Advancing environmental fiscal reform in Italy

for the Ministry of Environment

The European Commission has lent support to the Italian government for the reform of harmful subsidies, environmental taxation and broader fiscal reform.

Context

The 2016 Italian Catalogue of environmentally friendly and harmful subsidies prepared by the Ministry of Environment estimates that tax expenditures represent more than 70% of the EUR 16.2 billion of environmentally harmful subsidies. This suggests strong synergies between tax reform and environment policy.

Support delivered

The Commission, in cooperation with the OECD, provided support over 12 months to:

• advance environmental fiscal reform in Italy through the identification of opportunities and barriers within an ecological transition perspective, and promote debate among national and European experts and policy-makers;
• adopt a policy agenda and action plan for the environmental fiscal reform, including removal of fossil fuel support, tax reform, and fiscal reform.

Results achieved

Support from the Commission delivered the following results:

• a series of workshops with national and international experts to relaunch the national discussion on environmental fiscal reform;
• a report on the identification of barriers and opportunities for the implementation of environmental fiscal reform in Italy, including the reform of environmentally harmful subsidies, environmental taxation and broader fiscal reform;
• an action plan with context-specific recommendations on how to implement environmental fiscal reform in Italy.