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Costs and benefits of the green transitionenvisaged in the Italian NRRP - An evaluation using the social cost of carbon

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  • Alpino, Matteo
  • Citino, Luca
  • Zeni, Federica

Abstract

We perform an analysis of the green investments contained in the Italian National Recovery and Resilience Plan (NRRP) by comparing environmental benefits to the investment cost. We compute the future discounted environmental benefits in terms of expected greenhouse gases emission reductions using various estimates of the Social Cost of Carbon. Our results suggest that several projects would not have a positive net present value, unless the discount rate is relatively low and benefits accruing to developing countries receive a higher weight. The fact that investments under the NRRP are financed via long-term debt helps in bridging the gap between costs and environmental benefits. Investments in renewable energy are an exception, as their environmental benefits outweigh the cost within a short time-frame.

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  • Alpino, Matteo & Citino, Luca & Zeni, Federica, 2023. "Costs and benefits of the green transitionenvisaged in the Italian NRRP - An evaluation using the social cost of carbon," Energy Policy, Elsevier, vol. 182(C).
    • Handle: RePEc:eee:enepol:v:182:y:2023:i:c:s0301421523003294
    DOI: 10.1016/j.enpol.2023.113744
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    Cited by:

    1. Qian Zhou & Feng Gui & Benxuan Zhao & Jingyi Liu & Huiwen Cai & Kaida Xu & Sheng Zhao, 2024. "Examining the Social Costs of Carbon Emissions and the Ecosystem Service Value in Island Ecosystems: An Analysis of the Zhoushan Archipelago," Sustainability, MDPI, vol. 16(2), pages 1-19, January.
    2. Gaetano Basso & Fabrizio Colonna & Domenico Depalo & Graziella Mendicino, 2023. "The Green Transition and the Italian labour market," Questioni di Economia e Finanza (Occasional Papers) 811, Bank of Italy, Economic Research and International Relations Area.

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    More about this item

    Keywords

    Social cost of carbon; National recovery and resilience plan;

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • P18 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Energy; Environment

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