Multisectoral tools for environmental targets: a sustainable economic change for Italy

Greenhouse gases in the atmosphere pose a risk to human life and ecosystems. The planet’s temperature is gradually increasing, causing changes in weather patterns, rising sea levels, and extreme weather events. In 2015, countries agreed on the 2030 Agenda for Sustainable Development, which includes 17 goals, one of which is climate action. As an EU member, Italy has committed to reducing GHG emissions by 55% compared to 1990 levels by 2030. To achieve this, policymakers must choose among viable policies subject to existing constraints. In the short term, regulation and fiscal policy may be the most feasible instruments, since they can be implemented through expedited institutional arrangements and decisions. This study uses a GHG Extended Multisectoral Model (GEMM) based on the Italian Social Accounting Matrix (SAM) that depicts the interdependence between the economic system and GHG emissions by modelling the production process, the circular flow of income, and the flows of these emissions. We apply the Macro Multiplier (MM) approach to the GEMM to identify the convenient structures of final demand (policy control) that are associated with the targeted level of GHG emissions for Italy, which is compatible with a positive change in GDP.