Energy transition: delay increases costs and reduces GDP benefits

A delayed energy transition would be more costly. The zeroing of pollutant emissions by 2050 would bring fewer benefits to the national GDP if the change were concentrated in just two decades, i.e. starting in 2030 and not taking advantage of the next six years. Estimating the impact of investments to reach the carbon neutrality target, shared at European level, is the new study carried out by Asvis and the international research centre Oxford Economics, which will be presented tomorrow in Ivrea as part of the opening event of the Festival of Sustainable Development.

Four future scenarios are hypothesised, in addition to the baseline scenario that starts from current GDP estimates: the first two (net zero and net zero transformation) both simulate 'green' investments and innovations in order to achieve neutrality in 2050, the second in particular due to the introduction of structural reforms and incentives to stimulate private investments capable of generating an economic shock; the third scenario is the late transition scenario, in which processes and investments are postponed to 2030 and reinforced to achieve the same objectives in a shorter timeframe; finally, the fourth scenario envisages a 'climate catastrophe', in the event of inaction and policy failure.

In the first two scenarios, counteracting action would start already today, achieving carbon neutrality by 2050. At the finish line, the average global temperature would rise to 1.6 °C, and then fall back to 1.5 °C in 2100, falling within the target of the Paris Agreement. In 2050, Italy's GDP would be just 0.4 per cent lower than current estimates (net zero) or even 2.2 per cent higher if the transition were accompanied by policies that stimulate innovation (net zero transformation). In this case, reforms, increased spending and investments would increase productivity and also reduce unemployment.

If, however, action were to be delayed (i.e. without acceleration before 2030, in the third scenario), then the temperature increase would rise to 1.7 °C and the estimated GDP would fall by three percentage points compared to expectations. Thus lower benefits and higher costs than in the early scenario. Finally, the last scenario - without intervention - would lead to an increase of 2.3 °C to 2050, a 30% reduction in Italian GDP and an increase in unemployment.

The simulation takes into account the estimation of physical damage related to the average increase in temperature, thus based on the impact of climate anomalies and extreme events on productivity. In this case, the damage increases the longer the risk mitigation process is postponed. Furthermore, the study assumes the introduction of a carbon tax, which would place a greater burden on the population if introduced only from 2030: a delayed intervention to be spread over fewer years.