Italy

Italy has an Integrated National Energy and Climate Plan which has reduction targets for GHG including those not covered by ETS (33% against 2005) and a 30% gross final consumption of renewable energy by 2030. It also sets targets in energy efficiency, security, research and innovation. While the plan indicates that the measures and initiatives included will lead to a 64% emission reduction by 2050, it does not, however, present a long-term strategy to achieve climate neutrality by 2050.

Italys Budget Law contains measures regarding plan for public investment in the development of an Italian Green New Deal. There is an inter-ministerial committee for economic planning including sustainable development to align public investment decisions with the SDGs. There is also inter-ministerial working group on climate change, to ensure alignment between National Integrated plan, the strategic programme to combat climate change, and local planning. In addition, at the end of February 2021, the Draghi government created a new Ministry for Ecological Transition with key competences in the process of moving towards an ecological (just) transition, focusing mainly on the energy sector. Some branches of the Ministry for Economic Development will be integrated by the new Min. for Ecological Transition, supported by an Interministerial Committee for the Ecological Transition-CITE (coordinating national policies and planification of the transition).

The consultation process for the revision of the National Plan for Sustainable Development includes different stakeholders during all stages including more than 200 NGOs. These NGOs were involved in providing a valuable contribution to the context analysis and useful inputs to reflect the vision of the 2030 Agenda into the NSDS. Among the others, the Italian Alliance for Sustainable Development (ASviS), which gathers over 150 organizations in the economic and social field, launched in May 2017 the first Sustainable Development Festival, a large-scale awareness raising campaign to foster cultural-political reflections on the issue across the country. However, institutionalized public engagement procedures are not very proactive and gender-inclusive procedures are not incentivised sufficiently (although there is a commitment in relevant policy documents). In addition, ethnic minorities are too often left out of the public discourse. Nonetheless, there are good practices at community level but not structured in a national network. In terms of labours participation in company management, employers must consult with employee representatives on different topics, but there is no right to employee board level representation in Italy. In this sense, trade unions are weak and apparently not able to reach out to the most vulnerable in the Italian labour market (i.e. youth, women, ethnic minorities).

Italy has a National Plan for Sustainable Development, currently under revision (expected revision every three years). There are national initiatives and events (mainly on awareness raising, capacity building and networking) but not included within a strategic framework. For instance, the national CSR fair (Il salone della CSR e dell'Innovazione Sociale). Moreover, the Ministry of Environment (now Min. of Ecological Transition) launched a Forum initiative for Sustainable Development in 2019: the Forum qualifies as a shared work space for the civil society and institutions, where practices of sustainability can emerge and affirm, according to a process of meeting public policies with social energies, having as reference the operating mode of the EU Multistakeholder Platform. The general objective of the Forum is to accompany the implementation of the Agenda 2030 through the active contribution of the actors who promote actions and policies in favor of sustainability. However, there are no updated info on this initiative. Similarly, the Stati Generali della Green Economy (since 2012): promoted by the National Council of the Green Economy, is made up of 69 business organisations that represent the green economy in Italy, in collaboration with the Ministry of Environment and the European commission.

Italy has a Natural Capital Committee. It provides some data on the current status of the Natural Capital in Italy and issues a number of recommendations. The mandate of the Law 221/2015 is to provide a measure of physical and economic dimensions of Natural Capital stocks and flows. The Italy Statistical Service (ISTAT) also collects data on "social protection accounts" which is made "to gather under one accounting structure the national accounts flows related to Secondary distribution of income account and Redistribution of income in kind account". ISTAT also collects data on 'environmental goods and services accounts' (market output of environmental goods and services). The ISTAT measure of wealth also includes Cultural Heritage and Landscape: "The landscape, the richness and the quality of the artistic, archaeological and architectural heritage have a particular relevance in the Italian case". Moreover, the Italian Institute for Environmental Protection and Research, ISPRA (Istituto Superiore per la Protezione e la Ricerca Ambientale), has been established by Decree no. 112 of 25 June 2008, converted into Law no. 133 (with amendments) on 21 August 2008. It collects data and develop indicators as part of the National Environmental Information System (SINA).

