IDEAS home Printed from https://ideas.repec.org/a/spr/climat/v160y2020i4d10.1007_s10584-019-02543-1.html
   My bibliography  Save this article

Macro-economic analysis of green growth policies: the role of finance and technical progress in Italian green growth

Author

Listed:
  • Leonidas Paroussos

    (E3-Modelling)

  • Kostas Fragkiadakis

    (E3-Modelling)

  • Panagiotis Fragkos

    (E3-Modelling)

Abstract

The transition to a low-carbon economy is a complex process that, from a technical perspective, requires coordination of different market players, significant technology advancements and sufficient financial resources. The transition to a low-carbon energy system is a capital intensive process. Different technological options at different scales and different time frames will be required for the successful transition to a low-carbon energy system. The economic impact on countries that transform their energy system depends on a multitude of factors including their energy system profile, the access to low-cost financial resources, whether they are market leaders in the production of clean energy technology and their ability to assimilate knowledge that is produced elsewhere. In this study, we use a large scale applied CGE model to compute the macroeconomic implications of the investments required to reduce by 76% as compared to 1990 levels the GHG emissions of the Italian energy system within a context of global concerted GHG mitigation action. The focus of the analysis has been on the Italian economy and energy system as Italy is both an equipment manufacturer, its energy system is largely based on fossil fuels and its financial system is currently under pressure following the elevation of public debt and deficits. The model-based results suggest that the Italian economy can benefit from the low-carbon transition in the coming decades in case Italian firms and households have access to low-cost financial resources, Italian manufacturers acquire market shares in the production of clean energy technologies and technological progress is rapid driven by innovation and economies of scale. The average annual GDP growth of Italy in the period 2015–2050 can be 1.3% in the case that Italy reduces drastically its GHG emissions and the associated cumulative expenditures sum up to one trillion euro.

