At “Ricerca Sul Sistema Energetico” (RSE), a core activity is supporting the Italian Government in shaping energy policies to promote and implement the decarbonization of the energy sector. This is achieved by developing energy scenarios based on national and European targets, as well as on market and technological trends, using the TIMES-RSE energy model. Since 2022, under the “Ricerca di Sistema” research program, RSE has initiated a new research activity aimed at developing a tool capable of analyzing interactions between the production system, socio-economic agents, and the energy sector.

This tool seeks to assess the macroeconomic impacts of energy scenarios, enhancing the understanding of decarbonization policies and their implications for the national economy. Therefore, this report presents the technical characteristics and the peculiarities of the novel macroeconomic General Equilibrium Model for Economy-Energy-Environment in Italy (GEM-E3-ITA), completed jointly by RSE and E3 Modelling in 2024 , which is soft-linked with the TIMES-RSE energy model.

The soft-link is performed on a rich GEM-E3-ITA platform, which combines detailed energy information and macroeconomic indicators with highly disaggregated Input-Output (IO) tables, Social Accounting Matrices (SAM) and Global Trade Analyses Project (GTAP) data. GEM-E3-ITA is a multi-sector and multi-regional global recursive dynamic system, where the energy sectors are supplied by the inputs from TIMES-RSE.

Moreover, the report illustrates the results of the macroeconomic impact assessment of the decarbonization scenario outlined in the final version of the Italian “Integrated National Energy and Climate Plan” (PNIEC), which was developed with RSE’s contribution and submitted by the Italian Government to the European Commission in the summer of 2024.

The results indicate that while the energy system evolution outlined in the NECP is effective in reducing Greenhouse Gas (GHG) emissions, decarbonization may cause potentially a temporary slowdown in economic activity, particularly in the short and medium terms. Moreover, the findings emphasize that the outcomes are heavily influenced by the broader economic context of the decarbonization process, including critical factors such as the costs associated with financing these efforts.

The Report is available on the Italian site