In 2016 Italy celebrated a National Dialogue for Sustainable finance, to identify challenges and suggest policy options for enhancing sustainable finance. The dialogue led to 18 options grouped around four areas. A report from Banca d'Italia highlighted the need on the part of companies and investors to achieve a more comprehensive understanding of potential financial consequences associated with climate change. Steps to improve would require defining methodologies that allow the climate scenarios to be part of the decision-making processes of financial institutions. However, no details were found on financial reform proposals under development evidence of green finance not being part of the public debate at the moment.

Law (221/2015) provides that contractors who register with the EMAS will enjoy a reduction in the amount of guarantees they must post in order to carry out new government contracts and to qualify for the renewal of existing ones. The same benefit accrues to contractors who obtain the EU Ecolabel and to producers that seek to reduce polluting emissions by implementing measures that mitigate climate change. However, there is no evidence that there are tax incentives in place for the adoption of these certifications. Italy also has implemented tax deductions for energy renovation (decarbonisation and energy efficiency objectives), including building restoration, and its 'Industry 4.0' plan (energy efficiency objectives). However, there is no clear engagement on a structured long-term green fiscal reform in Italy. There was some debate going on on this before the COVID-19 pandemic, but nothing significant and the political instability of the last decade hasn't helped in this sense. Overall, so far, green taxes and subsidies have been mainly exploited for the achievement of socio-economic goals, often without an ex-ante/ex-post assessment of their effects on the environment. There is still need to switch to a more environmental perspective: "tackling environmental challenges in an effective way, aligning taxes to closer reflect environmental damage, benefits and priorities, and without having revenue-generating potential as the first driving force of future initiatives" (see A. Zatti, 2019).

The Banca d'Italia conducts a regular Supervisory Review and Evaluation Process in accordance with European regulation - though the assessment focuses on capital, liquidity and governance risks as well as institution-wide controls. At present, social and climate related risks are not included but the European Central Bank (ECB) has announced plans to conduct its first supervisory climate stress test on EU banks during the course of 2022. The test builds on the results of the ECB's economy-wide climate stress test released in September 2021, and will assess the vulnerability and preparedness of individual financial institutions.

Italy is subject to the European Union Emissions Trading Scheme. Latest Directive reinforcing the commitment of all sectors in the economy to contribute to the reduction of GHG emissions still has to be implemented. Italy does not have an explicit carbon tax, but according to OECD sources, it prices most carbon emissions from energy use, with part of them priced above EUR 30 per tonne of CO2. It also priced nearly all of industry emissions through taxes, permits, or both instruments at effective carbon rates below EUR 30.

Italy is implementing measures in the construction sector through tax deductions in housing projects related to energy efficiency, installation of solar photovoltaic systems and charging points for vehicles. No specific sector plan with a focus of guiding sectors towards sustainability was found, however. In addition, Italy is developing the Impresa 4.0 plan but does not seem to have particular sustainability/green focus. There are investments in energy saving technologies including transport with grants related to green transport/sustainable mobility, but with no particular focus in countries' industries. Significantly, at the end of February 2021, the Draghi government created a new Ministry for Ecological Transition (MiTE) with key competences in the process of moving towards an ecological (just) transition, focusing mainly on the energy sector. Some branches of the Ministry for Economic Development will be integrated by the new Min. for Ecological Transition, supported by an Interministerial Committee for the Ecological Transition-CITE (coordinating national policies and planification of the transition). In addition, the 2021 Recovery and Resilience Plan under revision (see section on COVID recovery) states that 7 billion will be allocated to the Green Business and Circular Economy component, the objectives of which are, on the one hand, the promotion of environmental sustainability in the agricultural supply chain and the strengthening of the competitiveness of farms, and, on the other hand, the construction of new waste-to-energy plants to complete the cycle and the modernisation of existing ones. Investments will be made to improve separate waste collection and the conversion of biogas.