Suggested Citation

  • Leonidas Paroussos & Kostas Fragkiadakis & Panagiotis Fragkos, 2020. "Macro-economic analysis of green growth policies: the role of finance and technical progress in Italian green growth," Climatic Change, Springer, vol. 160(4), pages 591-608, June.
    • Handle: RePEc:spr:climat:v:160:y:2020:i:4:d:10.1007_s10584-019-02543-1
    DOI: 10.1007/s10584-019-02543-1
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10584-019-02543-1
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10584-019-02543-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Leonidas Paroussos & Antoine Mandel & Kostas Fragkiadakis & Panagiotis Fragkos & Jochen Hinkel & Zoi Vrontisi, 2019. "Climate clubs and the macro-economic benefits of international cooperation on climate policy," Nature Climate Change, Nature, vol. 9(7), pages 542-546, July.
    2. Kober, Tom & Summerton, Philip & Pollitt, Hector & Chewpreecha, Unnada & Ren, Xiaolin & Wills, William & Octaviano, Claudia & McFarland, James & Beach, Robert & Cai, Yongxia & Calderon, Silvia & Fishe, 2016. "Macroeconomic impacts of climate change mitigation in Latin America: A cross-model comparison," Energy Economics, Elsevier, vol. 56(C), pages 625-636.
    3. Mauleón, Ignacio, 2016. "Photovoltaic learning rate estimation: Issues and implications," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 507-524.
    4. Björn Nykvist & Måns Nilsson, 2015. "Rapidly falling costs of battery packs for electric vehicles," Nature Climate Change, Nature, vol. 5(4), pages 329-332, April.
    5. Florian Egli & Bjarne Steffen & Tobias S. Schmidt, 2018. "A dynamic analysis of financing conditions for renewable energy technologies," Nature Energy, Nature, vol. 3(12), pages 1084-1092, December.
    6. Babatunde, Kazeem Alasinrin & Begum, Rawshan Ara & Said, Fathin Faizah, 2017. "Application of computable general equilibrium (CGE) to climate change mitigation policy: A systematic review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 78(C), pages 61-71.
    7. Adenle, Ademola A. & Manning, Dale T. & Arbiol, Joseph, 2017. "Mitigating Climate Change in Africa: Barriers to Financing Low-Carbon Development," World Development, Elsevier, vol. 100(C), pages 123-132.
    8. Cohen, Gail & Jalles, Joao Tovar & Loungani, Prakash & Marto, Ricardo & Wang, Gewei, 2019. "Decoupling of emissions and GDP: Evidence from aggregate and provincial Chinese data," Energy Economics, Elsevier, vol. 77(C), pages 105-118.
    9. Ian W.H. Parry & Baoping Shang & Mr. Philippe Wingender & Nate Vernon-Lin & Tarun Narasimhan, 2016. "Climate Mitigation in China: Which Policies Are Most Effective?," IMF Working Papers 2016/148, International Monetary Fund.
    10. Seung Jung Lee & Lucy Qian Liu & Viktors Stebunovs, 2017. "Risk Taking and Interest Rates : Evidence from Decades in the Global Syndicated Loan Market," International Finance Discussion Papers 1188, Board of Governors of the Federal Reserve System (U.S.).
    11. Jean-Francois Mercure & Florian Knobloch & Hector Pollitt & Leonidas Paroussos & S. Serban Scrieciu & Richard Lewney, 2019. "Modelling innovation and the macroeconomics of low-carbon transitions: theory, perspectives and practical use," Climate Policy, Taylor & Francis Journals, vol. 19(8), pages 1019-1037, September.
    12. Rezai, Armon & Taylor, Lance & Foley, Duncan, 2018. "Economic Growth, Income Distribution, and Climate Change," Ecological Economics, Elsevier, vol. 146(C), pages 164-172.
    13. Rubin, Edward S. & Azevedo, Inês M.L. & Jaramillo, Paulina & Yeh, Sonia, 2015. "A review of learning rates for electricity supply technologies," Energy Policy, Elsevier, vol. 86(C), pages 198-218.
    14. Chaturvedi, Vaibhav & Clarke, Leon & Edmonds, James & Calvin, Katherine & Kyle, Page, 2014. "Capital investment requirements for greenhouse gas emissions mitigation in power generation on near term to century time scales and global to regional spatial scales," Energy Economics, Elsevier, vol. 46(C), pages 267-278.
    15. P. Capros & Denise Van Regemorter & Leonidas Paroussos & P. Karkatsoulis & C. Fragkiadakis & S. Tsani & I. Charalampidis & Tamas Revesz, 2013. "GEM-E3 Model Documentation," JRC Research Reports JRC83177, Joint Research Centre.
    16. Flaherty, Michael & Gevorkyan, Arkady & Radpour, Siavash & Semmler, Willi, 2017. "Financing climate policies through climate bonds – A three stage model and empirics," Research in International Business and Finance, Elsevier, vol. 42(C), pages 468-479.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Radek Doskocil, 2022. "The Multicriteria Assessment of the Green Growth in the Context of the European Union’s Green Deal," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 24(61), pages 739-739, August.
    2. Michel G. J. Elzen & Ioannis Dafnomilis & Nicklas Forsell & Panagiotis Fragkos & Kostas Fragkiadakis & Niklas Höhne & Takeshi Kuramochi & Leonardo Nascimento & Mark Roelfsema & Heleen Soest & Frank Sp, 2022. "Updated nationally determined contributions collectively raise ambition levels but need strengthening further to keep Paris goals within reach," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 27(6), pages 1-29, August.
