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Energy: Making the transition happen

  • Venice
  • 5 October 2024

        The energy transition is at a crucial juncture. The geopolitical crises of recent years have raised concerns over the increasingly serious effects of climate change, making the transition not only urgent but also highly advantageous. 

        Indeed, changing the energy paradigm would ensure both the economy and society a better future with regard to major factors such as strategic supply autonomy and the health costs associated with pollution (responsible in Europe for 300,000 deaths a year). It would also help reduce the energy costs weighing so heavily on the manufacturing sector of a fossil fuel-poor country such as Italy. This element is so pivotal, and so capable of conditioning the country’s competitiveness, as to have now surpassed classic indicators such as cost of labor per product unit in importance. And while the energy transition calls for a global effort, regional strategies differ. China is surely the most invested in transition-promoting technologies, while the United States is able to count on its own strong domestic gas-based autonomy. American investments in the energy transition are not unlike those of Europe in size, but excessive EU fragmentation and governance uncertainties seem to be penalizing the Old World, which ends up playing the role of global regulator while others innovate. And yet, being the standard setter allows the West (with Europe out front) to maintain an important competitive edge. China, for instance, recently followed Brussels’ approach, obliging its listed companies to adopt sustainability reporting requirements comparable to those imposed by Europe.

        The European strategy in this field also offers Italian enterprises an opportunity to satisfy compliance requirements. Even more importantly, it encourages a radical updating of business models. In general, a greater and more cohesive effort is needed if the country intends to take advantage of the opportunities offered by the energy transition. Commitments undertaken in Europe risk being hindered by inadequate planning, contradictory standards and a permissive system with a lack of clear priorities. This clogs administrative procedures and creates structural delays.

        The necessary legislative changes must go hand in hand with a cultural shift. The widespread NIMBY (not in my backyard) syndrome that obstructs the construction of new, even “green”, energy infrastructure, has been joined by the NIMTO (not in my term of office) attitude taken at various levels of government where strategic decision-making languishes. Rather, it is necessary to attempt new paradigms geared to the evolving environmental sensibilities of the younger generations: those “digital natives” that are becoming increasingly “sustainability natives” are determined to revolutionize life and consumer styles. Change also permeates the legal field. Indeed, in 2022, environmental protection was added to the Italian Constitution, “not least in the interests of future generations”, and given a higher priority than freedom of economic initiative. And the Constitutional Court, weighing in on the so-called Priolo Decree of June 2024, reconfirmed that principle. 

        Ignoring and failing to govern the transition at European, national and local levels would mean missing a chance to turn the process made so urgent by climate change into a driver of economic and social development. Managing the transition well, on the other hand, would generate lasting benefits for everyone.