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Analysis – Superbonus! Italian green growth gambit makes homes and pockets

View of a building in Rome
View of the scaffolding of a building, in Rome, December 6, 2021. REUTERS / Yara Nardi

December 9, 2021

By Gavin Jones and Giuseppe Fonte

ROME (Reuters) – When Briton Candida Arvanitakis decided to make her 18th-century Italian vacation home more energy-efficient, she was surprised to find it wouldn’t cost anything because Italy is spending roughly 150,000 euros bill.

Under a scheme introduced last July, the Italian government pays 110% of the cost of greening buildings, from insulation to solar panels to replace boilers. old and window accessories.

“It’s a real incentive for people to reduce emissions. I just wish it existed in the UK too,” said Arvanitakis.

The European Union estimates that three-quarters of the buildings in the bloc are energy inefficient. It said renovating them could cut carbon dioxide emissions by 5%, but less than 1% of the area’s construction is upgraded each year.

Not surprisingly, there is already a grand scheme of things in Italy’s “superbonus” scheme that is seen as a test of the kinds of policies that EU members may need to meet the bloc’s goal of cutting reduce greenhouse gas emissions this decade by 55% compared to 1990. levels.

On the plus side, Italy’s engineering board estimates it has boosted gross domestic product (GDP) by 0.7 percent this year and created 153,000 jobs – exactly the same growth story that some Economists argue that the green transition could bring decades.

On the other hand, skyrocketing demand has increased the cost of construction services, and Italy’s tax agency said last month it had discovered more than $1 billion worth of fraud involving superbonus and incentives. encourage other housing improvements.

Critics also object to the high cost to the state, the fact that some key beneficiaries are already well off and don’t really need government support – and subsidies that cover gas heating new combustion and thus continue to use fossil fuels.

‘I CANNOT MEET THE DEMAND’

Several other European countries, including France, the Netherlands, Hungary and Denmark also offer subsidies for green home improvements, although none are as generous as Italy.

This plan is expected to be completed by 2025 but will reduce in size and availability from the end of next year.

Significant impact on Rome’s already strained public finances. The Treasury estimates there will be a total of 33 billion euros ($37 billion) out by 2036 – after all subsidies and credits have worked through the tax system – or nearly 2% of GDP. annual.

According to Italian economic analysis and consulting firm Nomisma, the average cost of subsidized works carried out to date on the apartment complexes in which most Italians live is 557,000 euros.

Luca Passerini, who owns a construction company in Rome, said: “Work has more than doubled since the superbonus was introduced. “I have hired more workers but not enough. We won’t take on any new jobs until May.”

According to the Italian Institute for Research and Environmental Protection (ISPRA).

“This is clearly positive for both reducing emissions and improving the air quality of our cities,” said Michele Governatori at climate and energy management agency ECCO.

However, he said the grant was probably too generous and initial confusion over its scope and duration led to a rush of money. That has “stunned” the market, allowing builders to raise prices for sometimes dubious quality work.

Gonatori also criticized the fact that bonuses could apply to gas heating, saying that “subsidies like these would exclude any use of fossil fuels”.

Builders or Beginners?

One way for people to claim benefits is to deduct that benefit from their tax return over a 5-year period.

A more common method is to use a tax credit to pay the construction company. It deducts its tax amount or sells the credit to the bank, which is reimbursed by the state.

This measure has been failed by corruption.

Italy’s tax collection agency said last month it had discovered fraud worth 950 million euros linked to superbonus and other home improvement incentives.

The agency’s director, Ernesto Ruffini, said: “We’ve found invoices for work that don’t exist, invoices that are published by unqualified companies, even butchers who bill the company. building.

Italy ranks 52nd in Transparency International’s global corruption perception index and 21st out of 27 EU member states, ahead of Greece and 5 Eastern European countries.

Italy’s public finance watchdog, the Congressional Budget Office (UPB), said the goal of maximum emissions reductions at minimal cost had not been achieved by this plan.

UPB board member Alberto Zanardi said: “The stated target for energy efficiency risks creating undue benefits for construction companies.

For all its alleged flaws, the superbonus plan still stands out among Italy’s efforts to meet climate goals, which many experts say are still insufficient.

They say Italy, which relies heavily on imported oil and gas, is doing too little to develop alternative energy sources and has not followed the lead of countries like Germany and Spain in promote electric vehicles.

“We are lagging behind in our transition to renewable energy and we are not yet on track to meet our emissions commitments,” said the ECCO CEO.

(1 dollar = 0.8894 euros)

(1 dollar = 0.7559 pounds)

(Editing by David Clarke)

https://www.oann.com/analysis-superbonus-italys-green-growth-gambit-lines-homes-and-pockets/?utm_source=rss&utm_medium=rss&utm_campaign=analysis-superbonus-italys-green-growth-gambit-lines-homes-and-pockets Analysis – Superbonus! Italian green growth gambit makes homes and pockets

Bobby Allyn

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