 Okay, good afternoon everyone. I'm delighted to welcome you to this webinar. I'm Brian Sloan, I'm the current chair of the Cambridge Social Legal Group and it's a great pleasure. We have Davida Luka from the Department of Land Economy here to talk to us today. Just before we start, I thought it'd be useful for those of you who aren't on our mailing list to have some details about or to subscribe to that and I'll put it in the chat. I've also given a link to our latest edit collection called Spaces of Care. Davida, I think it was David Howard who put you in the hot seat today so you can blame him for the invitation but I'm sure it's going to be an excellent webinar. Just as a matter of housekeeping, there is going to be significant opportunity to ask questions and David is going to respond to them after he finishes speaking. One way to ask a question is to use the Q&A box and to type your question. If however you would prefer to ask your question live, just indicate that to us and we'll try our best to unmute you but we don't need to worry about that until after the main presentation. So Davida, you're going to talk for about 35 minutes and I'm very much looking forward to hearing what you've got to say. So with that over to you on the topic, I've gone with the wind organized crime and the geography wind farms in Italy. Thank you very much. Thanks, prior. Thanks for the invite to the Cambridge Social Legal Group. Let me start sharing my presentation and welcome everyone again. Thanks for being here for tuning in. Today I'm presenting joint work with Alessio Romari, a PhD student from the University of Barcelona who is probably listening to us and he's also on the job market. So it's nightly to everyone looking for a new person. So let me start directly with jumping directly in the topic. And the topic of course is the transition towards the policies that can foster a transition towards renewable energy sources. And we know of course that renewables play a leading role in the transition towards more carbon neutral sources of energy and it plays a key role in achieving our carbon net or carbon neutral targets such as those set in the Paris Agreement. To the same policies such as public subsidies are becoming increasingly popular or have become popular in these last years, in the last perhaps 20 years if we want. To the point that the renewable energy subsidies today are a key component in budgets around the world. Just for your information here you can see some infographics borrowed from the Financial Times and you see that the subsidies for renewable energy are very spread across the world. Interestingly, among the top countries, according to the Financial Times, there is Germany, the US and Italy is in the third place. These subsidies are still overall smaller than the subsidies given to fossil fuels. So this provides us with food for thought but nevertheless have become an important component in the policy toolkit that governments around the world use. In the case of Italy, the subsidies, the uptake of subsidies was very important. Indeed, if we look at the generation from renewable energy sources in the last, let's say, 30 years, there was a, in a way there was, I'm telling you a story of success. I'm just showing you here, underlining the energy from wind and from solar and you see that since the start of the 2000s, which more or less coincides with the adoption of incentive schemes, there was a massive uptake in capacity. Just as a comparison, I'm also providing two graphs for hydroelectric. On the bottom right of the graph, hydroelectric was already the maximum capacity in the country. So that's why you don't see growing. But overall, what I want to stress here is that the use of subsidies was highly successful in the Italian case as in other cases in other countries. Yet, there is a sort of a growing dark spot in this story and this is what the presentation is going to be about. And I'm linking, of course, as you can understand from the title and from the abstract, to the link, the potential involvement of mafia groups, also of organized crime in the sector, in the renewable energy sector. Here, just to provide you some anecdotal evidence, I'm showing you some headlines from the Washington Post, from the FT, the telegraph, but the list is broader. And all these pieces of news connect to, in particular, some cases which were discovered in southern Italy, in the region of Sicily, an island that you probably know already. The evidence is not only journalistic, there is also reports, for example, by Europe, as well as by the Italian anti-mafia directories. So there is a growing evidence, although still not broadly, it's still anecdotal or case by case evidence of this potential involvement of mafia groups into renewable energy. To give you the last piece of anecdotal evidence here, these headlines was linked to the arrest of wind farm tycoons or a businessman who seemed to have links, very closely, to the current head of the Sicilian mafia, so Cosa Nostra, which you may remember from the Godfather, just to give you an idea. And when he was arrested, the police seized access for 1.3 billion euros. So we are talking about substantial economic involvement in the sector. So our research, the research that I'm conducting with Alessio is exactly trying to aim at understanding if there is a strong and systematic link between the presence of mafia or mafia groups at the municipal level, so at the local level. Municipalities in Italy are the lower tier of government, so if there is mafia presence at the local level, it correlates or causally is causally linked to the involvement in wind farm activities. And if so, this is the second question is in red, because it's a question that you will see, still work in progress, if there is a link, what are the mechanisms