The objective of this report is to identify, through a literature review, the first elements of a methodology to estimate the spatial and landscape external costs of PV and onshore wind installations in Italy using the approach of monetary valuation of ecosystem services. The methodology will be completed (and applied) in the coming years to take into account spatial specificities and changes in land use and land cover of renewable generation facilities.

Given the undeniable emission reduction benefits of using renewable energy sources, the main motivation for the ecosystem external cost assessment activities planned over the three-year period is the need to intensify the implementation of these types of facilities by mitigating ecosystem and landscape externalities as much as possible.

This need is based on the unified environmental approach of the EU legislation enacted to implement the European Green Deal (Do No Significant Harm principle) and the national goals of net zero land consumption by 2030, biodiversity protection and landscape conservation, as reaffirmed by the Energy and Climate Plan and the Ecological Transition Plan.

The method chosen for the estimation of external ecosystem costs is the value transfer of reference values derived from case studies in the literature. Therefore, the literature review in this first year focused on the strand of empirical valuation of ecosystem services in Italy, which has found impetus and development (both in biophysical and monetary terms) mainly in the experimental work on natural capital accounting systems, both at European and national levels (reports on the state of natural capital in Italy).

The main results of the literature review are the “best values” per hectare identified for eleven ecosystem services (by ecosystem type and/or land cover class) and the correspondence tables between different land classification systems, which are important building blocks of a methodology for estimating ecosystem externalities of renewable generation facilities. The average monetary values identified for ecosystem services in Italy should be considered as preliminary results offered by the empirical literature, subject to specific assumptions and limitations, and susceptible to further change in the future as scientific research, in particular modeling and statistical bases, progresses.