The Swiss reject incentives for climate-friendly behavior

The long-planned path to climate neutrality in Switzerland has failed for the time being. A narrow majority is against the planned CO2 law. Nevertheless, companies now expect significant additional costs.

Balthasar Glaettli, parliamentary leader of the Greens in Switzerland, is frustrated.  The CO2 law called for by him fails in the referendum.

EA narrow majority of Swiss people reject tougher climate protection measures. According to projections, around 51 percent of citizens voted against the CO2 law on Sunday, which provided financial incentives for climate-friendly behavior and stricter regulations for vehicles and buildings. In doing so, Switzerland wanted to achieve the goal it had set itself as part of the Paris Climate Agreement of halving greenhouse gas emissions by 2030 compared to 1990 levels. That should no longer be possible.

It took several years for Parliament to agree on the package of measures presented. Years will pass again until a new start is possible. This also makes it less likely that Switzerland will achieve the desired climate neutrality by 2050.

Allegations of fear campaign

“This is a catastrophic day for climate protection,” said Social Democrat Gabriela Suter on Swiss television and blamed the “fear campaign” of the Swiss People’s Party (SVP) for the result. The national conservative SVP was the only party to drum up against the law, bringing the impending additional costs for the population to the fore. This was particularly noticeable in the countryside, where many people were eager to resist because of two environmental initiatives that were also put to the vote on Sunday.

One initiative called for a ban on pesticides; the other wanted to ensure that only those farmers who forego the use of pesticides and antibiotics and who only keep as many animals as they can feed with the fodder they have grown should continue to be subsidized. According to projections, the citizens rejected both templates by more than 60 percent.

The CO2 law provided for a flight ticket tax of 30 to 120 francs, linked to the length of the route. Half of the income would have been redistributed to the citizens. From the already existing incentive tax on fossil fuels, which should have been gradually increased to a maximum of 210 francs per ton or 50 cents per liter of heating oil, even two thirds should go back to the population and the companies. One third was earmarked for a fund that should have financed climate-friendly investments in buildings and technologies. Furthermore, if the law had been approved, all Swiss companies could have been exempted from the CO2 tax, provided they had committed to measures to reduce their energy consumption and thus their emissions.

Car lobby is the winner

This instrument, which was previously only available to a small number of companies, has had positive experiences: It triggered investments that ultimately paid off financially for most companies and at the same time helped the climate. But with the failure of the revision of the law, this instrument falls flat. Because the existing regulations for exemption from the CO2 tax are limited to the end of 2021. Energy-intensive companies in particular are now threatened with sensitive additional costs. The business associations now hope that the current regulations will be extended by parliament. Of course, it remains to be seen whether this can succeed.

The Swiss car and oil importers who fought together with the SVP against the CO2 law are the winners of the vote. The pressure to sell more vehicles with lower emissions from now on is gone. Gasoline and diesel sellers are spared having to offset a higher proportion of the CO2 emissions from their fuels.

This means that the surcharge of 12 cents per liter, with which the importers could have passed this additional expense on to the motorists, is off the table. Whether they would actually have used this leeway for higher fuel prices, however, was open. Already today they could add 5 cents, but in fact they are only asking 1.5 cents more. This is probably due to the strong competition in the petrol station business.