A specific social enterprises general framework was introduced in 2005/06. New legislation was enacted in 2016/17 introducing changes with a view to providing a common framework for both the non-profit sector and social enterprises. The Budget law provides grants to business to fund investment in the circular economy, descarbonisation of the economy, reducing emissions, energy saving and environmental sustainability, as well as to retain and train workers to play a role in innovation. In addition, a ISTAT experimental statistics on business behaviour and sustainable development was introduced in March 2020: "Istat has, therefore, started an initiative at experimental level in order to collect information directly to the enterprise level, aiming to elaborate some new indicators on sustainability spreading and orientation by the Italian business. The goal of the project launched by Istat is to give an integrate informative picture, continuing in evolution, useful in particular for analyzing the businesses economic performances (i.e. productivity of labor), who adopted business models oriented to sustainable development. The aim of this experimental statistics is, therefore, to spread the first data, analyzing business characteristics in terms of environmental and social sustainability and their relationship with the traditional economic measures." 2) Enterprises (especially SMEs) recognize sustainability as a way to overcome the economic crisis and are asking for clear institutional guidance on the paths to undertake as well as on green finance.

The National Integrated Energy and Climate Plan (PNIEC) targets a 33% cut in emissions by 2030 even though European Green Deal targets a 50-55% reduction, for non-ETS sectors. No specific targets for overall GHG compared to 1990 levels. Legislative Decree 47 of 9 June 2020 implemented EU Directive on the EU's ETS, and has introduced legislation governing cuts to emissions from air transport.

The Integrated National Energy and Climate Plan establishes the objective of having 30% share of energy from renewable sources in the gross final consumption of energy by 2030, a 22% share of energy from renewables in the gross final consumption of energy in the transport sector, and a 1.3% annual increase in the share of renewables for heating and cooling. Objectives are in line with EU for 2030. Regarding electricity sector solar power is expected to become main source of renewable. Measures to achieve the specific electricity target beyond 2022 still have to be budgeted and approved. On heating and cooling are, it is not clear how is to be accomplished since measures to be implemented are not assessed in terms of contribution to the target. Finally, concerning transport, plan includes support to advanced biofuel, penetration of electric vehicles and modal shift to increase efficiency. Infrastructure policies are in place to create networks for electric vehicles and alternative fuels.

According to Green Italy and Fondazione Symbola, there has been a significant increase in green jobs from 2015 to 2019 and now there are around 3 million green jobs in the country (13,4% of total occupation). This appears to have been fostered by the government's incentives for eco-investments and youth employment addressing in particular the agro-business and renewable energy sectors of the recent years, and by an increased recognition of "green" curricula. There are also many job platforms providing information on green jobs and green skills development (for instance: greenjobs.it). However, there is no national strategy addressing specifically green jobs creation, but there are estimates that Implementing the Integrated Energy and Climate plan will create 117.000 temporary jobs each year until 2030. Green job creation and inequality issues (concerning gender, youth and the South) are mentioned in the different sections of the PNRR (National Recovery and Resilience Plan) currently under revision by the Italian government, indicating a commitment in this area. In addition, the PNRR also includes a commitment on industrial conversion from brown to green. However, this is not without controversy as can be seen, for instance, in the emblematic Arcelor Mittal/ex-Ilva case for which a tripartite agreement hasn't been reached yet (since 2012).

The Italian government has developed a framework plan for southern Italy, "Piano Sud 2030" which has some aspects linked to sustainable development goals, including efforts to combat educational poverty among children, efforts to strengthen commitment to the Green Deal in the south ("a greener south"), or new industrial policy supporting technology transfer and strengthening links between research and business. The "Decreto Semplificazioni" (Simplification Decree), aimed at promoting the simplification of procedures has implications over environmental impacts assessments. It affects the simplification of authorisation procedures for the green economy and renewable energy sources. Although it introduces innovations, it is a risk that may lead to increase of corruption and abuse which can have repercussions in land consumption and hydrogeological risks. However, there remains no clear recognition by the government of the link between environmental health and poverty reduction at a strategic level. Despite this, the PNRR (Recovery and Resilience Plan) currently under discussion states that it aims at tackling inequality and poverty issues through the actions towards an ecological transition. Educational poverty refers in particular to school dropout and to the North-South divide. The pandemic and the switch to elearning for public education have highlighted also a significant technological divide that is going to exacerbate the above mentioned differences.

