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Efficiency and sustainable development: challenges for business and government

    • Milan
    • 7 April 2014

          Discussions at this National Interest event were kicked off with the observation that Italy needs a more systemic and cross-cutting culture of sustainability and efficiency: the former in order to build a green society, and the latter to achieve improved energy efficiency and a more prudent use of natural resources. To that end, it was deemed essential that a strategic plan be devised which takes the Italian public duly into account, with efforts made to raise wider awareness particularly with respect to energy costs. Indeed, it was stressed that there are large potential savings to be made both on household energy bills, as well as in the treatment of household and business waste.

          A second issue considered concerned the role of regulation, which it was felt should facilitate coordination between stakeholders, and, at the same time, promote technological development. It was suggested that the environmental field in Italy is characterized by an unclear allocation of responsibilities, and that the strategic importance of the environment calls for related powers to be vested at the national state level. Italy was also seen as suffering from a certain lack of planning ability on the part of public decision-makers, as demonstrated by policies in support of electricity generation from renewable sources, particularly with reference to intermittent renewables.

          Also considered crucial was the role played by the market in stimulating both economic and energy efficiency. Indeed, the use of “market tools“ that enable the correct assessment of the value of resources was seen as fundamental, as exemplified by Italy’s precise charges for urban solid waste, its landfill tax to discourage disposal in favor of waste recovery, and its extension of the liability (for disposal costs) of original producers of waste to cover the whole life cycle of goods (in application of the polluter pays principle). New market opportunities are also emerging for the Italian industrial sector, with the thriving fully-fledged market linked to “climate change adaptation” being one such example.

          The participants were at pains to underline the need to promote integration and amalgamation, especially in the area of waste management, which in Italy is carried out through small-scale facilities and infrastructure compared with those in the rest of Europe. In this case, it was felt that the greater efficiency gains achievable through the use of larger facilities could be reflected in lower costs for users. There were thus calls for the removal of obstacles to the upscaling of waste management, subject always to adherence to environmental sustainability.

          A core theme for sustainability and efficiency is that of technology and innovation, especially in cases where Italian technologies hold significant market shares along certain value chains but have scope to expand into other sectors. As a case in point, the participants cited the examples of land clean-ups and energy recovery, as well as reduced-energy manufacturing, which have made the Italian producers of such technologies world market leaders. In this regard, it was felt that the propensity for innovation – in addition to the resulting environmental and social quality – represent a strong point vis-à-vis potential investors.

          The participants also acknowledged the crucial role played by the research industry and academia in promoting innovative processes. It is research, for instance, that has led to the identification of the disruptive technologies necessary to significantly reduce the environmental impact of human activities.

          Finally, emphasis was placed on the need for a systemic approach to technology, as demonstrated by “urban regeneration” projects, which aim to “transform cities” through the involvement a variety of industry and energy sectors as well as technologies. Public decision-makers were called on to take responsibility for addressing issues of sustainability, moving beyond a crisis management approach and improving their medium- to long-term planning capacity. In this regard, it was felt that there is a strategic role to be played by the European Union, which in most cases provides clear guidelines that should govern the action of national decision-makers, albeit subject to fully taking into account the country’s specific characteristics.