Climate change is an important topic in Switzerland as temperature rises are twice that of the global average.
Following the Paris Agreement on Climate Change, Switzerland had undertaken to halve its greenhouse gas emissions by 2030 compared with 1990 levels. In August 2019, the Federal Council decided to set an even more ambitious target: To reduce Switzerland’s net carbon emissions to zero by 2050.
The energy sector in Switzerland has historically been low carbon, with nuclear power ensuring the base load electricity complimented with hydroelectric power. The excess power produced at night is used to pump water back up the mountain so that it can produce electricity during the daytime when demand is greatest. In this way the hydroelectric installations act as energy storage.
In May 2017, the Swiss voters decided to gradually phase out the five nuclear plants and to replace them with renewable energy sources. Replacing nuclear with renewables will not significantly reduce the carbon footprint of Switzerland.
The main sources of carbon in Switzerland are road transport (25%) and air transport (19%). To reduce the carbon emitted by these two sectors, a carbon tax has been advocated. However, on 13 June 2021 voters narrowly rejected the introduction of a carbon tax in a referendum. Unfortunately, the extreme weather events causing flooding in Europe and forest fires in North America and Europe occurred shortly after the vote. It is likely that the vote would have passed if these events had occurred before the vote and were in the voters’ minds.
The challenge will be to reduce carbon emissions from road and air transport without a carbon tax in the short run. One way this can be done is through companies setting their own carbon reduction targets and reducing their use of road and air transport. In particular, the COVID-19 crisis has shown the possibility of carrying out business with much less travel. When travel is essential, increased use of the train can reduce the carbon footprint of the passenger or goods transported.
In a longer timeframe, a carbon tax can still be introduced once voters understand better the importance of rapidly reducing carbon emissions. It may be that other countries will have introduced their own carbon taxes and shown that they work. In the fight against climate change, carbon taxes are a vital tool to reduce carbon emissions.*The views expressed are the author’s and not ICAEW’s.