❌ In a national referendum, Switzerland has repealed their local "CO₂ Law", rolling back the associated carbon tax, and severely undermining Swiss efforts to locally reduce carbon dioxide emissions.
A thread of some observations...
#CO2Gesetz
A thread of some observations...
#CO2Gesetz
Firstly, the result. The referendum on the "CO₂ Law" was narrowly decided:
Support 1,568,036 (48.4%)
Repeal 1,671,150 (51.6%)
59.7% of voters participated which is very high for Switzerland.
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Support 1,568,036 (48.4%)
Repeal 1,671,150 (51.6%)
59.7% of voters participated which is very high for Switzerland.
2/
The repeal of the Swiss CO₂ Law makes it very likely that Switzerland will ultimately miss their stated goal of a 50% reduction in carbon dioxide emissions by 2030 relative to 1990 levels.
Under existing laws, only a bit more than 1/2 of this target reduction is expected.
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Under existing laws, only a bit more than 1/2 of this target reduction is expected.
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This is, to my knowledge, the first time a carbon tax of any form has been the subject of a large-scale referendum anywhere in the world.
The loss may perhaps have lessons for efforts to enact similar legislation in other parts of the world.
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The loss may perhaps have lessons for efforts to enact similar legislation in other parts of the world.
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The Swiss CO₂ Law had many provisions, but among its most significant was a carbon tax and partial dividend.
It would have allowed local carbon taxes to increase to
Heating Oil & Natural Gas: 210 CHF/tonne CO₂
Petrol & Diesel: ~50 CHF/tonne CO₂
1 CHF = 1.1 US$ = 0.92€
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It would have allowed local carbon taxes to increase to
Heating Oil & Natural Gas: 210 CHF/tonne CO₂
Petrol & Diesel: ~50 CHF/tonne CO₂
1 CHF = 1.1 US$ = 0.92€
5/
For perspective, the current EU Emissions Trading Scheme has a carbon price of ~60 CHF / tonne.
Economists give varying estimates but an economy-wide average price of ~120 CHF / tonne CO₂ in 2030 may be considered plausibly consistent with a net zero by 2050 pathway.
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Economists give varying estimates but an economy-wide average price of ~120 CHF / tonne CO₂ in 2030 may be considered plausibly consistent with a net zero by 2050 pathway.
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Approximately 2/3 of the collected revenue from the Swiss CO₂ Law would have been returned to the public via a reduction in health insurance premiums.
The remainder would have funded green tech, building efficiency improvements, and similar goals.
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The remainder would have funded green tech, building efficiency improvements, and similar goals.
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The government estimated that after the healthcare rebates, the average family of four would pay ~100 CHF more per year if they made no lifestyle changes.
Opponents estimated higher costs, and often ignored the rebates when discussing those costs.
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Opponents estimated higher costs, and often ignored the rebates when discussing those costs.
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So what happened?
Some of the factors driving the rejection of the Swiss CO₂ Law are highly specific to Switzerland, but other factors may have wider relevance.
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Some of the factors driving the rejection of the Swiss CO₂ Law are highly specific to Switzerland, but other factors may have wider relevance.
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Firstly, the Swiss CO₂ Law was a grand compromise. It was nominally backed by most of the political parties in government, with the exclusion of the large far-right Swiss People's Party (SVP).
However, the compromise ultimately left many dissatisfied.
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However, the compromise ultimately left many dissatisfied.
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Green parties felt the Swiss CO₂ Law didn't actually go far enough.
Liberal parties felt aspects of the law (e.g. the technology fund) were too illiberal.
Etc.
So when it came time to champion the law to their members, many parties seemed rather luke-warm and reluctant.
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Liberal parties felt aspects of the law (e.g. the technology fund) were too illiberal.
Etc.
So when it came time to champion the law to their members, many parties seemed rather luke-warm and reluctant.
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More troubling though, after the compromise passed with large majorities, organizers appeared to believe they would have an easy victory.
They thought a sleepy campaign, avoiding emotion and unpleasant debate, would still be enough.
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republik.ch/2021/06/12/obd…
They thought a sleepy campaign, avoiding emotion and unpleasant debate, would still be enough.
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republik.ch/2021/06/12/obd…
The organizers offered vague platitudes about fairness and climate protection and the "Swiss Way", and appear to have been caught remarkably unprepared for the shit-storm that was coming for them.
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Led by the SVP and fossil fuel interests (including Switzerland's largest chain of fueling stations), the well-funded campaign against the CO₂ Law was anything but vague.
They hammered home costs with slogans like "Driving only for the rich?" and "Renter ripoff?"
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They hammered home costs with slogans like "Driving only for the rich?" and "Renter ripoff?"
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The Swiss CO₂ Law was quickly cast as a class issue (rich vs. poor, urban vs. rural) and a pocketbook issue, with slick fear-driven messaging.
The repeal campaign made it personal, while to promoters primarily offered vague & lofty rhetoric about social goals.
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The repeal campaign made it personal, while to promoters primarily offered vague & lofty rhetoric about social goals.
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Belatedly, the organizers awkwardly tried to course-correct, and the CO₂ Law campaign ultimately ended up as one of the most expensive referendum campaigns in Swiss history, but much of the damage was already done before organizers were ready to react.
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This gets to a fundamental political concern with taxes on fossil fuels.
The pain (higher taxes) is concrete, while the benefit (climate protection) is nebulous.
As much as carbon taxes might make sense economically, they can be a hard sell politically.
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The pain (higher taxes) is concrete, while the benefit (climate protection) is nebulous.
As much as carbon taxes might make sense economically, they can be a hard sell politically.
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Some governments appear to have already taken this lesson and turned to other kinds of legislation, e.g. "new green jobs", "tax breaks for EVs and heat pumps", "new infrastructure", etc.
In other words, emphasizing tangible personal benefits alongside the climate benefits.
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In other words, emphasizing tangible personal benefits alongside the climate benefits.
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Now that the Swiss CO₂ Law has been repealed, Switzerland will have to return to the drawing board and find a new approach.
However, that will take time (likely years), and it is unclear what kind of a new climate compromise would be able to succeed.
19/19
However, that will take time (likely years), and it is unclear what kind of a new climate compromise would be able to succeed.
19/19
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