Swiss voters approve climate law to reach net-zero by 2050

June 22, 2023|Written by |Swiss National Bank

Switzerland has passed a new climate law to cut carbon emissions by 2050, a move described as a “first small step” towards climate responsibility. The public referendum saw 59.1% of voters backing the green energy proposals that commit to reaching net zero by 2050.

The Climate and Innovation Act recognises double materiality and outlines a pathway for transition plans, defining interim and sectoral targets towards 2040 and 2050.

Over a 10-year period, the bill pledges financial support of 2bn Swiss francs for a subsidy scheme to replace heating systems with heat pumps, as well as 1.2bn francs to impel businesses towards green innovation. The government plans to allow companies to build solar parks and wind turbines in the Alps, as one attempt to drive the green transition.

However, the absence of a clear plan for sourcing green electricity has raised concerns. Reports indicate there is limited potential for additional electricity from hydropower, while electricity demand is projected to increase by 30%.

In 2021, a previous attempt to enforce binding carbon emission reductions was rejected by 52% of voters. On that occasion, the right-wing Swiss People’s Party triggered a referendum after pushing back against the government’s proposals, claiming the bill would push up energy prices, arguing it would be counterproductive during the energy crisis triggered by Russia’s invasion of Ukraine.

However, in the most recent referendum voters made it clear action is required to abate the effects of climate change. One factor that perhaps played a role in the referendum was the alarming rates of glacial loss in the country.

Swiss glaciers lost more than 6% of their remaining volume in 2022, according to a recent academic study. Years with an ice loss of 2% have been described as “extreme”, leading to 2022 being described as the worst in history.

Speaking to Green Central Banking, Asti Roesle from Climate Alliance Switzerland said she was relieved about the outcome of the vote, but underlined that “this is only a first, small step towards a responsible climate policy.

The reduction targets for Switzerland’s own emissions set out in the law are still far from a fair contribution to international climate protection, not to speak of Switzerland’s huge financed emissions estimated to be 20 to 40 times higher than domestic emissions.”

Roesle pointed to continued financing from Swiss financial institutions, noting that according to current estimates the Swiss National Bank “still holds more than US$16bn worth of stock in fossil fuel companies”.

This page was last updated June 22, 2023

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