behind. Just to, before I move on into the analysis, let me say that you may think, well, okay, this is a case from Italy about what's the external validity, what's the relevance for other contexts. And here I want to stress that the organized crime is not only an Italian problem, especially nowadays. Here just for, as I thought I'm providing two headlines from both from the Guardian and about the organized crime in the UK. Here, of course, the headlines are about the broad definition of organized crime. So it doesn't only involve mafia type organized crime. So it's a any sort of a criminal gangs and groups. But the point I want to make is that criminal organizations are not only an issue that we need to be concerning in countries such as Italy, or some countries in the Balkans, but it's a broad phenomenon on nowadays spread all across Europe and in the UK. Just to give you some, the Crown prosecution service or in the UK estimates, I was reading the estimations and the estimates that the costs for the UK are in excess of 24 billion pounds a year. So we are talking about substantial and substantial issue. More specifically linked to the presentation today is the issue of mafia groups. So mafia organized crime, which is a specific type of organized crime, as criminologists will tell us. And the point here I want to raise is that the mafias today, and I will come back to this later, have become a global phenomenon. So they are not the small phenomenon or the small mobster that you can imagine looking at the Godfather or the kind of movies. So they were slowly linked to specific places using violence, etc. Today they are global phenomena frequently infiltrating into the clean quote unquote economy. And to the same, the UK is indeed to be very careful because the UK indeed is a global center for money laundering. So organized criminal groups frequently earn money illicitly but then they reinvest illicitly or they buy laundry into the legal economy. And just to give you an insight, this is a story from 2009. In 2009, there was an arrest of an Italian mobster and the rates which were conducted between Italy and the UK sees 227 properties, 680 bank accounts, 61 luxury cars, stables, horses, businesses in the world over 200 million pounds. So we are talking about something which is increasingly deeply rooted in the economic and social clothe of societies beyond the places where organized crime and developed in the first place such as places in Southern Italy or elsewhere in the world. In terms of literature, our paper tries to bridge two strands. In a way, both me and Alessio comes from a background in applied economics. So people more from the from the law side of the sciences will forgive us for why the literature is focused on these areas. But just to give you the idea, we are trying to bridge the literature on the economics of organized crime. And here there is a very broad and burgeoning amount of research showing how organized crime and mafia type organized crime is a is a is a inflicts a significant substantial cost to economies around the world and frequently to public policy. So this is a an important focus. And we try to connect this to the to the broader debate in public policy, but one could think about the debate in legislation or in regulation to get closer to a legalistic framework on whether on how to foster the transition towards renewable energies and towards a cleaner economy. So we try to bridge these two strands on which there has been relatively limited work. We just know of three pieces of work. So there are a few exceptions, but it's still it's a relatively untouched area where there is there is more more room for for for more research. Before I go into what we do empirically, let me spend one slide on the telling you a bit the background on how the incentive systems work in Italy, because this is then important to to understand the empirical case. And as I was anticipating, Italy has benefited from a substantial amount of public support was the towards the wind farms to the point that in the in the some years ago, Italy had the highest or perhaps close to the highest levels of support across the EU across European countries. As an example, the legislation changed over time. So I won't go into specific details, but I want to give you the broader picture. And as an example, so in the Italian legislation, the legislator foresaw some feeding tariffs guaranteed for years. So the tariffs were changed over time as I was anticipating, but we're very generous. So we are talking to about sums well above the market price for for energy. And so they were stronger incentives to to to join the sector. Other incentives were, for example, the priority access to the grid, because this is something that is covered working on this project. Sometimes there is an overproduction of electricity and the electricity just wasted. So the electricity that we produce is just wasted in the in the network. And so in this case, the energy produced from from wind farms have a preferential access to to the grid. Interestingly, the incentives were somehow favoring smaller plans or smaller wind farm, wind farms. So for example, if a farm is below 60 megawatts, they doesn't need to comply and to go into a sort of auction system where there is a the participants will try to compete for a limited amount of capacity. The graph that I'm showing you here is it's in Italian. So forgive me for this. It comes from the from the Italian institution that manages these incentives. But what I want you to to convey is the size of the horizontal bars and both for large scale farms. So the ones on the right, so the above 200 kilos or the small, the small ones. Sorry, the opposite, I mixed them. But in both case of the small, very small and large scale farms, the Italy ranks among