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Italian Businesses Feeling the Green Policy Pinch


Thanks to high energy costs, Italy—like Germany, Spain, and Europe in general—is struggling to stay competitive in the global economy. Rome is propping up renewable energy with government subsidies that will total nearly a quarter of a trillion euros over the next two decades, and those costs are being passed along to consumers in the form of a green tax on their energy bills. As Reuters reports, this surcharge is especially harmful to smaller firms:

Of these taxes and surcharges, the burden falls disproportionately on small and medium-sized businesses because big heavy energy users get a slew of incentives. […]

Small and medium-sized companies…paid around 40 percent more for their power in the second half of last year than the European Union average, according to data from Eurostat. Energy costs for this category of company are higher only in Cyprus, Eurostat said.

Rising energy costs are not only making it devilishly difficult for these companies to compete with the rest of Europe, but also with the rest of the world—Europe’s energy prices are already considerably higher than America’s, for instance. Cheap shale gas has depressed American energy prices, while a stubborn commitment to subsidizing expensive green technologies has sent European costs spiraling ever upwards.

Italy, like the rest of the Europe, is still struggling to recover from the recent financial crisis. Hamstringing itself with higher energy costs for the sake of green idealism is not making that recovery any easier.

[Wind turbine image courtesy of Shutterstock]

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  • free_agent

    It seems to me that the error is not recognizing that greenness of energy supplies is a luxury enjoyed by the entire population, and so green energy should be subsidized through general tax revenues. Instead, greenness of energy supplies is treated as a regulatory requirement on electricity consumers, and so forces heavy energy consumers to other jurisdictions.

    • f1b0nacc1

      The greeness of energy supplies is a pointless extravagance imposed upon energy consumers (the entire population) by religious fanatics and their allies in the bureaucracy. There is no general benefit in any meaningful sense, but even if there was, wouldn’t it be better to encourage those who wanted such a benefit to pay for it?
      The regulatory burden is just that, a regulatory burden imposed not chosen…

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