Current Policy Projections
With currently implemented policies (based on the “with existing measures” scenario of the 3rd Biennial Report), Switzerland is expected to reach an emissions level of 47 MtCO2e by 2020 and 41 MtCO2e by 2030 (excluding LULUCF), equivalent to 17% and 21% below 1990 levels (excluding LULUCF).
With its current plans, Switzerland falls short of meeting its 2030 target of a 30% national reduction below 1990 levels suggested by the Federal Council, let alone the overall 50% reduction below 1990 levels by 2030 set out in its NDC, which includes the intention to partly use carbon credits from international mechanisms. The failure to adopt the third iteration of its CO2-Law, which was due to come into force in 2021 and would result in additional 4.9 MtCO2eq emissions reduction,makes even the projected emissions reduction of 35% below 1990 by 2030 questionable (Bundesamt für Umwelt, 2018a).
The increased emissions projections compared to our last assessment stem from updated Swiss emissions projections submitted to the UNFCCC (Swiss Confederation, 2018). In particular, we reconsidered its transport demand, and the projected use of biofuels and reduced share of electric vehicles. While considered a frontrunner for its investment and recognition of the opportunities from modal shift to trains, Switzerland will have to do more to achieve the phase-out of fossil fuel cars by 2035 that we have identified as one of the key short-term steps to limit warming to 1.5°C (Kuramochi et al., 2018).
The most relevant cross-sectoral climate policy is the CO2 Act adopted in 2012. The law includes a carbon levy charged on fossil fuels, depending on their emissions intensity. The majority of the proceeds from the levy was to be reimbursed to the citizens, up to CHF 300 million (USD 298 million) annually were to be spent on emissions reduction in the building sector and a further CHF 25 million (USD 25 million) on the Technology Fund (Der Bundesrat, 2012a).
Due to a slower than expected decrease in emissions, the fee was increased in 2018 from CHF 84 ($83) to CHF 96 (USD 95) per tonne of CO2 (Bundesamt für Umwelt, 2017). In December 2018, the Swiss Parliament discussed modifications to the CO2 Act that would reflect the adoption of the Paris Agreement and help Switzerland to implement its 50%-emissions-reduction by 2030 goal adopted in its NDC. However, after lengthy negotiations, the Parliament rejected any modifications to the CO2 Act (Das Schweizer Parlament, 2018).
Another cross-sectoral instrument influencing greenhouse gas emissions is the emissions trading scheme. After two years of negotiations, in March 2019 the Swiss Parliament adopted a law linking the Swiss emissions trading scheme with the European EU ETS from 1 January 2020. While both systems will continue to function separately, the emissions certificates can be interchangeably used between the two systems (Bundesamt für Umwelt, 2019b).
In 2017 over 97% of electricity in Switzerland was generated from renewable (mostly hydro) or nuclear sources of energy, resulting in the Swiss electricity sector having a low -carbon intensity (VSE, 2019).
A May 2017 referendum adopted the Energy Strategy 2050, a package of measures aiming at increasing energy efficiency, reduction of CO2 emissions, and steadily replacing nuclear energy by renewables (Bundesamt für Energie, 2018a). Many of these measures were included in the reform of the Energy Law that went into effect inJanuary 2018.
According to the law, nuclear energy is set to be steadily replaced by renewables. By 2035 electricity generation from hydro power plants should increase only modestly to 37.4 TWh from 36.7 TWh in 2017. Electricity generation from non-hydro renewables should increase fourfold in the same period – from around 3.3 TWh to 11.400 TWh. The Law also sets the goal of decreasing energy consumption by 43% and electricity consumption by 13% below 2000 levels by 2035. It also introduces some changes to the feed-in tariffs including shortening the period during which installations receive the tariffs from 20 to 15 years (Die Bundesversammlung der Schweizerischen Eidgenossenschaf, 2018; VSE, 2019).