the highest, highest support across the across the across the even that's a main takeaway of the graph. Of course, is the the project. Well, of course, if you know the geography of Italy, the productivity is over wind farms is concentrated in the south, where the the geography is windier, as you can see from from this map. Unfortunately, this is also the area where traditionally organized crime has been called mafia type organized crime has been strongest. And in fact, the anti mafia directorate of Italy, which might sounds strange for someone, but because of the long historical tradition of mafia groups or the rootedness of mafia groups, Italy has also developed a quite strong institutional capacity in fighting those mafia groups. And so we have an anti mafia directorate. And in one of the numerous reports, they were stressing, in fact, the attention that we need to care to pay to the wind farms and renewable energy sector more broadly, because this is one of the growing area where mafia's are trying to infiltrate. And the reasons are two. The first one is that the mafia groups try to scheme money from the incentives. So they try to exploit the public incentives given to the sector. And the second the second reason why mafia's are interested in the sector is for the money laundering, because establishing a wind farm requires upfront capital. And this is a perfect way for for for groups which have lots of cash and they don't know how to invest it. And that's a perfect opportunity for them to to to use their cash. In terms of data, the data that we use for the for the for the analysis, we exploit a punctual data set on the on the presence of wind farms existing in 2016. So we this is a official data from the from the GSC Atlas. And here you can see a map on the distribution of farms across Italy. And as I was saying, of course, more and most of them are in the south, which is windier, especially in the mountains of the south. If you are curious to see how many municipalities, as I was saying, the analysis will be done at the municipal level. Here you can see two scatter plots on the number of municipalities across Italy that have at least host at least one wind farm on the left and the number of plants per municipalities which are actually having at least a farm. Italy has composed more or less 8000 municipalities and if I don't mistake around 700 municipalities are involved in a wind farm. So have at least a wind farm in in their own territory. Now let's come to the key point of the presentation in a sense that the the data on wind farms is easier. But the key point is how do we measure mafia because it's it's inherently difficult to to measure the the phenomenon you may tell me. Well, this is a beautiful story. But unless you tell me how you are able to measure the mafia, the presence of mafia, which is a very definition is something difficult to find. The whole story is it's just up in the air. And let me start from the old, from the first papers and the developing the literature and they used to use indicators taken from the police or from the other criminal sources and were mostly about the violent events. So we're trying to measure mafia presence by the by measuring, for example, the number of crimes such as homicides or other crimes linked to the to mafia groups. And in a way, this links to the view of mafia as violent organizations that we may know from the movies. And that's why you see here a picture from from the godfather, by the way, when the when the character goes back to Sicily. And yet, organized crime groups are increasingly becoming something different. So they're from groups exclusively focused on a crude violence, they are becoming increasingly infiltrating into into the legal economy, as I was anticipating before. And so the literature has also tried to keep up with this with this change. And so new indicators have been added on the on the toolkit of MPR researchers. For example, scholars have used the number of confiscated properties. That is to say properties confiscated by the Italian state to mafia groups, because as I was saying, we have a relatively strong and developed anti mafia institutional structure to fight the groups. And equally, and other indicators which was used is the is the number of local authorities that is municipalities in Italian case, which were found to be infiltrated mafia groups and dissolve because of this reason. Over all, so we see that the mafias have a change in their in their character from a group set base on the exclusive base on the crude violence to groups more deeply infiltrating into into society. Overall, yet the underlying story with the mafia group size, the ultimate use of a virus either directly or as a threat. And here I'm referring to a paper by one of the criminologists here in Cambridge, Federico Campana and and Paolo Campana, sorry, and in Varese 2018. Overall, what we do in this paper use is a it's a it's a combined it's a combined approach. We so basically take all these indicators used by previously by the literature and combine an index developed by an Italian organization called trans crime. So the index ranges from zero to 10, where zero is a no mafia infiltration at all and 100, sorry, not 10. 