On 17 April, a referendum was held in Italy on rules governing off shore drilling licenses. As Biagio Carrano and Irene Monasterolo write, this relatively niche issue nevertheless produced a full-blown political contest, involving heavy infighting inside the government coalition. They argue that these events illustrate the Italian government is still more concerned with protecting the interests of powerful industrial lobbies than it is with stimulating the economy and employment through investments in renewable energy

Carrano, Biagio

Monasterolo, Irene

LSE Research Online

4/23/2016Italy’s oﬀ shore oil referendum: Another lost opportunityblogs.lse.ac.uk/europpblog/2016/04/23/italys-oﬀ-shore-oil-referendum-another-lost-opportunity/On 17 April, a referendum was held in Italy on rules governing oﬀ shore drilling licenses. As BiagioCarrano and Irene Monasterolo write, this relatively niche issue nevertheless produced a full-blown political contest, involving heavy inﬁghting inside the government coalition. They argue thatthese events illustrate the Italian government is still more concerned with protecting the interests ofpowerful industrial lobbies than it is with stimulating the economy and employment throughinvestments in renewable energy.The referendum held in Italy on 17 April can be considered an interesting case study of how a tool ofdirect democracy on a speciﬁc matter can be deprived and twisted, paving the way to an increase incitizens’ dissatisfaction. The question on the ballot paper was simple: to allow concessionaries of oﬀshore drilling licenses up to 12 miles from the coast to exploit the oil and gas ﬁelds only until the endof concession or until exhaustion, as is the case now.It is important to point out that Italy’s oil and gas reserves are relatively small. The production of allthe 79 active oil and gas oﬀ shore rigs represent less than 4% of national annual consumption andthe royalties are among the lowest in the world, between 7 and 10%. The referendum itself fell well below theturnout threshold of 50%, with only just over 31% of voters choosing to take part. Aside from the nature of thequestion put to voters, there was also a distinct lack of information available. For instance, oﬃcial data released byAgCom show that from 4-10 April all of the editions of the news produced by RaiUno, the main channel of the State-owned RAI, devoted only a little over 13 minutes to the subject.In a top-down strategy to invite Italians not to vote, the Prime Minister, Matteo Renzi, the former President of theRepublic, Giorgio Napolitano, and the majority of the ruling Democratic Party explicitly campaigned for abstention.After the results, the failure of the referendum was hailed by them as a political victory. But in a country ravaged byanti-party sentiment and populism, can this failure really be considered a success of the ruling coalition?A lost opportunityThe supporters of the referendum have stated that aside from the speciﬁc question put to voters, the overall purposewas to overcome the country’s dependence on fossil fuels and to push it towards a greener economy, opening up apublic debate about which energetic and industrial policy the country wants to pursue. As it transpired, this debatenever ﬂourished in the weeks before the referendum, and Renzi counted on the failure of the vote to strengthen hisposition against opposition parties and critical voices inside his Democratic Party, mainly on the left of the party.There are nevertheless at least two consequences that are important for the country moving forward. First, thereferendum represented another lost opportunity for rethinking the government’s energy policies. In 2014, Renzicampaigned on the notion of a “smart” and greener economy. But, following his rise to power after the suddendismissal of Enrico Letta, Renzi’s government increased subsidies to fossil fuels, which reached 13.2 billion euros in2014, up from 12.8 billion euros in 2013.At the same time, the government introduced a retroactive regulation on feed-in tariﬀs paid to renewable energysources, revised the regulation on ﬁscal incentives for renewable energy production, and intervened on electricityprices, making it harder for households to connect to the grids and deliver the energy created with solar panels.These interventions increased uncertainty on the market. Italy is also lagging behind in terms of governmentincentives for renewable energy sources, which have stopped at a mere 11 billion euros. This is less than half thanwhat is spent in Germany (23 billion), where renewable energy sources produce over 50% of electricity, according to1/3the latest ﬁgures issued by the IMF and Greenpeace.What does this mean in terms of sustainable and inclusive