Assessment of the actions to reduce CO2 emissions in the Italian power system

Aim of the paper is to assess, by means of a scenario analysis, the effectiveness and costs of different actions to reduce CO₂ emissions in the Italian power system, i.e. increase of the efficiency of both fossil and renewable generation technologies, use of carbon capture and storage technologies, development of renewable energy sources through the implementation of incentive schemes and increase of the efficiency in electricity end-uses. The study shows that all the actions taken into account are not sufficient to achieve the CO₂ emissions target hypothesized for 2020. Only high penalties on CO₂ emissions, such as the ones deriving from the application of an additional carbon tax, causing a complete switch from coal to gas (with a consequent hardly acceptable dependency on natural gas), could reduce the distance from the target to an amount that could reasonably be covered by the Kyoto protocol flexible mechanisms.

I. Introduction

Climate change is recognized as one of the key challenges the world is facing in the 21^st century. Within this context, the Council of the European Union decided to achieve at least a 20% reduction of greenhouse gas emissions by 2020 compared to 1990. The general approach to reduction of CO₂ emissions foresees the implementation of domestic policies, together with the use of the flexible mechanisms established by the Kyoto Protocol. Such measures affect all economic sectors but, due to its relevant emission levels, the electricity sector plays an important role in this strategy.