Blowing in the Wind: The Infiltration of Sicilian Mafia in the Wind Power Business

Public policies in the last 20 years have promoted in Italy the investment in renewable energy sources within the framework of climate change policies. Investment in renewables received generous incentives, leading also in Sicily to a rapid expansion in the capacity installed. We analyse whether rents from wind investment may have attracted Sicilian mafia. We argue that the wind business is particularly attractive when a criminal organization invests in the regular economy. We find that the probability of observing a wind farm in a municipality is higher, once controlled for geographical and political factors, if there is a mafia family embedded, identifying a causal link from mafia presence to wind investment. Moreover, the involvement of mafia groups adapted to the changing regime in incentives around 2012, moving from large investments, direct involvement or the provision of intermediation services to small scale investments in the municipalities where the families are rooted. These results are consistent with the episodes unveiled in judicial inquiries in Sicily. We compare these results with the case of Apulia, where large wind investments have been supported by an environmentally committed regional government and where the judges did not find evidence of a massive penetration of the local organized crime in the wind business. We show that the location of wind farms in this region depends on favourable geographical conditions but is not correlated with the presence of organized crime, consistently with the negative evidence from judicial inquiries.