Study on climate-damaging Subsidies
Switzerland is not on track to achieve its net-zero emissions target. The country lacks sufficient climate protection measures and maintains various subsidies and tax concessions that not only burden the state financially but also promote climate-damaging behavior. A recent study has now quantified these effects.
Subsidies, including tax concessions that reduce costs for recipients, are economic policy instruments designed to promote certain developments. The study by EPFL and the University of Lausanne analyzes the unintended climate and financial side effects of some of these tax concessions.
The findings reveal that many of these measures have a significant negative impact on the climate, causing an additional 2.5 million tons of CO2 emissions annually. This amounts to almost 6% of national greenhouse gas emissions and costs the state 4.6 billion Swiss francs.
The state invests heavily in climate protection while simultaneously undermining it elsewhere – often unknowingly.
The most effective change would be eliminating tax exemptions for the aviation industry. Currently, international air traffic is exempt from mineral oil tax and value-added tax. Abolishing these tax concessions alone would reduce CO2 emissions by almost 1.5 million tonnes per year and generate over 1.3 billion francs in additional tax revenue.
Furthermore, the results show that tax concessions in commuter traffic – such as for company cars and commuter deductions – are also harmful to the climate and influence user behavior.
Why is Clima Now supporting this study?
Clima Now, along with the Mercator Foundation and the Migros Pioneer Fund, financially supported this study. The findings highlight the negative impact of certain tax concessions on both the climate and public finances, contributing significantly to climate policy discussions and the current debate on combating structural deficits in the federal budget.
It's important to consider that once implemented, subsidies are difficult to abolish, even when they have long fulfilled their purpose. This study provides an impetus to change this and to examine existing and new tax concessions for their climate impact.