Italys Integrated National Energy and Climate Plan went through consultation of different stakeholders including social partners, civil society and general public, as did the Sustainable Development Strategy, to gather comments and proposals, including on the measures identified. However, a national strategy for participatory policymaking in Italy lacks serious implementation. There are some guidelines and outdated government resources, but these are not publicized enough nor are they supported by effective and accessible national (virtual) platforms. However, there are several examples of good inclusive practices at the municipal level (i.e. Milano, Reggio Emilia, Bari, Napoli, Bologna, Torino e Verona), with again significant differences among regions and North-South. Participatory policymaking in Italy has always passed through political parties and their local offices ("circoli"). However, during the last two decades, these "circoli" have gradually lost the grip/connection they used to have with citizens. Within Italian parties, the 5Stars movement has tried to foster bottom-up participation by creating a webplatform (Piattaforma Rousseau) where it discusses with its electorate/supporters the decision that the party will take during the most controversial parliamentary sessions. However, the tool itself has been considered very controversial and often presents many technical issues.

Last budget laws include Citizens' Basic Income Scheme primarily based on income support, measures aimed at improving access to housing and its quality and other limited measures aimed at increasing equal opportunities and reducing unequal outcomes. No general strategy/innovations on social protection or green pilot schemes were found. No pilots found; social welfare models remain largely traditional in nature. A few community ownership projects do exist, focusing mainly on community welfare and social innovation such as the provision of basic services to the most vulnerable (especially the poor, the elderly, migrants). Others with a "greener" touch may involve community green farms or urban gardens. However, these are all citizen and/or civil society initiatives, in some cases supported by Foundations and lacking official promotion or support from government.

Italys Law 221/2015 refers to marine environment, but is not significant for the purposes of achieving SDG14, as it mostly ensures compliance with requirements related to environmental impact assessments. A specific law concerning marine waste and circular economy still under debate and some budget law measures including innovation in agriculture, organic farming and reducing pollution may contribute to SDG 15. Significantly, there is no mention of environmental protection in the PNRR under discussion, which is noteworthy given the orographical characteristics of Italy and the tight connection existing between the environment and the economy in the country (i.e. agriculture, sustainable tourism). A new National Forestry Strategy entered in 2020 in comment phase.

Italy has a Natural Capital Committee that provides some data on the current status of the Natural Capital in Italy and issues a number of recommendations. The mandate of the Law 221/2015 is to provide a measure of physical and economic dimensions of Natural Capital stocks and flows as well as ex ante and ex post assessment of the effects of public policies on Natural Capital and Ecosystem Services. ISTAT collects data on 'environmental goods and services accounts' (market output of environmental goods and services). Natural capital accounting includes a project for environmental accounting system for Italian Marine Protected Areas.

The Natural Capital Committee issues a periodic report on the state of natural capital to the Presidency of Council of Ministers and to the Ministry of Economy and Finance a Report on the state of the Natural Capital in Italy' including data expressed in both physical and monetary units, as well as ex ante and ex post assessment of the effects of public policies on Natural Capital and Ecosystem Services. It is composed of institutional (government) members along with experts appointed by the Italian minister of Environment, Land & Sea. In addition, the Ministry of Environment has been substituted by the Ministry of Ecological Transition and there is also a Permanent Commission on Environment, Land Conservation and Public Works in the Parliament, examining projects and issuing law proposals and amendments on the subjects above.

Italys National Climate plan includes action plans to phase out a list of energy subsidies, particularly fossil fuels. Specific actions seem to remain limited, however. Budget law (2020) set up a Committee to study proposals for reducing subsidies that are harmful to the environment and put development of an Italian Green new deal, supporting innovation, investment in I+D of infrastructure for use in environmental reconversion. Tax deduction for energy renovations and structural renovations.