Siting Permits between Environmental Concerns and Voice Effects: Evidence from Italian Power Generation, 1999-2007

Abstract

This paper explores the political-administrative process which determines the release of siting permits in Italian power generation. The empirical analysis is an attempt to test whether the national and regional governments are efficient when they approve the location requests made by power producers, i.e. whether they are more likely to issue the siting permits if the new plant is located in a community which, other things being equal, is subject to a smaller environmental damage. Actually, in our analysis the proxies of community voice are estimated to have a larger explaining strength than the proxies of external costs. This fact casts some doubts on the efficiency and environmental equity of hybrid siting regulations. This result suggests that raising awareness and providing information to the candidate hosting communities may be an important means for improving environmental performance, in order to make efficient the signal represented by the local opposition, on which both investors and State/Regions mainly rely.

Keywords: authorization, voice, political-administrative process, energy facilities

JEL Classification: Q48, R53