proposals for the ecological transition
With the aim of suggesting another way forward, Legambiente has therefore presented seven proposals addressed to the government of Giorgia Meloni and in particular to the Minister of the Environment and Energy Security Gilberto Pichetto Fratin. First of all, it is requested that “the budget law under discussion envisages the remodulation and cancellation of environmentally harmful subsidies by 2030”. Then it is necessary to “annually update the Catalog of Environmentally Harmful Subsidies (SAD) and Favorable Subsidies (SAF)”, review the taxation on the various fossil fuels and cancel all existing excise tax exemptions according to the “polluter pays” principle by linking taxation to emissions of greenhouse gases. The fourth point indicates that “out of 32 items of subsidies that can be eliminated immediately, equal to 14.8 billion euros, it is necessary to intervene by 2025 by eliminating the resources”. Another key step is an effort for less well-off countries: “Italy must commit for the period 2023-2025 to mobilize at least 4.7 billion a year so as to guarantee “its fair share” of the collective commitment of 100 billion of industrialized countries”, all through “resources that can be found by cutting subsidies to fossil fuels”.
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Finally, in addition to investing in renewables, it is asked to “review the system of system charges in the bill, eliminating direct subsidies, shifting subsidies and improper items to general taxation”. As he explains Stephen Ciafanipresident of Legambiente, to design a low-emissions future therefore requires “discontinuity and courage. To get out of dependence on foreign countries, we need to speed up the diffusion of energy communities and build many large plants using renewable sources, from offshore wind farms to land, passing through agro-voltaics, but it is essential to speed up the authorization procedures. The Italian economy can be decarbonised by remodulating and eliminating subsidies to fossil fuels and the budget law may already be the first opportunity to do so. The government should not lose this important occasion in the name of independence from abroad”.