2 research outputs found
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 represent 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,
than in terms of the impact in 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, resultant 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
flows in physical terms (GWh) while all other flows are expressed in monetary terms (e). 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