Costs and benefits of the green transition envisaged in the italian NRRP. An evaluation using the Social Cost of Carbon

Matteo Alpino (), Luca Citino and Federica Zeni
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Matteo Alpino: Bank of Italy

No 720, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: We perform a cost-benefit analysis of the green investments contained in the Italian National Recovery and Resilience Plan (NRRP). We compute the future discounted benefits in terms of expected emission reductions using various estimates of the Social Cost of Carbon, and compare them with the investment cost. Our results suggest that several projects would not have a positive net present value, unless policymakers are willing to use relatively low discount rates and give higher weight to benefits accruing to developing countries. The fact that investments under the NRRP are financed via long-term debt helps in bridging the gap between costs and benefits. Investments in renewable energy are an exception, as their benefits outweigh the cost within a short time-frame.

Keywords: inflation density; inflation risk premium; objective probability (search for similar items in EconPapers)
JEL-codes: C22 C58 E31 E44 G12 (search for similar items in EconPapers)
Date: 2022-10
New Economics Papers: this item is included in nep-ene, nep-env, nep-mfd and nep-ppm
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Costs and benefits of the green transitionenvisaged in the Italian NRRP - An evaluation using the social cost of carbon (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_720_22

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