A0739
Title: Fiscal incentives in Italian residential sector: Long-term effectiveness and distributional effects
Authors: Alfonso Carfora - University of Macerata (Italy) [presenting]
Abstract: Fiscal incentives' effectiveness is examined for energy efficiency and renewable transition in Italy's residential sector through regional analysis. Using panel vector autoregressive (PVAR) models with panel-specific fixed effects on data from 20 Italian regions (2009-2021), the impact of dwelling renovation bonuses (VDR) and energy efficiency bonuses (VEE) on energy consumption patterns is investigated. Findings reveal fiscal incentives demonstrate gradual but significant energy consumption reduction, with effects materializing after several years and stabilizing around zero after 4-5 years. This suggests sustained long-term policy commitment is essential for meaningful efficiency improvements. While residential measures show promise for consumption reduction, their effectiveness in driving broader fossil-to-renewable transition is limited, indicating the need for comprehensive multi-sectoral approaches. Using non-hierarchical fuzzy clustering to explore regional heterogeneity, we reveal significant geographical disparities. Northern regions capture over 60\% of deductions, highlighting distributional concerns and the regressive nature of current structures that disproportionately benefit high-income homeowners. Results demonstrate that while fiscal incentives like Superbonus 110\% can drive efficiency improvements, design requires fundamental reform addressing equity concerns and enhancing effectiveness for vulnerable groups, including low-income households and tenants.
