Financing the ecological transition and controlling public finances under pressure: an impossible equation? The case of Italy

The ecological transition requires massive investment s in decarbonising the economy. It seems rather impossible to meet climate targets without these investments. We estimate that in Italy, the need for additional gross investment in the ecological transition is between €63bn and €92bn per year over the 2020-2030 period , or 3.8 % to 5.5% of GDP. How the effort is shared between public and private players is a key question . Italy’s fiscal challenges will be exacerbated by the need to finance the additional requirements of the ecological transition. In this report, we explore three options for financ ing the need for additional investment s : use of public debt, higher taxation o n the wealthiest households , and recourse to joint debt at European Union level.