The critical environmental and sustainability issues of Italy:
Italy has suffered three recessions in just a decade. Since the financial crisis, Italy has struggled to kick-start its growth, and is lagging behind its European neighbors. But the causes of the country’s malaise date back decades — and hope for change is meager. Throughout the last few decades, one recurrent trait is the country’s malfunctioning social institutions — in particular the lack of rule of law and political accountability — which hinder productivity, innovation and therefore growth. After the Second World War, Italy’s economic miracle was based on importing superior manufacturing technology from abroad, mostly from the United States. For such a model, which pushes for innovation and growth, Italy’s faulty institutions were not an obstacle to development.
Things started changing in the 1970s and 1980s, when Italy evolved into a fully formed industrial economy, and its industrial districts started developing. At this point, the country was nearing its technological and production frontiers, and needed solid social institutions to spur innovation and deliver competitiveness. This is what Italy really lacked.
An expansionary fiscal policy, financed through debt, kept growth up, but also hid underlying problems, like slowing growth and innovation. With the 1992 economic and currency crisis, the previous growth model was ultimately blown up. Italy’s growth was once again based solely on structural factors — namely productivity growth — and finally the decline of such growth. The other big crisis in 2008 landed a further blow to Italy’s economy.
GDP: $1,944 bn, per capita GDP: $34,260
- Organised Crime and Corruption
If there is one industry in Italy that has not suffered from the economic crisis, it is organised crime. It is a sector that booms year in, year out. With three significant mafia organisations – the ‘Ndrangheta, the Camorra and the Sicilian mafia – the country remains a hub of organised illicit activity, even if the nature of that activity is changing with the times. Long gone are the days when the scourge was confined to the south; mafiosi now operate throughout the country and beyond. The ‘Ndrangheta, for instance, has its roots in Calabria but dominates the European cocaine trade and the huge contracts being put out for tender at Milan’s Expo 2015 are under particular scrutiny for signs of mafia involvement.
Estimates of how much this shadow economy is worth vary wildly. Last year a government-funded report put the figure at €10.5bn, or 0.7% of GDP, while a study by Bocconi University in Milan claimed it was more like 10.9%. According to an estimate by the state auditor, corruption siphons off €60bn a year from Italy’s public coffers.
Major environmental issues currently facing Italy include air pollution from energy and heating, transportation and industrial sources, polluted inland waters, acid rain, and insufficient industrial waste treatment and disposal programs. The World Health Organization report found significant levels of air pollution (particle size 10 μm or less is PM10) in Italian cities ranged from 26.3 to 61.1 milligrams per cubic meter. The WHO guidelines establish the air quality standard at 20 micrograms per cubic meter. The European Environment Agency (EEA) has estimated that more than 66,000 people die prematurely due to particulate air pollution. Localized incidents of water pollution have also been reported with some regularity. In Veneto Region, groundwater, surface water and drinking water was contaminated with polyfluoroalkylated substances (PFAS) (compounds harmful to human health), from a local chemical plant. It exposed approximately 127,000 citizens from the region to the chemical.
- Judicial System and bureaucracy
Slow-moving, hugely bloated and sometimes alarmingly politicised, Italy’s justice system needs fixing. By an estimate, the inefficient judiciary system leads to wastage equivalent to 1% of GDP. The main problems in the Italian judiciary are the excessively lengthy trials and the influence of corruption and organised crime on political and economic life which have important repercussions for judicial activity. Article 104 of the Constitution guarantees the autonomy and independence of the judiciary. However, political influence, pervasive corruption and organised criminality pose great threats to that independence.
Italy’s infrastructure woes appear to worsen with each passing year, with the most recent tragedy – the well-documented Genoa bridge collapse– leading to the deaths of dozens of people. The country needs a drastic sector-wide rethink to prevent such a catastrophe from reoccurring.
Italy’s infrastructure woes find their roots in a construction boom that occurred in the 1960s. At the end of the Second World War, the incumbent government set forth on a new system of actions and schemes, which saw a flurry of bridges, buildings, roads and schools built. But the flurry was part of the problem. The economic and social success of land use and environmental resources gave impetus, in the post-war years, to a strategy of wild exploitation. This happened without any respect, neither for the ecological nor for the landscape resources.
According to Enrica Papa, an expert in transport and infrastructure, one of the government’s biggest mistakes was the transfer of various public infrastructure assets – particularly the most profitable ones – to large companies, or “entrepreneurial families”, in order to reduce costs. This has led to a substantial financial surplus in the pockets of the dealers but, paradoxically, scarce, sometimes very little, attention to the maintenance of the assets entrusted to them. The disaster of the Morandi Bridge was the epilogue of this announced tragedy.
Italy, with the 7th highest government spending, ranks only 27th in the WEF’s index for infrastructure, and has the fourth worst transport infrastructure among advanced economies.