Analysing the interactions of energy and climate policies in a broad policy ‘optimality’ framework: the Italian case study

The paper investigates the effectiveness and efficiency of energy-environmental policy interactions in Italy, adopting a broad optimality perspective that includes policy feasibility and dynamic efficiency. The analysis highlights that though some complementarity among different policies exists, climate policies have been often undermined by energy and renewables policy. Nevertheless, some complementarities between policy landscapes are found, as in the case of the Kyoto Fund (climate policy) and of the incentives and funding towards thermal energy, both acting as a complementary tool to cover non-EU-ETS sectors. Overall, renewables oriented policies bring about efficacy, but this often occurs at the expenses of their efficiency, thus generating a trade-off between these two components of optimality. Finally, incentives remuneration of renewables and also energy efficiency investments give a mixed signal to improve innovation and to stimulate the green sector. In conclusion, notwithstanding efficacy is present in some case, cost effectiveness and efficiency are far from being optimal, and it would be better to provide a clear and durable price signal using carbon taxation tools.