Are Wind Turbines a Mafia Windfall? The Unintended Consequences of Green Incentives

31 Pages Posted: 23 Feb 2021

See all articles by Claudio Deiana

Claudio Deiana

University of Cagliari - Department of Economics; University of Essex - Department of Economics; Universita di Cagliari - Centre for North South Economic Research (CRENOS)

Andrea Geraci

European Commission, Joint Research Centre (JRC)

Date Written: February 1, 2021

Abstract

Over the past decades, national and supranational governments have amply incentivized wind farm power production. In this paper, we reconstruct investments in the wind sector over twenty years of national support schemes in Italy, and we uncover unintended consequences of wind incentives exploited by criminal organization groups. We show that Italian mafia-exposed municipalities register a larger take-up of incentives for wind energy production, measured with the number of wind farms. The differential effect appears when the national energy services authority started withdrawing the excess supply of tradeable Green Certificates. With the end of the national intervention in the market, when the system of incentives became more competitive, installed power capacity sharply decreased. Further, we do not observe any differential in the take-up of mafia-exposed municipalities based on local physical constraints related to the wind potential nor spillover effects in neighboring municipalities. Our analysis highlights the risks of criminal infiltration in the green energy sector, especially when incentive schemes are insufficiently competitive and overly generous.

Keywords: Mafia, Government subsidies, Wind, Renewable energy

JEL Classification: D73, O13

Suggested Citation

Deiana, Claudio and Geraci, Andrea, Are Wind Turbines a Mafia Windfall? The Unintended Consequences of Green Incentives (February 1, 2021). Available at SSRN: https://ssrn.com/abstract=3775138 or http://dx.doi.org/10.2139/ssrn.3775138

Claudio Deiana (Contact Author)

University of Cagliari - Department of Economics ( email )

Cagliari, 09124
Italy

University of Essex - Department of Economics ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

Universita di Cagliari - Centre for North South Economic Research (CRENOS) ( email )

V. S. Ignazio 78
Cagliari, 09124
ITALY

Andrea Geraci

European Commission, Joint Research Centre (JRC) ( email )

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