CDM-JI potential and energy efficiency: an application to Italy

Panel: Panel 5. Market-based instruments

Authors:
Enzo Di Giulio, Eni Corporate University
Stefania Migliavacca, Eni Corporate University
Alessandro Vaglio, University of Bergamo

Abstract

CDM and JI are going to play a key role in the attainment of the Kyoto target by many countries. Some studies evaluate the market for the only CDM around 25-85 billion US$, for the first commitment period. It is not clear how much of the huge amount of CO2 reduction via CDM and JI will translate in simple fuel mix changes or carbon sink projects, instead of energy efficiency improvements. Since CDM and JI are a form of FDI (Foreign Direct Investment), the aim of the paper is two-fold:

study whether the current trend of international FDI is coherent with a target of energy efficiency improvement;
analyze the Italian CDM and JI opportunities in the context of its FDI structure.

With reference to 1, a first piece of information that is considered by the study is the history of a country FDI. This element gives information about the country’s financial and economic strength, and is the basis for deriving to what extent the current FDI trend should be changed, in order to attain an energy efficiency improvement target. Given this element, the research evaluates which shifts in the distribution of FDI, among different areas and countries, should occur so that it fully exploits the energy efficiency improvement opportunities. As far as 2 is concerned, its aim is to study the history of Italy’s FDI, evaluate its coherence with an energy efficiency improvement target, describe and comment the new Government guidelines for the reduction of GHGs emissions.