The Swiss government wants to implement a major energy shift and slash emissions of carbon dioxide (CO2) by at least 70% by the year 2050. While the goal is clear, the path is not. The tax package proposed by ministers is not finding consensus among the major parties.This content was published on August 6, 2015 - 11:00
In 2011, Switzerland was one of the first European countries to do a U-turn on energy policy following the nuclear accident at Fukushima.
Within the space of a few months, government and parliament had adopted an “Energy Strategy 2050”, which provides not only for the gradual shut-down of the country’s five atomic reactors but also a substantial reduction in energy consumption and CO2 emissions, development of renewable energies and revamping of the electricity grid.
Yet four years on, it is not apparent how or when this shift will be brought about.
In fact, opposition is being raised on all fronts to the constitutional change proposed by the government with a view to implementing the new energy strategy from 2021.
The government proposes moving from a system of promotion, based mainly on grants, to a system of incentives, based on taxes raised from energy consumption and then redistributed to households and businesses.
In other words, instead of supporting renewable energies financially, they will force up the price of other energies that have a negative impact on the environment. This will penalise energy guzzlers, while others will get a share of the tax revenue.
In the government’s view, this is the most efficient and economic approach to getting people and businesses to reduce consumption of energy – in particular, oil, gas and coal, which still fill 66% of energy needs in Switzerland.
The incentive approach means a paradigm shift in taxation policy: new taxes would be introduced not to fill the state coffers but to give an incentive to households and businesses to be more environmentally friendly in their behaviour.
Heavy burden on business
Already tried elsewhere in Europe – in Germany, Britain, the Netherlands and the Scandinavian countries – the incentive approach has many hurdles to overcome in Switzerland.
The major parties seem to have had nothing but criticism for the draft put out to consultation by the government until June, which proposes four kinds of tax on heating and transport fuels and electricity. The main opposition comes from the parties of the right and centre-right, who are also against giving up nuclear energy.
“We reject these new taxes on power, because they represent too heavy a burden on small and medium businesses and many households,” says Albert Rösti of the conservative right Swiss People’s Party.
“The government’s draft legislation would double the price of heating oil, for example. In the current economic situation, affected as we are by the difficulties caused by the rise of the franc against the euro, it seems to us far from opportune to burden our companies further.”
Much the same message is coming from the centre-right Radical Party. “We are against the introduction of an overall tax on power,” says party spokesman Christian Wasserfallen. “Artificially inflating the price of petrol and diesel can only have negative effects.”
While the People’s Party rejects the new energy strategy outright, the Radicals would bring in an incentive scheme based on a tax on fuels alone.
Too many questions open
The centrist and left parties are sceptical too, although they basically support Energy Strategy 2050.
“The government intends to anchor an incentive approach in the federal constitution, without determining how it is going to be put into practice. But to get this kind of system, we do not need a new article in the constitution,” said Martin Bäumle, president of the centrist Liberal Green Party.
“It would be enough to strengthen the existing mechanisms through new pieces of legislation.”
This view is shared by Roger Nordmann from the leftwing Social Democratic Party. “In principle it is a good proposal. However, the government wants to drop the current mechanisms for promotion of renewable energies without proposing any binding measures in terms of encouraging [their use]. These measures should be determined before any vote on an article in the constitution, so the people can know what exactly they are being asked to vote on.”
The leftwing Green Party is also asking for more clarity before it gives its support to an incentive approach.
“There are still too many questions open,” explains Green spokesman Bastien Girod. “For example, it is not clear how and to what extent this scheme will help to develop renewable energies. If they drop the current mechanisms for promotion without providing any new stimulus, there is a risk that Switzerland will end up having to buy renewable energy abroad.”
Disagreement on costs
Among the unknowns to clear up is also the overall cost of the energy shift. Too high, say opponents of Energy Strategy 2050.
“Based on a study by the University of Basel, CHF100 billion ($104 billion) will be needed by 2050. This figure seems realistic in view of the measures so far approved in parliament. For us, this is an unthinkable burden for the economy and the state’s resources,” says Albert Rösti from the People’s Party.
These views are pooh-poohed by supporters of the new energy strategy. “Those are silly figures for they do not take into account the fact that we will have to close the old atomic power plants and refurbish the electricity grid anyway,” says Girod. “We need to be asking instead how much it would cost to walk away from this energy shift, when we think of the risk of a nuclear accident, say, or energy dependence on other countries.”
“We believe the energy shift won’t cost a thing,” says Bäumle. “Quite to the contrary – investment in renewable energies will spur economic growth and allow us to cut down bit by bit on imports of fossil energies, which amount to billions a year. But this is possible only if, in the coming years, we give up costly grants and introduce an incentive approach.”
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