Tax breaks harm climate, says Swiss study

Tax breaks harm the climate according to study Keystone-SDA

The abolition of all tax concessions with a climate impact can reduce Swiss carbon dioxide (CO2) emissions by 2.5 million tonnes per year, according to a study by the Swiss Federal Institute of Technology Lausanne (EPFL) and the University of Lausanne.

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This corresponds to almost 6% of national greenhouse gas emissions, the EPFL announced on Monday. This would generate tax revenue of CHF4.6 billion ($5.2 billion), of which the largest share, CHF2.9 billion, would benefit the federal government. The study examined tax concessions at federal, cantonal and municipal level.

International air traffic, which is exempt from mineral oil tax and VAT, benefits from a subsidy with a strong impact on the climate. Abolishing these tax concessions would reduce CO2 emissions by almost 1.5 million tonnes per year, the report continued. There is also the potential for over CHF1.3 billion in additional tax revenue.

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Tax concessions for company cars, free parking spaces and commuter deductions have a detrimental effect on the climate in commuter traffic. Tax concessions influence the behaviour of users, wrote the EPFL.

Abolishing the commuter deduction and tax breaks for company cars and parking spaces at the place of work would reduce CO2 emissions by over 600,000 tonnes and generate additional income tax revenue of over CHF2 billion.

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In the case of heavy goods vehicles, the external costs of the performance-related heavy vehicle charge are not compensated. Light commercial vehicles are completely exempt from it. If heavy goods traffic and light commercial vehicles had to cover their non-climate-related external costs in full, CO2 emissions would fall by over 200,000 tonnes and generate more than CHF1 billion, the study said.

Translated from German by DeepL/ts

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