Ambrosetti Forum 2022: a faster transition will bring concrete benefits for Italy

Only by accelerating its commitment to decarbonization will Italy be able to truly achieve the European targets for the reduction of CO₂ emissions by 2050. But if it does, it will save 548 billion euros and generate more new jobs than a less ambitious plan.

These are the findings of the Net Zero E-conomy 2050 study presented September 3 at the Cernobbio Forum traditionally held by The European House – Ambrosetti at Villa d’Este on Lake Como. A road map for decarbonization in Europe, created by the Enel Foundation and The European House - Ambrosetti, in collaboration with our Group, and focusing on Italy and Spain. A clear need emerged for the two economies to accelerate investments in order to decarbonize not only energy production using renewable sources, but also industry, transport and real estate assets, electrifying final consumption as much as possible and upgrading networks to make them increasingly smarter.

More ambition, better results

The study defined and compared two scenarios in order to identify a possible path forward to achieve our goal of zero emissions by 2050 (the “Net Zero” scenario) and compare its economic, social and environmental impacts to those of a less ambitious scenario (the “Low Ambition” scenario).

The “Net Zero” scenario applied to Italy by the study calls for investments of 3,351 billion euros over the period 2021-2050, which is less than the 3,899 billion euros required for the “Low Ambition” scenario. This confirmed that a more decisive acceleration of decarbonization would require fewer resources than a reduced ambition scenario, and would also have a better economic effect: according to the data analysis, for every euro spent to achieve zero emissions by 2050, 1.64 euros would be generated compared to 1.59 euros in the “Low Ambition” scenario. Growth in Gross Domestic Product (GDP) would be 140 billion euros, which is 2.6 million more jobs compared to 2.1 million in the “Low Ambition” scenario.

Goals unattainable at the current speed

As stated by Valerio De Molli, Managing Partner and CEO of The European House-Ambrosetti, “now more than ever, timely decisions and actions need to be put in place to facilitate a rapid change of course.” In fact, at the current rate, Italy would not reach its national greenhouse gas reduction targets for 2050 until 2109. In 28 years, as regards the production of renewable energy, the difference would be 60.7 percentage points from the targets, and 35.1 million tons of oil equivalent (Mtoe) for energy efficiency.

Actually, until 2018, Italy boasted a positive track record in the development of renewables and in the improvement of energy efficiency, which allowed the country to reach and exceed the 2020 objectives originally set at a European level both for the reduction of greenhouse gas emissions and for the share of renewable energy sources. However, in the last 3 to 4 years there has been a drastic slowdown: “The main obstacle to the development of renewable energies,” says the President of our Group Michele Crisostomo, “is caused by the authorization procedures, but it’s not the only hurdle. The complexities of governance in identifying areas suitable for their development and difficulties in identifying the competent authorities to issue permits also weigh heavily. Italy’s transition is still too slow, but it must be done decisively because the investments necessary to eliminate CO₂ emissions by 2050 are lower than those necessary to reduce them.”

Greater energy independence

The Net Zero E-conomy 2050 study also explains that decarbonization is key to achieving energy independence. While the European Union depends on fossil fuel imports for 57% of its energy (a share that remained virtually unchanged between 2000 and 2020), Italy is in second place in the natural gas dependency index with a value of 41.2%.

The “Net Zero” scenario would result in the reduction of the energy dependency index, especially in Italy. In particular, increased penetration of renewables by 2030 (63% of total generation) and 2050 (98% of total generation), together with electrification and energy efficiency, would reduce energy dependence to 56.7% by 2030 (compared to 68.3% with the current trend and 63.5% with the “Low Ambition” scenario) and to zero by 2050 (compared to 57.9% with the current trend and 31.3% with the “Low Ambition” scenario).

Reducing imports of fossil fuels from other countries is a necessary condition and is achievable only through increased energy production from renewable sources, which are the most efficient tools for reducing emissions and increasing energy independence.

The proposals

To accelerate the path towards a zero-emissions economy, the study specifies two prerequisites and five proposals. The first prerequisite is the need to ensure stability, transparency and consistency of European, national and local energy policies and measures. The second is to support industrial production in upgrading existing green technologies, as well as developing new green solutions by eliminating fossil fuel subsidies.

The five proposals for a zero-emissions economy are:

• a cross-sectoral proposal ensuring a stronger form of cooperation and a greater degree of harmonization in the governance of the energy transition at the European level.
• in the electricity sector, simplifying authorization procedures for renewable plants, facilitating interventions on energy infrastructures, and promoting demand-side management and the wide-spread deployment of storage facilities and flexibility solutions.
• in transportation, streamlining procedures for the construction of charging infrastructures, strengthening collaboration among all electric mobility players, promoting interoperability, optimizing grid connection times and promoting the electrification of Local Public Transport (LPT).
• for the industrial sector, leveraging legal frameworks to support the technological shift towards greener solutions, creating technology transfer laboratories for direct and indirect electrification solutions, and promoting demand-response systems.
• In the context of buildings, establishing the phasing out of fossil fuel boilers and creating a one-stop shop to support the renovation of buildings.