Phasing out fossil fuels: Switzerland becomes a climate-neutral Alpine republic

Phasing out fossil energy
Switzerland becomes a climate-neutral Alpine Republic

06/19/2023, 08:21 am

Switzerland now has a fixed and ambitious climate target. This is decided by the population in a referendum. However, the billions in funding will not be enough in the long run.

By 2050, Switzerland is to become climate-neutral – 59.1 percent of the population voted in favor of this goal in a referendum. In principle, this means that the exit from fossil fuels has been sealed, much to the delight of climate activists. But the way to get there is not so clear. First of all, the climate protection law, which has now been approved by the people, primarily provides for subsidies. Without bans and stricter measures, however, it will probably not work. What does the Swiss Climate Strategy 2050 envisage in detail?

Funding programs worth billions

With the Climate Protection Act, funding programs worth billions are planned to replace heaters with fossil fuels and electric resistance heaters. Federal funds are also used to promote technical innovations that benefit climate protection and the achievement of climate targets. A total of CHF 3.2 billion (around EUR 3.3 billion) is initially available.

Business support

Companies should be supported in converting to climate-friendly technology. In addition, more wind turbines are to be installed. “As of today, our country is seriously on the way to phasing out fossil fuels, which gives planning and legal certainty,” Greenpeace Switzerland welcomed the approval of the population.

A path with milestones

The goal of “net zero” must be reached by 2050. An interim goal is that by 2040, emissions must be reduced by 75 percent compared to 1990 levels. There are also intermediate targets for homeowners, transport and industry. Emissions from buildings – for example from heating – must fall by 82 percent by 2040 compared to 1990. Industry, in turn, must achieve a 50 percent reduction by 2040 and transport by 57 percent.

Switzerland quite divided when it comes to attitude

Urban regions and western Switzerland also said yes to the law on climate protection goals. In rural areas, on the other hand, the rejection was clear in some cases: seven Swiss-German cantons said no. In the mountain area particularly affected by climate change, the majority said no.

No pioneer in Europe

With its strategy, Switzerland is not a pioneer in Europe. For example, Norway wants to be carbon neutral by 2030, Sweden by 2045 and France, Great Britain or New Zealand by 2050 at the latest.

Also yes to higher corporate taxes

In addition to climate neutrality, 78.5 percent of the Swiss voted on Sunday in favor of international corporations paying a minimum tax of 15 percent from next year. Some cantons currently have a tax below this level.

The step affects companies with at least 750 million euros in annual sales – and thus around one percent of companies operating in Switzerland. Above all, Basel and Zug, where large pharmaceutical and trading groups are based, would benefit from higher tax revenues.

Positive echo of the economy

Business associations welcomed the move. According to the association of the Swiss tech industry, Swissmem, there was “no better alternative” to the OECD minimum tax. In addition, the yes now means legal certainty for the companies concerned.