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Tax on CO2 emissions moves step closer

Four proposals to reduce emissions will now be studied Keystone

Government plans to reduce harmful carbon dioxide emissions are being sent out for nationwide consultation.

This content was published on October 20, 2004 - 16:14

The cabinet has come under pressure to introduce some kind of tax on CO2 emissions because Switzerland is failing to meet global and national targets.

The government announced on Wednesday that it was sending out four different proposals for nationwide consultation until January 20.

It comes after authorities admitted they would not meet the targets set by Switzerland’s CO2 law that came into force in May 2000.

The legislation aims to reduce levels by 2010 to ten per cent below what they were in 1990.

The Federal Energy Office warned earlier this week that some kind of tax was inevitable if Switzerland were to meet its targets.

The proposals, which were first announced in June, are accompanied by a report detailing their effects on climate, the economy and finances.

One of them will be selected for discussion in parliament, based on the results of the consultation, policies practised elsewhere in Europe and the state of the Swiss economy.

Fuel tax

The first option, supported by the transport and energy minister, Moritz Leuenberger, would mean a tax of nine centimes on each litre of heating oil from 2006 and 15 centimes on petrol or diesel from 2006, rising to 30 centimes from 2008.

Revenue estimated at SFr2.4 billion ($2 billion) per year would be redistributed, with SFr1.4 billion going back to the Swiss people in health insurance (SFr192 per person) and SFr900,000 to companies to ease their social insurance bills.

The government says everyone who saves energy would benefit, particularly families on low or average wages.

Ministers believe the increase in fuel prices would also encourage less consumption.

According to the government, this proposal would also lead to a 0.1 per cent increase in Gross Domestic Product, the creation of 6,000 jobs, savings of SFr200 million in health costs and a reduction in crop losses of SFr60-140 million

But this option would mean a loss of revenue of about SFr450 million for the federal coffers.

Emission credits

A second proposal uses the same kind of thinking as the first but limits the tax on motor fuel to 15 centimes and allots two per cent of the revenue to buying emission credits abroad.

These would give the right to offset CO2 emissions in Switzerland against credits obtained in another country.

A third plan would only see a tax on heating fuel. But there would also be a “climate” levy of one centime per litre on imports of motor fuel.

Revenue from this, estimated at SFr70 million, would go towards the promotion of saving energy and for buying emission credits abroad.

The fourth option foresees no tax but a 1.6 centime “climate” levy that would bring in SFr115 million.

To achieve its energy goals, Switzerland has pledged to reduce heating fuel emissions by 15 per cent and motor fuel emissions by eight per cent.

Current legislation echoes Switzerland’s commitment to the Kyoto Protocol, which calls for a reduction of greenhouse gas emissions to pre-1990 levels.

swissinfo with agencies

Key facts

The introduction of a tax would help Switzerland achieve its goals on reducing pollution from carbon dioxide.
The Kyoto Protocol called on developed countries to reduce greenhouse-gas emissions by 10% from 1990 levels by 2012.
Swiss law requires a 10% reduction by 2010.

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In brief

The government has sent out four plans to reduce CO2 emissions for nationwide consultation.

Supported by the transport and energy minister, Moritz Leuenberger, the first option would introduce a tax of nine centimes on each litre of heating oil from 2006 and 15 centimes per litre of motor fuel from 2006, rising to 30 centimes from 2008.

The consultation period ends on January 20.

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