development in Italy? It means, ﬁrst of all, damage to thejob market. In 2015, 4,000 jobs were lost in the wind energy sector after the change in energy regulation. Findingsby Greenpeace and Althesys suggest that investing in renewable energy sources would put the Italian economy onthe move again after more than 20 years of recession, and estimate that such a policy could create 100,000 jobs.This is more than three times the workers employed by Fiat-Chrysler in Italy.Cutting greenhouse gas emissions, and thus allowing the country to meet its emission targets as pledged at theCOP21 conference in Paris, would also greatly help the environment. Instead, persisting uncertainty on rules andregulation, and the persisting inﬂuence of fossil fuels energy producers and the automotive sector in Italy in thepolitical arena, could lead Italy further away from the rest of Europe, which is (slowly) moving toward a low carboneconomy.The ﬁnancial crisis represented a missed opportunity for the EU as well as for Italy, where the solution of secure andwell known austerity policies was preferred to the introduction of a green deal for Europe. Recently, greeninvestments have been proposed as a way to meet the key challenge of macro-economic recovery, i.e., the lack ofaggregate demand (as shown by Joseph Stiglitz), while others such as Mariana Mazzucato have called for theintroduction of a green deal.As has been noted by these authors, a green investment programme instead of austerity measures for the globaleconomy could have stimulated growth and employment, thus addressing increasing inequality. Mazzucato’sanalysis shows that the transition toward a green economy requires a stream of innovation in the green sector, oftendirected by policy makers. Few countries in Europe are thus more in need of elaborating strategic choices tosupport green industries than Italy. The country’s leadership should support the development of new companiesoperating in the ﬁeld, enhancing sustainable economic growth.The progressive detachment from politics of a signiﬁcant portion of the Italian population represents the secondsigniﬁcant problem illustrated by the referendum. A strong bottom-up movement which is able to push decision-makers to cope with these urgent questions is, for now, lacking. The latest developments have exposed agovernment more focused on the interests of traditional industries – fossil fuels as well as ﬁnancial sectors – than itis on the need to reform institutions and policy governance, promote popular participation, and deﬁne a new modelfor sustainable development and global competitiveness.Against this backdrop, the failed referendum on 17 April did not come as a surprise. It should however raisesigniﬁcant concerns about the increasing dissatisfaction of Italian citizens with the public goods, politics and natureof the Italian state.Please read our comments policy before commenting .Note: This article gives the views of the author, and not the position of EUROPP – European Politics and Policy, norof the London School of Economics.Shortened URL for this post: http://bit.ly/1SoJNx5_________________________________2/3Biagio CarranoBiagio Carrano is a consultant and lecturer specialised in transition economies and digitization. Heis the founder and director of eastCOM Consulting, a Belgrade-based consultancy in businessdevelopment for Small and Medium Enterprises operating in Balkan countries. Biagio is also thefounder and editor-in-chief of Serbian Monitor and a lecturer at Il Sole 24 ORE Business School inItaly.Irene Monasterolo – Boston UniversityIrene Monasterolo is an economist with experience in complex systems thinking applied to theanalysis of coupled human-natural systems, with a focus on climate risk of impact on resourcedepletion, food security and political instability, green ﬁscal and monetary policies modelling andclimate ﬁnance risk analysis, and the governance of evidence based sustainability policies. She hasworked as a scientist in academia and as a consultant for the World Bank, European InvestmentBank and Inter-American Development Bank. Currently, she is a post-doctoral associate at theFrederick S. Pardee Center for the Study of the Longer Range Future, Boston University, where sheworks at the development of a System Dynamics – Agent Based Model to simulate the role of green ﬁscal andmonetary policies within the context of international trade and climate agreements (e.g., the TTIP agreement). SinceOctober she coordinates the research area on Environment-Economics interaction of the European Association forEvolutionary Political Economy.3/3

Italy’s off shore oil referendum: another lost opportunity

Abstract

Similar works

Full text

Available Versions

LSE Research Online