Climate change is addressed in a number of ways in Italy, which has firmly committed to the United Nations Framework on Climate Change. Italy has recently ratified the Paris Agreement by means of the Law of 4 November 2016, No. 204, and the Italian Ministry of the Environment has declared that 'for Italy, a green economy is a clear and irreversible choice. On climate change there is no way back.'
In 2006, greenhouse gas emissions trading was established, and it is now governed by Legislative Decree of 13 March 2013, No. 30.
A number of incentives are in place for renewable energy and are generally granted for the whole duration of the life of the plant. In 2017, the Italian Constitutional Court upheld the legitimacy of a law that retroactively reduced the incentives contractually granted to operators of photovoltaic plants. The decision was based on, inter alia, the following arguments:
- the sudden decrease in the costs of production of energy in the photovoltaic energy market, which the Court took into account to justify the retroactive effect of the law under scrutiny;
- the law was also deemed reasonable and proportionate because it did not completely eliminate the incentives but reduced them by 6–8 per cent, providing alternative compensative measures for the affected operators (e.g., the possibility to obtain subsidised loans);
- the law reduced energy costs for consumers, who were charged for the incentives through a component of the energy tariff. The Court weighed this element in favour of the retroactive law, emphasising its positive effects for consumers; and
- the retroactive reduction of the incentives was not unforeseen or unforeseeable at the time of execution of the contracts, because there were a number of provisions of law that anticipated the possibility of a reduction of the incentives. Thus, in the opinion of the Court, a diligent operator should have foreseen such reduction.
Since 2017, owing to EU constraints, incentives for renewable energy plants have been awarded only through reverse auction systems, while in the past there were also forms of direct access to incentives, already pre-determined by law. Also, renewable energy dispatching has been prioritised in respect of other sources of energy. Owing to these incentives, Italy is already satisfying more than 17 per cent of its energy needs through renewable energy, reaching the goal established by the European Union for 2020.
Since 2004, energy efficiency has also been incentivised, through white certificates, also known as energy efficiency certificates (EECs). EECs are granted by the competent public authority upon proof of the achievement of energy savings through energy efficiency improvement projects. Electricity and natural gas distributors are required to achieve yearly quantitative energy savings targets, expressed in tonnes of oil equivalent saved. Each certificate is worth one tonne of oil equivalent saved.
Finally, Article 29 of the Italian Environmental Code provides that IPPC permits must include greenhouse gas emissions limits when necessary to prevent local pollution of the environment.