Francesca Severini

The Economic Impact of the Green Certificate Market Through the Macro Multiplier Approach

In the last decade, as many other European countries, the Italian Government adopted several reforms in order to increase the use of Renewable Energy Sources (RES). The liberalization of the electricity market that represents one of these reforms aims to reach environmental benefits from the substitution of fossil fuel with renewable sources. The Italian Green Certificate market was introduced in 2002 in order to accomplish this objective and represents a mechanism where a quota of renewable electricity is imposed to suppliers in proportion to their sales. The electricity industries are obliged to meet this condition by producing the quantity of renewable electricity by means of a change in their production process, otherwise they must buy a number of certificates corresponding to the quota. This mechanism changes the importance of the electricity industry first in promoting climate protection, then in terms of the impact on the economy as a whole. A policy aimed to develop the market of green certificates may lead to environmental improvement by switching the energy production process to renewable resources. But above all an increase in demand for green certificates, resulting from a reform on the quota of renewable electricity, can generate positive change in all components of the industrial production. For this purpose, the paper aims to quantify the economic impact of a reform on Green Certificate market for the Italian system by means of the Macro Multiplier (MM) approach. The analysis is performed through the Hybrid Input-Output (I-O) model that allows expressing the energy ows in physical terms (GWh) while all other ows are expressed in monetary terms (€). Moreover, through the singular value decomposition of the inverse matrix of the model, which reveals the set of key structures of the exogenous change of final demand, we identify the appropriate key structure able to obtain both the expected positive total output change and the increase of electricity production from RES.

Environmental tax and regional government consumption expenditure in a fiscal federalism system

The increasing attention to climate changes have led national Governments to design environmental tax policies able to face environmental problems and their associated economic consequences like as a negative change of GDP. The environmental taxation in particular is considered a powerful instrument of pollution control. More important, it provides public revenue that can be recycled at local level in order to attain the regional double dividend in a fiscal federalism framework. In this respect, we use a Computable General Equilibrium (CGE) model with imperfect labour market, to assess the regional effects of an environmental fiscal reform designed with the aim of reducing the CO2 emissions in a fiscal federalism setting. In particular, we introduce a local green tax on commodities output with a progressive structure. The tax burden depends on the commodity polluting power. According to fiscal federalism principles the tax revenue is collected by the local Government and it is entirely recycled to finance the local consumption expenditure. The application is done on a bi-regional Social Accounting Matrix for Italy and the results highlights the distributional effects of the reform on macroeconomic variables into the bi-regional income circular flow.

Gender policy and female employment: a CGE model for Italy

ABSTRACT The gender integration in all areas of policy choices and at all stages of the decision-making process is strongly recommended by the European Union and represents an achievement that the Member States should accomplish when implementing policy measures. In a country like Italy, where the level of female labour participation is among the lowest in Europe, policy maker decisions should encourage and stimulate the demand for female labour without neglecting the global employment rate and income growth. The multisectoral analysis offers the possibility to bridge gender disaggregation within income formation and distribution from the production phase to the demand formation. In this perspective, this paper develops a gender-aware CGE model based on the gender-aware SAM for the Italian economy to evaluate the impact of different fiscal policies aimed to reduce female labour cost and trigger woman hiring in those sectors with high gender disparity.

The Third Age in the National Health System: A Proposal for Increasing the Spending Effectiveness in Health Care for the Elderly

The allocation among Institutional Sectors of Health Care Expenditure for the Elderly can be designed in a way that new processes can be activated that stimulate total output and overall employment. The impacts of these processes as they emerge from several policy scenarios in all phases of income circular flow within the economic system, can be determined with reference to the model of computable general equilibrium (CGE) calibrated on the Social Accounting Matrix (SAM) data set. The HCEE is placed within the economic flows of a bi-regional SAM for Italian economy which provides the data set for a CGE model where the hypothesis of involuntary unemployment is also considered. Two policy scenarios are then simulated to evaluate the impact of the policy reform in HCEE on total output and unemployment. Under the first scenario the Regional Government reduces the expenditure in integrated home care assistance (ADI) in order to directly increase the demand of private residential health care (ARA) services; under the second scenario the Regional Government transfers the resources saved by reducing ADI to the Households in order to stimulate their demand of ARA.

Green and blue dividends and environmental tax reform: dynamic CGE model

The challenge of climate change needs to be tackled with environmental policies carefully designed to achieve environmental benefits and avoid negative economic effects. The introduction of an environmental tax in the economic system can generate a double benefit represented by the attainment of the environmental target (first or green dividend) and other additional benefits (second/third or blue dividends) represented by gains in welfare, employment, consumption etc. In this perspective, the general equilibrium analysis is able to quantify the environmental and welfare direct and indirect effects that an environmental policy generates within the economic system. Since international environmental agreements set clear target deadlines on the reduction of GHG emissions, in this chapter a dynamic CGE model based on a bi-regional SAM framework for Italy is developed.

Unconventional monetary policy expansion: the economic impact through a dynamic CGE model

The ongoing economic stagnation and low inflation rates affecting EU have refuelled the debate on the role and the limits of monetary policy in pushing the economic growth. Given the tight margins for fiscal policy for EU state members, traditional and unconventional monetary policies are becoming more looked-for to break out of this condition. However, the main issue on whether the real or nominal aspects prevails still remains. In this situation, a framework able to identify and analyse any interaction between economic and financial flows becomes crucial to detect the dynamics pushing towards expansions or contractions resulting from monetary policies. Therefore, the aim of this paper is to investigate the direct and indirect impact of monetary policies implemented by the European Central Bank on the main Italian macroeconomic variables both in aggregate and disaggregate terms. For this purpose we use dynamic computable general equilibrium (CGE) model calibrated on the financial social accounting matrix for Italian economy.

The Role of ICT in the Italian Health Care System

The size of the Italian expenditure for the health care on Gross Domestic Product (GDP) and on total public expenditure, is in line with those of the major industrialized countries, and somewhat lower than the European average. The Italian healthcare sector does not simply face a contraction of the expenditure: in effect, it should be highlighted that Italy currently does not spend “a lot” and, above all, invests “little” in the mentioned sector. Nevertheless, the health sector can be a very important flywheel for the economic recovery, provided that a lot of attention is paid, and the best resources are invested. In this work, the authors intend developing an analysis of the desirability of investment on Information and Communication Technologies (ICT) in the health sector, and the consequent compatibility with current expenditure, by identifying at the outset the channels multipliers related to the resources at present allocated to the current health expenditure and capital account. For this analysis, two different simulation scenarios have been considered: in the first, an increase in Health services demand by Government has been studied, while in the second, an increase in final demand of Health services by Households has been considered.

Investments and Sustainability of Public Expenditure in the Health Sector

The impact of the Italian expenditure for the health care on Gross Domestic Product (GDP) and on total public expenditure, is in line with those of the major industrialized countries, and somewhat lower than the European average. The issue of the Italian health sector is not simply related to the contraction of the expenditure: in effect, it should be highlighted that Italy currently does not spend “a lot” and, above all, invests “little” in the mentioned sector. Nevertheless, the health sector can be a very important flywheel for the economic recovery but, in order to make this possible, it is necessary to pay a lot of attention, and to invest the best resources. In this work, the authors intend to develop an analysis of the desirability of investment on Information and Communication Technologies (ICT) in the health sector, and the consequent compatibility with current expenditure, by identifying at the outset the channels multipliers related to the resources at present allocated to the current health expenditure and capital account.