Carbon tax fuels heated debate in parliament

Property owners challenge the planned tax swissinfo.ch

Parliament is due to consider a tax on carbon dioxide emissions in a bid to reach the targets set out in the Kyoto Protocol, aimed at reducing greenhouse gases.

But opponents in the House of Representatives want to the government to introduce a voluntary levy on fuel instead of a mandatory CO2 tax.

Switzerland has pledged to reduce emissions of six greenhouse gases by 2012 to below 1990 levels, as required of signatories to the Kyoto protocol, an amendment to the United Nations Convention on Climate Change.

The CO2 tax is deemed necessary by the government because voluntary measures aimed at reducing emissions are seen as unlikely to reach their target of a ten percent reduction (from 1990 levels) by 2010. The law governing these measures came into force six years ago.

The proposed CO2 tax, due to be debated in the House of Representatives in this week, would effectively push up the cost of heating oil and gas by nine centimes per litre.

Voluntary levy

But opponents in parliament, mainly from the rightwing and centre-right parties remain in favour of a voluntary levy, and they hope to win the Senate over at a later date.

Opponents of a mandatory tax – mainly property owners and small firms – want an alternative levy on fuel, agreed between government and industry, amounting to a two centime increase in the price of heating oil per litre.

The proposal resembles a levy on petrol and diesel which came into force – on a trial basis – last October.

Unlike the CO2 tax – the proceeds of which would be split between the public and business – revenues from the voluntary levy would be used for projects aimed reducing emissions, including insulation of buildings.

Not enough

Supporters of the CO2 tax argue that voluntary measures will not be enough for Switzerland to meet its obligations under Kyoto.

The Federal Energy Office has also warned that a voluntary levy would deny Switzerland access to the European emissions trading system, where countries can buy or sell the right to pollute.

The government says the CO2 tax would pave the way for an annual reduction of 0.7 tons in carbon dioxide and generate revenues of SFr650 million ($500.4 million) per year.

The money would be reimbursed via a reduction in health insurance premiums.

The Property Owners’ Association for its part claims that it is unfair to impose a tax on property owners and tenants that is higher than the current levy on petrol and diesel.

The Association, which is led by a Radical parliamentarian in the House, also complained that the refund system is incompatible with the tax system.

swissinfo, Christian Raaflaub

In brief

The Kyoto Protocol, an amendment to the UN Convention on Climate Change, was approved in 1997 and came into force in 2005.

The Swiss CO2 law formally took effect in 2000 and foresees additional measures if the targets can’t be met with voluntary means.

Last October the authorities agreed to introduce a levy on petrol and diesel on a trial basis, following opposition against a mandatory CO2 emission tax.

Property owners are challenging plans for the CO2 tax on heating oil, arguing instead for a voluntary levy.

Key facts

Switzerland has pledged a ten percent reduction in CO2 levels (compared with 1990) by 2010, the equivalent of four million tons of CO2.
The law requires heating oil consumption to fall 15%, and petrol and diesel by 8%.
CO2 is the worst of the six greenhouse gases mentioned in the Kyoto Protocol.
Switzerland has set no reduction targets for the five other gases.