Environmental Kuznets Curves for Greenhouse Gas emissions. Evidence from Italy using National Accounts Matrix including Environmental Accounts and provincial panel data

This article provides a new empirical evidence on delinking and Environmental Kuznets Curves (EKC) for Greenhouse Gas (GHG) emissions in Italy. Two panel datasets – sector disaggregated National Accounts Matrix including Environmental Accounts emissions (1990–2001) and geographically disaggregated emissions at provincial level (1990–2000) – are analysed. We find mixed evidence supporting the EKC hypothesis. EKC evidence is present for GHGs when focusing on production activities, while the picture changes, in particular for CO2, when analysing the economy as a whole, including private activities. As expected, aggregate trends hide heterogeneous sectoral dynamics to a large extent. From a policy perspective, the investigation highlights that the reduction in GHG emissions in Italy in recent years has been driven largely by production activities, especially industry, which may have been responding to or anticipating environmental regulation. Nevertheless, the absence of any real decoupling in the economy as a whole is probably linked to inefficiencies in the household sector, especially transport, where not even a relative delinking has occurred, which seems to point to the need for incremental efforts towards higher efficiency and stronger regulation.