ENVIRONMENTALLY HARMFUL AND ENVIRONMENTALLY BENEFICIAL SUBSIDIES

    Panel 1
    Data aggiornamento scheda
    Autori

    Antonio Caputo

    Abstract
    Grafici interattivi
    Abstract

    In 2021, the fifth edition of the Catalogue of Environmentally Relevant Subsidies identified a total of 168 measures, resulting in €22.4 billion in environmentally harmful subsidies and €18.6 billion in environmentally beneficial subsidies (an increase of +16.3% and a decrease of -1.7%, respectively, compared to the previous year). Subsidies totaling €11.5 billion are classified as of uncertain attribution (down by -15.8% from 2020). Among the environmentally harmful subsidies, those related to fossil fuels amounted to €14.5 billion in 2021 (Figure 1 and Table 1).

    Descrizione

    The indicator classifies subsidies based on their environmental impact as beneficial, harmful, or uncertain. These subsidies include incentives, tax breaks, soft loans, and tax exemptions aimed directly at environmental protection. They are divided into two main categories: direct subsidies (e.g., grants, concessions) and indirect subsidies (e.g., tax expenditures, exemptions). Indirect subsidies also include implicit subsidies, which can arise from the regular tax system and may promote or encourage behaviors and consumption (or production) choices that are either beneficial or harmful to the environment. The indicator provides information on direct and indirect incentives for energy resources, supporting tax system reform aimed at decarbonizing the economy and promoting environmentally sustainable activities.

    Scopo

    Summarizing subsidies with beneficial and harmful environmental impacts is intended to provide policymakers with the information needed to phase out harmful subsidies and adopt, strengthen, and optimize environmentally beneficial ones.

    Rilevanza
    È di portata nazionale oppure applicabile a temi ambientali a livello regionale ma di significato nazionale
    È in grado di descrivere la tendenza senza necessariamente fornire una valutazione della stessa.
    È semplice, facile da interpretare.
    Fornisce una base per confronti internazionali.
    Solidità
    È basato su standard nazionali/internazionali e sul consenso nazionale/internazionale circa la sua validità
    È ben fondato sul piano tecnico e scientifico.
    Presenta affidabilità e attendibilità dei metodi di misurazione e raccolta dei dati
    Comparabilità nel tempo
    Comparabilità nello spazio
    Misurabilità (dati)
    Adeguatamente documentati e di fonte nota
    Aggiornati a intervalli regolari e con procedure affidabili
    Facilmente disponibili o resi disponibili a fronte di un ragionevole rapporto costi/benefici
    Un’ “adeguata” copertura spaziale
    Un’ “idonea” copertura temporale
    Principali riferimenti normativi e obiettivi

    Article 68 of Law No. 221 of December 28, 2015 established the “Catalogue of Environmentally Harmful and Environmentally Beneficial Subsidies” under the Ministry for the Environment and Protection of Land and Sea (now MASE), to be managed using existing human, financial, and technical resources without additional public expenditure. The same article mandates the catalogue to be updated annually by June 30.

    The main objectives of the catalogue are:
    a) to identify interventions for tax reform in accordance with the “polluter pays” principle;
    b) to reduce taxes on labor and businesses while recovering tax revenue through environmental taxation targeting harmful consumption and production;
    c) to reduce overall tax expenditures.

    DPSIR
    Risposta
    Tipologia indicatore
    Efficacia delle politiche (D)
    Riferimenti bibliografici

    MASE, Catalogue of Environmentally Harmful and Environmentally Beneficial Subsidies

    Fonte dei dati

    MASE (Ministry of the Environment and Energy Security)

    Frequenza di rilevazione dei dati
    Annuale
    Accessibilità dei dati di base

    MASE, Catalogue of Environmentally Harmful and Environmentally Beneficial Subsidies https://www.mase.gov.it/pagina/catalogo-dei-sussidi-ambientalmente-dannosi-e-dei-sussidi-ambientalmente-favorevoli

    Copertura spaziale

    National

    Copertura temporale

    2016-2021

    Descrizione della metodologia di elaborazione

    The definition of "subsidy" used in the catalogue aligns with the OECD definition and includes, among other things, incentives, tax breaks, soft loans, and tax exemptions directly aimed at environmental protection. Both direct subsidies and tax expenditures are included. Various methodologies (e.g., quick scans, checklists) are analyzed to identify subsidies, and different approaches are used for their quantification (e.g., price gap, marginal social cost, external costs), aiming to provide policymakers with solid data to eliminate harmful subsidies and enhance beneficial ones.

    Periodicità di aggiornamento
    Annuale
    Data quality

    The information is compiled by MASE and is relevant for efforts to decarbonize the economy and reduce greenhouse gas emissions. The indicator offers a summary of the country’s financial commitment toward supporting renewable energy and discouraging fossil fuel use.

    Stato
    Scarso
    Trend
    Stabile
    Valutazione/descrizione dello stato

    In 2021, environmentally harmful subsidies amounted to €22.4 billion, while environmentally beneficial subsidies totaled €18.6 billion and subsidies of uncertain classification reached €11.5 billion

    Given the high share of environmentally harmful subsidies (42.7%), the country can be assessed as performing poorly in this regard.

    Valutazione/descrizione del trend

    Compared to 2016, all categories of environmental subsidies have increased. Environmentally harmful subsidies grew by +10.1%, while environmentally beneficial subsidies increased more significantly (+15.0%), and those of uncertain attribution saw the largest rise (+35.7%), indicating a slightly improving trend.

    Commenti

    In 2021, compared to the previous year, environmentally harmful subsidies rose by +16.3%; environmentally beneficial subsidies declined by -1.7%, while uncertain subsidies decreased by -15.8%. Subsidies are categorized into "Agriculture and fisheries", "Energy", "Transport", "Other subsidies", "Reduced VAT". These categories follow international classifications and reflect each sector’s environmental impact. In 2021 the "energy" and "reduced VAT" categories absorbed nearly 90% of environmentally harmful subsidies; the "energy" and "agriculture and fisheries" categories accounted for over 80% of environmentally beneficial subsidies; the "reduced VAT" and "agriculture and fisheries" categories covered nearly 90% of subsidies with uncertain classification (Table 1). Analysis by category also shows year-over-year increases in environmentally harmful subsidies in "other subsidies" (+30.8%), "energy" (+19.0%) and "reduced VAT" (+13.2%). Meanwhile, "agriculture and fisheries" and "transport" categories remained stable.

    Grafici interattivi
    Allegati
    Titolo

    Table 1: Estimated total annual subsidies by sector and type (million euros)

    Fonte

    MASE: Ministry of the Environment and Energy Security

    Legenda

    SAD: Environmentally Harmful Subsidy; SAF: Environmentally Beneficial Subsidy; U: Uncertain (to be quantified)

    Thumbnail
    Titolo

    Figure 1: Total annual subsidies by environmental impact category

    Fonte

    ISPRA elaborations based on MASE data

    English