From 2006, a tax on CO2 will be applied to fossil fuels in Switzerland An article establishing a CO2 tax for Switzerland on fossil fuels: mechanisms and operation ...

Keywords: CO2, tax, fuel, diesel, gasoline, fuel, carbon, pollution, greenhouse effect

The Swiss Federal Council has decided to introduce a CO2 tax applicable to fuels. From 2006, a tax of 35 Swiss francs will be levied on each tonne of CO2 emitted, corresponding to around 9 cents per liter of heating fuel, specifies the press release from the Federal Department of the Environment, Transport, Energy and Communication (DETEC).

The CO2 tax applicable to fuels is an incentive tax, the proceeds of which will be redistributed to the population and the economy through health insurance funds.
Companies whose competitiveness could be weakened by the CO2 tax will be able to request exemption from it if they formally commit to reducing their CO2 emissions. Thanks to this possibility of exemption, the effect of the redistribution of the tax from industry and crafts to services, which consume less energy, will be moderate, underlines DETEC.
In addition, according to the Federal Council's assessment, this tax has the advantage of exercising broader and longer-term incentives on prices, which will continue to appear after 2012 with a view to new reduction targets. The consequences for the economy could even be slightly positive, he adds, indicating that this tax will lower health costs and that it will have positive effects on innovation and technological progress.

On the other hand, the Federal Council has chosen to test the effectiveness of the "climate cent" on fuel and based on a voluntary basis. The CO2 law in Switzerland already provides that business circles and companies can take voluntary measures to reduce their CO2 emissions in order to avoid the introduction of a systematic tax. Thus, a climate cent will be collected from the oil industry on each liter of imported fuel. The resulting income - 70 million Swiss francs - must be used in part to finance projects in third countries and thus to acquire emission certificates. In Switzerland, it is above all a question of encouraging biofuels and of taking measures in the field of fuels (buildings, infrastructures).
To implement this "climate cent", it is planned to create a foundation made up of 10 to 20 people (the Petroleum Union, Economiesuisse, Swissmem, the Swiss Society of Landowners and the Swiss Road Federation), which would choose the projects. to finance.

The solution outlined by the Federal Council, however, raises a number of practical questions that need to be studied in more detail. DETEC is therefore in charge of preparing a proposal for the concrete application and submitting a message to the Federal Council before the summer.
The system will have to prove its effectiveness before the end of 2007. Indeed, if the climatic centime is not applied or does not deploy the necessary effects, it will extend the tax on CO2 to gasoline.