Similar to the EU, Switzerland also uses an emissions trading scheme (ETS) to lower emissions from large energy intensive entities. However, the Swiss ETS is much smaller than the European ETS, not only because of the smaller market but also due to the fact that the emissions generated by 54 companies in the power, cement, pharmaceutical, refinery, paper, district heating, and steel sectors covered by the scheme represent only 10% of the overall emissions. Its cap - set at 5.63 MtCO2 for 2013 - is reduced by 1.74% a year to reach 4.91 MtCO2 in 2020 (13% reduction on 2013 levels) (Mission of Switzerland to the European Union, 2017). The price of allowances went in the opposite direction than in the EU ETS, with which the system will soon be linked – from CHF 40 (USD 40) in 2014 to CHF 8 (USD 8) in 2018 (Bundesamt für Umwelt, 2018b).
An examination by the Swiss Federal Audit Office came to the conclusion that, in its current form, the Swiss ETS “generates hardly any incentives for reductions“ (Swiss Federal Audit Office, 2017). The audit office found several regulatory shortcomings, calling the impact of the ETS into question. A high number of emissions allowances allocated free of charge decreased the willingness of companies to invest in energy efficiency.
An annual decrease of the cap by 1.74%, which was below the overall emissions reduction, has led to an oversupply of allowances and consequently low prices. Without any reforms, the audit office found the oversupply of allowances would reach 4.5 million certificates in 2020, equivalent to 95% of the overall cap in 2013 (Swiss Federal Audit Office, 2017). The small size of the market further worsens the oversupply of allowances in case of an unexpected production stoppage or increase, and the resulting sudden changes in demand or supply of allowances.
To deal with the allowances’ price volatility, in 2011 the European Commission and Swiss government opened negotiations on linking both carbon markets. In August 2017, the European Commission tabled a proposal to finalise the agreement with Switzerland. In March 2019 Swiss Parliament adopted a law linking the Swiss emissions trading scheme with the European EU ETS on 1 January 2020 (Bundesamt für Umwelt, 2019b). Integration of both markets will allow companies to trade emissions on a bigger market.
Emissions from the transport sector are responsible for almost 32% of all Switzerland’s emissions. Contrary to the overall trend of decreasing emissions, emissions from this sector in 2017 were 0.9% higher than in 1990. However, the emissions seems to have peaked in 2008 (+13% above 1990 levels) and continued decreasing ever since (Bundesamt für Umwelt, 2019a). However, more action is needed to reach the goal adopted in the 2012 CO2-Regulation of reducing transport emissions by 10% below 1990 levels by 2020 (Der Bundesrat, 2012a).
In 2012 Switzerland adopted a regulation that included the goals of reducing emissions for newly-registered passenger cars to 130 gCO2/km. Starting in 2020, the emissions of new cars shouldn’t exceed 95 gCO2/km. The emissions reduction goal for utility vehicles was 147 gCO2/km in 2020 onwards.
Car importers exceeding those limits are required to pay a penalty for each gCO2/km they exceed (Der Bundesrat, 2012b). In both 2016 and 2017, the goal of 130 gCO2/km was exceeded: the average emissions of newly-registered vehicles in Switzerland was 133.6 gCO2/km in 2016 and 134.1 gCO2/km in 2017 (Bundesamt für Energie, 2018b). This was significantly above the average carbon intensity of newly registered passenger vehicles in the EU at 118.5 gCO2/km (ACEA, 2018a). At the same time, the penalty for the exceedance was decreased for the fourth and each following gCO2/km of exceedance from CHF 142.50 to 104.50 (Bundesamt für Energie, 2018b). This will reduce the costs of purchasing inefficient and carbon-intensive vehicles.
In 2018 around 3.2% of all vehicles sold in Switzerland were electrically chargeable vehicles. This included battery-only (1.7%) and plug-in hybrid (1.5%) vehicles. In the first quarter of 2019 their share increased to 5.3%, but with a significant increase in the share of battery-only (4.2%) and a decrease in plug-in hybrid vehicles. While the uptake of electric vehicles accelerates, their share is significantly below that of some countries with a comparable level of income that makes electric cars more affordable (e.g. 13% in Sweden, 10% in the Netherlands, 61% in Norway). (ACEA, 2019b, 2019a).
In December 2018 the Swiss government, responding to consultations with stakeholders from the auto and electricity industries, buildings sector, and local authorities, adopted the new Roadmap Electric Mobility 2050. It includes a goal of increasing the share of electric vehicles in new vehicles to 15% by 2022. Separate teams are to still develop practical strategies towards achieving this goal (Bundesamt für Energie & Bundesamt für Strassen., 2018).