    3. Will McDowall & Tobias Reinauer & Panagiotis Fragkos & Michal Miedzinski & Jennifer Cronin, 2023. "Mapping regional vulnerability in Europe’s energy transition: development and application of an indicator to assess declining employment in four carbon-intensive industries," Climatic Change, Springer, vol. 176(2), pages 1-23, February.
    4. Lingling Cao & Huawei Niu, 2022. "Green Credit and Total Factor Carbon Emission Performance—Evidence from Moderation-Based Mediating Effect Test," IJERPH, MDPI, vol. 19(11), pages 1-19, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kostas Fragkiadakis & Panagiotis Fragkos & Leonidas Paroussos, 2020. "Low-Carbon R&D Can Boost EU Growth and Competitiveness," Energies, MDPI, vol. 13(19), pages 1-29, October.
    2. Polzin, Friedemann & Sanders, Mark & Serebriakova, Alexandra, 2021. "Finance in global transition scenarios: Mapping investments by technology into finance needs by source," Energy Economics, Elsevier, vol. 99(C).
    3. Cai, Yongxia & Woollacott, Jared & Beach, Robert H. & Rafelski, Lauren E. & Ramig, Christopher & Shelby, Michael, 2023. "Insights from adding transportation sector detail into an economy-wide model: The case of the ADAGE CGE model," Energy Economics, Elsevier, vol. 123(C).
    4. Samadi, Sascha, 2018. "The experience curve theory and its application in the field of electricity generation technologies – A literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 2346-2364.
    5. Reinhard Haas & Marlene Sayer & Amela Ajanovic & Hans Auer, 2023. "Technological learning: Lessons learned on energy technologies," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 12(2), March.
    6. Wen, Jun & Zhang, Sen & Chang, Chun-Ping & Anugrah, Donni Fajar & Affandi, Yoga, 2023. "Does climate vulnerability promote green investment under energy supply restriction?," Energy Economics, Elsevier, vol. 124(C).
    7. F.H.J. Polzin & M.W.J.L. Sanders, 2019. "How to fill the ‘financing gap’ for the transition to low-carbon energy in Europe?," Working Papers 19-18, Utrecht School of Economics.
    8. Weitzel, Matthias & Vandyck, Toon & Rey Los Santos, Luis & Tamba, Marie & Temursho, Umed & Wojtowicz, Krzysztof, 2023. "A comprehensive socio-economic assessment of EU climate policy pathways," Ecological Economics, Elsevier, vol. 204(PA).
    9. Janos Varga & Werner Roeger & Jan in ’t Veld, 2021. "E-QUEST – A Multi-Region Sectoral Dynamic General Equilibrium Model with Energy Model Description and Applications to Reach the EU Climate Targets," European Economy - Discussion Papers 146, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    10. Zoi Vrontisi & Ioannis Charalampidis & Ulrike Lehr & Mark Meyer & Leonidas Paroussos & Christian Lutz & Yen E. Lam-González & Anastasia Arabadzhyan & Matías M. González & Carmelo J. León, 2022. "Macroeconomic impacts of climate change on the Blue Economy sectors of southern European islands," Climatic Change, Springer, vol. 170(3), pages 1-21, February.
    11. Bachner, G. & Mayer, J. & Steininger, K.W. & Anger-Kraavi, A. & Smith, A. & Barker, T.S., 2020. "Uncertainties in macroeconomic assessments of low-carbon transition pathways - The case of the European iron and steel industry," Ecological Economics, Elsevier, vol. 172(C).
    12. Mauleón, Ignacio, 2019. "Optimizing individual renewable energies roadmaps: Criteria, methods, and end targets," Applied Energy, Elsevier, vol. 253(C), pages 1-1.
    13. Thomassen, Gwenny & Van Passel, Steven & Dewulf, Jo, 2020. "A review on learning effects in prospective technology assessment," Renewable and Sustainable Energy Reviews, Elsevier, vol. 130(C).
    14. Philipp Beiter & Aubryn Cooperman & Eric Lantz & Tyler Stehly & Matt Shields & Ryan Wiser & Thomas Telsnig & Lena Kitzing & Volker Berkhout & Yuka Kikuchi, 2021. "Wind power costs driven by innovation and experience with further reductions on the horizon," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 10(5), September.
    15. Lancker, Kira & Quaas, Martin F., 2019. "Increasing marginal costs and the efficiency of differentiated feed-in tariffs," Energy Economics, Elsevier, vol. 83(C), pages 104-118.
    16. Dafermos, Yannis & Nikolaidi, Maria, 2019. "Fiscal policy and ecological sustainability: a post-Keynesian perspective," Greenwich Papers in Political Economy 37777, University of Greenwich, Greenwich Political Economy Research Centre.
    17. Ranjit R. Desai & Eric Hittinger & Eric Williams, 2022. "Interaction of Consumer Heterogeneity and Technological Progress in the US Electric Vehicle Market," Energies, MDPI, vol. 15(13), pages 1-25, June.
    18. Bustos, Cristian & Watts, David & Olivares, Daniel, 2019. "The evolution over time of Distributed Energy Resource’s penetration: A robust framework to assess the future impact of prosumage under different tariff designs," Applied Energy, Elsevier, vol. 256(C).
    19. Few, Sheridan & Schmidt, Oliver & Offer, Gregory J. & Brandon, Nigel & Nelson, Jenny & Gambhir, Ajay, 2018. "Prospective improvements in cost and cycle life of off-grid lithium-ion battery packs: An analysis informed by expert elicitations," Energy Policy, Elsevier, vol. 114(C), pages 578-590.
    20. Choi, Donghyun & Kim, Yeong Jae, 2023. "Local and global experience curves for lumpy and granular energy technologies," Energy Policy, Elsevier, vol. 174(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:climat:v:160:y:2020:i:4:d:10.1007_s10584-019-02543-1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.