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Project: Evaluation of the Effectiveness of Swiss Climate Policy Instruments

CO2 levies in Switzerland

One of the most important Swiss climate policy instruments is the CO2 levy on fossil fuels. Since its introduction in 2008, this has increased from 12 Swiss francs per metric ton of CO2 to 84 Swiss francs per ton of CO2 in 2016. As a result, consumers now pay a tax of 22.26 cents per liter of extra light fuel oil and 21.67 cents per kg of natural gas. Current CO2 legislation provides for further increases up to a maximum of 120 Swiss francs per ton of CO2 emissions. An exemption from the CO2 levy is possible on application for companies that enter into a binding commitment to CO2 reduction with the Federal Office for the Environment. The CO2 levy will also play an important role in fulfilling Switzerland's Paris Agreement climate protection target, and the aim of this project is to evaluate the impact of the CO2 levy on the reduction of greenhouse gas emissions. As a preliminary project, we conducted a literature review of environmental tax evaluation studies to identify a suitable empirical method for Swiss ex-post evaluation. We plan to use energy consumption data from Swiss industrial and service companies to evaluate the impact of the CO2 levy or target agreements.