Industry given tax incentive to clean up its act

The government is calling upon industry to clean up its act Keystone Archive

Swiss industry has until 2004 to implement measures to reduce greenhouse gases or face a carbon dioxide tax.

Under the Swiss CO2 law, companies have the choice of investing in cleaner technologies, or paying a so-called carbon tax, to help the country meet its target of reducing greenhouse gas emissions by 10 per cent compared with 1990 levels.

In the ideal scenario, says the Swiss Environment Agency, the tax would never be implemented.

“The idea of the law was to allow total freedom for a period of 4-5 years to let the economy take the necessary measures to reduce carbon dioxide emissions,” the agency’s boss, Philippe Roch, told swissinfo.

“The implementation of a tax is dependent on the results,” he added. “The industry has reacted very positively saying it wants to invest and will take measures”.

Cutting emissions

Switzerland’s target for reducing such gases goes further than the Kyoto Protocol, which commits signatory nations to cutting their emissions by eight percent compared with 1990 levels by 2012.

Beyond industry, the government is also committed to a series of reforms to its environmental, financial, economic and transport policies.

For their part, companies are seeking guarantees that they will not have to pay the tax if they fulfil their side of the bargain.

“That is why we had to develop…. a framework which enables industry to understand which measures are needed to qualify for carbon tax exemption,” said Roch.

“We are now negotiating to fix differentiated targets for the various sectors of the economy. In some areas a small investment can enormously reduce CO2 emissions, in other sectors it is very difficult.”

Fossil fuels

Switzerland’s CO2 law grew out of the 1993 climate change convention, which obliged countries in principle to reduce emissions, amid fears that, if fossil fuel use was not reduced, global temperatures could rise significantly.

The 1997 Kyoto Protocol set fixed targets for reductions, which Switzerland and several other nations agreed to meet. The notable exception was the United States – the world’s biggest polluter – which refused to implement the treaty.

A key recommendation of the climate change convention was that industrialised countries take measures at home to cut emissions and share these “clean” technologies with developing nations. Switzerland has made this a key objective of its environmental policy.

Ironically, the US may be one of the countries that decides to follow Switzerland’s lead. Philippe Roch told swissinfo that he was encouraged by talks last week with the American under-secretary of state for Global affairs.

“The Swiss CO2 law corresponds well with the American spirit of liberalism. In view of the high interest shown, I will probably return next year to present this in more detail to the US administration.”

by Devra Pitt