Switzerland, like most developed economies, is targeting net zero greenhouse gas (GHG) emissions by 2050. Thanks to several advantages, resulting from both previous policy decisions and geography, the country has the lowest carbon intensity (emissions per unit of GDP) of any developed country, and the third lowest globally. Further, it has the lowest energy use per unit of GDP of developed countries, and second lowest globally. Third, it has mostly zero carbon domestic electricity generation, with the majority produced by either hydro or nuclear. And lastly, its carbon pricing is one of the highest in the world, which, at CHF 120 per ton, albeit with various exemptions, lies within the 2030 range recommended to limit warming to below 2oC. [1],[2]

Switzerland’s domestic GHG emissions technically peaked in 1973, though they did not enter a persistent down-trend until the mid-2000s. From 2005 to 2022 they have fallen by a quarter, to just under 42 million tons of carbon dioxide (CO2). Versus 1990, the comparison year for official Swiss emissions targets, overall emissions have fallen by 24%. These reductions have come mostly from a 44% reduction in emissions from buildings, and a 29% reduction in emissions from industry. In 2021 the Swiss government published its long-term strategy for reaching net zero by 2050.[3] It includes interim targets for domestic emission reduction: a 35% cut by 2025, and a 50% cut by 2030, both against a 1990 baseline

Policy guardrails to stay on track

Switzerland has a raft of supporting policy and legislation to meet its climate goals. Some have been in place for many years, such as the CO2 levy, which was introduced in 2008. But much of it is new, entering force in 2025. These include acts like the Electricity Law, the CO2 Act, and the Climate and Innovation Act, which will define the legislative parameters of Switzerland’s transition to a net zero economy. The economic impact of this legislation can vary by sector, company size, and geography.

However, no legislative effort will be enough to eliminate emissions completely for sectors like agriculture and industry. Significant carbon capture and removals capacity, equivalent to around a quarter of current Swiss emissions, will be required. This is both a technological, logistical, and financial challenge, but one that must be tackled if net zero is to be reached.

Stronger together

While Switzerland is currently on target to decarbonize by 2050, challenges persist, and staying the course will be a stretch. Existing and emerging challenges include safeguarding energy security, achieving popular consent for new infrastructure, and maintaining a stable power market and grid while ramping up electrification. This requires careful balancing of environmental, economic, and political priorities.

[1] OECD (2023), Effective Carbon Rates 2023: Pricing Greenhouse Gas Emissions through Taxes and Emissions Trading

[2] World Bank, (2024), State and Trends of Carbon Pricing

[3] EP2050+

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