Such a goal is unambitious as it barely goes beyond the continuation of the increase observed between Q1 2018 (3.1% of all registered cars electrically chargeable) and Q1 2019 (5.3% of all registered cars electrically chargeable) (ACEA, 2019b, 2019a). The rate of increase in the share of electric vehicles needed to achieve a 15% share by 2022 is only just above 2% annually, far slower than what’s needed to phase-out the sale of combustion cars altogether by 2035, a goal considered compatible with the Paris Agreement (Kuramochi et al., 2018). Also, instead of any actual mechanism to decrease the role of combustion vehicles, the Roadmap instead suggests a public relations approach of “awakening of positive emotions” With 543 vehicles per 1000 inhabitants in 2016, it is around 6.3% higher than in the EU (ACEA, 2018b).
The share of freight transported by rail in Switzerland in 2017 was, at 37%, much higher than in the EU (19%). However, it was significantly below the share of freight transported by rail in this country in the 1980s (around 53%). This decreasing trend was especially clearly noticeable in 2017 when the amount of products (in billions of tonne-kilometres) transported by rail decreased by 7% while the amount of products transported by road increased by 1.5% (Bundesamt für Statistik, 2018).
In 2017 the buildings sector, including services and households, was responsible for almost 27% of Switzerland’s emissions. This is only a slight decrease from around 32% in 1990. This has been the result of emissions in this sector decreasing much faster – by 26.4% - than in the case of the overall emissions (Bundesamt für Umwelt, 2019a). However, this decrease is still significantly below the 40% emissions reduction goal adopted in the CO2-Regulation from 2012 (Der Bundesrat, 2012a).
Energy efficiency standards for buildings are decided at the regional level. Communes are allowed to introduce even stricter standards (Immopro, 2017). In 2014 the regional governments agreed that new standard - called MuKEn14 – should be implemented by all regions before 2018 and become binding in 2020. For new builds, the standard amounts to 35 kWh/m2 for single and multi-family houses. For warehouses the standards are even stricter and shouldn’t exceed 20 kWh/m2. Each house should also be equipped with a renewable source of power amounting to at least 10 W pro m2 of the living space (EnFK, 2014).
These targets have already been met by some of the buildings complying with the Swiss “Minergie” standards. There are three major categories: Minergie houses should not consume more than 55 kWh/m2 for new single houses and 90 kWh/m2 for renovations. For Minergie-P the standards are 50 kWh/m2 and 80 kWh/m2 respectively. For Minergie-A the standards are 35 kWh/m2 for both, new builds and renovations. By April 2017 there were a total of 43.148 Minergie certified buildings in Switzerland (Minergie, 2017).
The Energy Strategy 2050 will allocate 450 million Swiss francs (USD$ 467 million) from the Cantons and the CO2 levy to reduce buildings’ energy use by 43% below 2000 levels by 2035. It plans to achieve this by allowing an option for allocating energy-efficiency investment costs to the two following tax periods, and a tax deduction of demolition costs when replacing older buildings(Federal Office of Energy, 2017).
The Climate Strategy Agriculture aims to reduce agricultural emissions by at least one third, and includes both adaption to climate change in the agricultural section - and reducing emissions. Switzerland, through the Strategy, recognises that climate change challenges in the agriculture sector require changes in agronomic practices and procedures as well as industry, trade, and consumer behavioural changes (Federal Office for Agriculture, 2017).
The Forest Policy 2020 aims to coordinate the ecological, economic and social demands on forests, managing forests in a sustainable manner. One objective of the Policy is to utilise forest management and wood use to contribute to reducing CO2 emissions and conserve Swiss forests to enhance their resilience (Federal Office for the Environment, 2013).
Disposal of combustible solid wastes on landfills has been prohibited since 2000. Further measures in the waste sector include the ordinance on the avoidance and management of waste which promotes closed-loop material flows. Further improvements could be made in the reduction of environmental pollution and strengthening the reliability of the waste removal system as a whole (Swiss Confederation, 2018).