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Article Switzerland: CO2 Act Amendment Rejected by Voters

(June 25, 2021) In a referendum held on June 13, 2021, Swiss voters rejected by a vote of 51.59% to 48.41% an amendment to the Federal Act on the Reduction of Greenhouse Gas Emissions (CO2 Act). Voter turnout was 59.68%. Voter turnout and rejection were particularly high in rural regions. The amendment to the CO2 Act contained several measures to further reduce CO2 output in Switzerland in order to reduce greenhouse gas (GHG) emissions by at least 50% by 2030 in line with the commitments made under the Paris Climate Agreement. Of particular importance among the measures were those incentivizing climate-friendly behavior and requiring anyone producing large amounts of CO2 to pay more money for the same services, such as through an air ticket levy on frequent flyers. 

Background on Climate Policy in Switzerland

The core domestic legal instrument to combat GHG emissions and climate change in Switzerland is the CO2 Act and its corresponding ordinance. The CO2 Act implements, among other things, the goals agreed upon under the United Nations Framework Convention on Climate Change (UNFCCC), the Kyoto Protocol, and the Doha Amendment. Switzerland ratified the Paris Agreement on October 6, 2017. The Paris Agreement’s goal is to limit the global average temperature increase above preindustrial levels to well below 2 degrees Celsius. In furtherance of that goal, Switzerland submitted its “nationally determined contribution” (NDC), in which it set a total GHG emissions reduction target of at least 50% by 2030 compared with 1990 levels. Switzerland’s long-term goal is to reduce its GHG emissions to net zero by 2050. The proposed amendment to the CO2 Act that was rejected by the people was intended to implement the GHG emission reduction target under the Paris Agreement.

Content of the CO2 Act Amendment

Among other things, the amendment would have raised the domestic GHG emission target to at least 50% by 2030 and to net zero by 2050 in line with the NDC under the Paris Agreement. The current target is a reduction of 20% by 2020 as compared with 1990 levels and an additional 1.5% by 2021. The CO2 levy adopted in 2008 on thermal fuels, such as heating oil and natural gas and coal, would have been raised to 210 Swiss francs (CHF) (about US$229) per metric ton from the current CHF 120 (about US$131). In addition, a new air ticket levy of CHF 30 (about US$33) for short and medium-haul flights and CHF 120 for long-haul flights would have been instituted. The amendment foresaw another new levy on private and business jets ranging from CHF 500 to CHF 3000 (about US$545–$3,272).

Furthermore, the amendment would have established a climate fund. Two-thirds of the revenue from the CO2 levy and half of the proposed air ticket levy would have been redistributed to the public, whereas one-third of the CO2 levy and the other half of the air ticket levy would have been transferred to the newly established climate fund. The money of the climate fund would have been used to invest in building charging stations for electric cars and buses and making energy-efficient renovations to buildings; to support innovative Swiss firms that develop climate-friendly technologies; and to build protection structures in alpine regions.

All companies would have been able to request an exemption from the CO2 levy and a refund. In return, they would have had to commit to investing in climate measures in their companies. Lastly, there would have been new rules for energy-efficient cars and more restrictive requirements for the energy efficiency of new buildings.

Recommendation from the Federal Council and Parliament

The Swiss Federal Council (government) and the Swiss parliament recommended approving the amendment to the CO2 Act because Switzerland as an alpine country is particularly affected by climate change: temperatures rise twice as much as the worldwide average. Not taking action would result in considerable damage and high costs. Measures according to the current version of the CO2 Act are not sufficient to reach the reduction targets. The CO2 Act amendment would strengthen climate protection, result in orders for small- and medium-sized enterprises (SMEs), create jobs, and be socially acceptable, in their opinion.

The Federal Council and parliament explained that the amendment builds on the current CO2 Act and combines financial incentives, such as a CO2 levy on thermal fuels and the proposed new air ticket levy, investment in climate protection measures, and technical progress. Innovative Swiss firms that develop climate-friendly technologies are supported, which would create jobs. SMEs would receive orders for the energy-efficient renovation of buildings. The less CO2 the public and companies produce, the less they would have to pay, or they would even get money back from the CO2 levy. Money would be invested in the building of charging stations for electric cars and buses, which would support electromobility. Lastly, they contended that the amendment would make Switzerland less dependent on the import of natural gas and oil from foreign oil companies and the money could be invested in Switzerland instead.

Arguments from the Referendum Committee

The committee that initiated the referendum against the CO2 Act amendment, on the other hand, argued that the amendment would be too expensive, useless, and unfair. In the opinion of the committee, a four-person household would have to pay up to 1,000 CHF (about US$1,091) more per year due to the rise in the CO2 levy and the new air ticket levy. Furthermore, the committee stated that the CO2 Act even currently has no effect on the climate because Switzerland emits only 0.1% of worldwide GHG. The Swiss people have reduced their CO2 output by 24% per capita in the last 10 years, making this amendment unnecessary and expensive. Lastly, the committee argued that the amendment would primarily affect low- and middle-income people, particularly in rural regions, and would therefore be unfair and penalize this part of society.

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