NDC update: In December 2020, Switzerland submitted an updated NDC. Our analysis of its new NDC is here.
Switzerland has not formulated a specific COVID-19 recovery plan to date, rather implementing individual actions that lack a green focus. Switzerland’s overall 2030 target of a 50% reduction below 1990 levels has not changed, but the government recently committed to reach ¾ of that target with domestic reductions, an increase from the previous 60% share. A recent carbon credit agreement struck with Peru will help Switzerland meet the non-domestic component of its NDC, but this deal pre-empts an international agreement on the rules governing such agreements. The CAT continues to rate the NDC as “Insufficient”.
We expect greenhouse gas (GHG) emissions in Switzerland will be between 8-12% lower in 2020 than 2019 levels as a result of the economic downturn caused by the COVID-19 crisis. Restricted travel mobility due to the COVID-19-induced lockdown and economic recession is expected to lead to a substantial reduction in transport emissions, while reduced consumer spending and business investment is also expected to contribute to lower overall emissions.
In response to the COVID-19 crisis, the Federal Council approved spending packages totalling CHF 60 billion (USD 66 billion), primarily targeting job preservation, especially in the service sectors, and preventing corporate bankruptcies. It put special provisions in place to protect the development of renewable energy projects during the crisis, shortening waiting times for solar PV subsidies. The aviation industry has received bank guarantees of almost CHF 2 billion with environmental requirements, but these are non-binding, with the Federal Council failing to pass other, more stringent and binding regulations.
Switzerland is in the final stages of a significant revision of its CO2 Act, its key piece of climate change legislation. The current draft, approved by both the lower and upper houses of parliament, and the final version of which will be put to a public referendum in 2021, is stronger than the version the National Council failed to adopt in December 2018. The main purpose of this revision was for Switzerland to achieve its “Insufficient” 2030 Paris Agreement target of a 50% emissions reduction from 1990 levels. A key element of the revised act is a ratcheting up of the required domestic emission reductions to 37.5% below 1990 levels, up from the previous 30%. While adopting the CO2 Act amendment and the policies included within it would result in Switzerland being projected to meet its 2030 emissions reduction goal, reducing domestic emissions by only 37.5% remains well below the level of action needed for Swiss emissions to be on a Paris Agreement compatible 1.5°C pathway.
One of the major instruments to reduce emissions is the carbon levy on fossil fuels whose level can be adapted to accelerate emissions reductions. At CHF 96 (USD 106) per tonne of CO2 it is already among the highest prices on carbon in the world. The recent CO2 Act amendment allows Switzerland to further increase the levy - to the maximum level of CHF 210 (USD 231) should the nation not be on the trajectory compatible with meeting its emissions reduction goal.
In October 2020 Switzerland and Peru signed a carbon credit agreement where Switzerland will finance emission reduction projects that are designed to contribute to sustainable development in Peru while the emissions reductions would count towards the Swiss NDC. In order to ensure environmental integrity, both Peru and Switzerland would have to apply robust accounting systems so that the reductions are only counted once. The rules and oversight provisions for such transfers have not yet been agreed under Article 6 of the the Paris Agreement.
In August 2019 the Swiss Bundesrat also adopted a goal of GHG emissions neutrality by 2050. This goal is to be engrained in the Climate Strategy 2050 that should be finalised and submitted to the UNFCCC by the end of 2020.
Switzerland’s currently implemented policies are projected to result in an emissions reductions of between 26-31% below 1990 levels in 2030, meaning Switzerland would possibly fail to achieve the domestic component of its NDC pledge which currently stands at 30%. The recently-amended CO2 Act - which must still be approved in a referendum in 2021 - includes a higher domestic reduction component resulting in an emissions reduction of 37.5%, which will require all measures within the amended act to be implemented to ensure it is achieved.
The Energy Strategy 2050, adopted by referendum in May 2017, contains a package of measures aimed at increasing energy efficiency, reducing CO2 emissions, and steadily replacing nuclear energy by renewables. Many of these measures were included in the reform of the Energy Law that went into effect in January 2018.
Much more action is particularly needed in the transportation sector, responsible for almost a third of Switzerland’s total emissions. Despite an increase in transport emissions since 1990, policies are still lacking. The penalty for importing cars with emissions higher than those prescribed in 2012 was significantly reduced in 2017, while the Roadmap for Electric Mobility 2050, adopted in late 2018, establishes an unambitious goal of increasing the share of electric vehicles in total vehicle sales to 15% by 2022; implying a slower rate of increase than current trends. In 2019 around 5.6% of all vehicles sold in Switzerland were EVs, increasing to 9.8% in the first half of 2020 - considerably higher than in the European Union (7% in H1 2020). Despite this level of uptake, the EV share of total sales in H1 2020 remains significantly below that of some countries with a comparable level of income (e.g. 26% in Sweden, 15% in Finland, 69% in Norway).
In September 2019, the process of adopting an amended version of the CO2 Act began, and in 2020, the amended version passed both houses of parliament, and will require approval via a public referendum in 2021. The amended law includes a number of measures that may accelerate emissions reduction, including increasing the CO2-levy if emissions reduction goals are not met, an application of the levy to air travel, and increased funding for energy efficiency measures in the building sector.
Another positive development was the announcement in August 2019 of the goal of the emissions neutrality by 2050 by the Swiss government. The goal is to be further specified in the Climate Strategy 2050 that is to be adopted by the end of 2020. As this goal is not legally binding at the time of writing, the graph continues to show the 2050 target included in Switzerland’s NDC of 70%–85% below 1990 levels by 2050.