100 is the maximum with the maximum infiltration. To give you an idea, this is the picture of an organized crime today in Italy. As I was saying before, the criminal groups which developed historically in the south today are also highly infiltrated in cities and in the north in the and so cities like such as Milan or Turin, the city where I'm from in the northwest, and other places which were the economies formally very clean and then there is no in theory, no criminal groups, but they influence on the economies is strong. And this is again one of the reasons why we need to worry also here in the UK, especially in London. So what do we do empirically? And please bear with me this slide is slightly more technical. So if you don't get if you don't know estimation strategies equation, there is absolutely no problems. It's it's it's important here is to understand the intuition. And since we have in a way, we have two phenomena here we need to understand, we need to understand whether local municipalities are involved in hosting at least a wind farm. So the first step and the second step, if yes, how many wind farms will be present in this local territory. So we use two step analysis. It's a cross section analysis because we only have data for 2019 on the wind farms. And these two strange equations are just telling that we have a two step where we first estimate the likelihood of a municipality to host a wind farm. And the second, the number of plants or megawatts installed. In the first case, we use a probit estimator in the second is your truncated Poisson case you are interested in in in these details. And of course, our variable of interest. So our explainator is is our mafia index. We additionally of course control for covariates as it's a standard in the in this kind of studies or first nature geography, levels of urbanization, in population density, income and employment, et cetera, et cetera. Let me come to the results. Again, don't get scared if you if you are not familiar with these tables. It's it's it's just a way statistical results are presented. The important thing is the takeaway and a positive coefficient. So a positive number with many stars with three aesthetics is what you want to have. So it's what you don't want to have if you are concerned but this is what tells you that the regression results are strongly and robust. And so across our specification, you see in particular those underlining red, they suggest us that there is a strong and robust link between the presence of mafia groups at the local level and the likelihood of hosting at least a wind farm in the municipality. And of course, we cannot provide evidence of the smoking gun, but because it's but we can provide evidence of a link between these two between the local presence of one phenomenon and the local presence of another phenomenon. If we go to the second stage, so we try to estimate the total number of the wind farms per municipality. Again, we see there is strong and robust correlation between the two. This is, of course, the results across the whole of Italy. Yet there is no evidence of a link between the total megawatts installed and mafias and perhaps this is still very preliminary, but an hypothesis because the the regulation that is more stringent for large wind farms. So an hypothesis we need to test in a in a more robust way is that the mafia groups may be interested in entering into into small farms. To give you an idea of what these coefficients are in a graphical way, this is the table. So you see the the the link between the mafia index and the likelihood of hosting wind farms. The results holds become stronger when we restrict the sample where we stick the analysis to the only the south of Italy where the the presence of mafia groups have been historically stronger and when I was saying the wind productive abilities is stronger. For resort time, perhaps I will go very quickly to over the next slides, but if there is any of you who is the interesting about the identification, the causal identification of the work, which is the final part of our analysis. We try to go deeper from the correlation analysis that I presented earlier and what we do is that we use an instrumental variable approach and basically we exploit to say exogenous data or data or variables on the exogenous birth of mafia groups and in in the 19th century to understand where mafia groups are today and hence find a way to reduce the potential endogenous link that we find in the in the first part of the analysis. So I will skip it, but I'm very happy to come back to this in the in the Q&A. We use data on the on the on the surfer mines from the 19th century to instrument as is that technically the presence of mafia today and hence link into the to the the presence of wind farms and what I want to show are the results and indeed again we find a very strong link and here we can start to confidently claim it's a causal link between the presence of mafia in the municipality and the involvement in wind farms and yet we don't find a link in the in the second stage on the number of wind farms hosted in initial municipality so this is again it's a it's a hypothesis and we need to test further but it's perhaps that the criminal groups may offer small distributed farms rather than large scale plants. So to conclude we find we test we try to explore the correlation between the presence of mafia groups across Italy and the number of wind farms and we do find preliminary evidence especially from Sicily and this correlation is also strong in other parts of the south especially in the other region of Acampania the region of Naples was to say even if I haven't presented the result. In terms of next step and this is something I haven't stressed before the analysis is very new so the in a way it's a sort of preview of new and new new new work we are still working on and we have still a lot to do on the on the identifications on the empirical part but especially we are now working on expanding the analysis to solar plants or to try to diversify our focus or to broaden it and especially we are going to start COVID allowing very soon a second part of analysis which will be qualitative on the mechanisms so on the more legalistic mechanisms behind this potential involvement of mafia groups into into the renewable energy sector. With these thank you very much and I look forward for your questions