carbon tax - elsewhere - 1. switzerland

Hi

I am as confused and irritated as the rest of you by Ms Gillard's about-face on the Carbon Tax. I do, however, believe we need some mechanisms to change our ways - it's just that nobody quite knows how yet another tax is going to achieve this. Gillard simply jumped this on us without much explanation. No matter what the coalition will throw at it, I believe any government will eventually come to the conclusion that only some form of financial disincentive (i.e. tax) will shift our thinking towards cleaner ways of behaving.

I found this on Switzerland on Wikipedia - a country which is western, prosperous, ultra-democratic, individualistic and certainly given to a capitalist way of thinking. They actually began taking action on CO2 emissions in 2005 and now it seems they're on track to meet the Kyoto protocol of reducing emissions by 8% by 2012, and this is how they've gone about it, but taxation was an important tool. (I apologise for the use of u.c. type, as I know no other way to make the important bits stand out.)

"IN JANUARY 2008, SWITZERLAND IMPLEMENTED A CO2 INCENTIVE TAX ON ALL FOSSIL FUELS, such as coal, oil and natural gas, unless they are used for energy. Gasoline and diesel fuels are not affected by the CO2 tax. The tax is collected by the Swiss Federal Customs Administration. It is an incentive tax because it is designed to promote the economic use of fossil fuels.[108] The tax amounts to CHF 12 per metric tonne CO2

(US $11.41 PER METRIC TONNE CO2),

which is the equivalent of CHF 0.03 per litre of heating oil (US $0.0076 per gallon) and CHF 0.025 per m3 of natural gas (US $0.024 per m3).[109][110] This tax comes from Switzerland's 1999 Federal Law on the Reduction of CO2 (CO2 Law). Although Switzerland prefers to rely on voluntary actions and measures to achieve emissions reductions, the CO2 Law mandated the introduction of a CO2 tax if voluntary measures proved to be insufficient. In 2005 the federal government decided that additional measures were needed to achieve emissions reductions and meet Kyoto Protocol commitments of an 8% reduction in greenhouse gas emissions below 1990 levels between 2008 and 2012.[112] In 2007, the CO2 tax was approved by the Swiss Federal Council, coming into effect 2008.[109] In 2010, the highest tax rate will be CHF 36 per metric tonne of CO2 (US $34.20 per metric tonne CO2).

Companies are allowed to exempt themselves from the tax by participating in a Swiss cap-and-trade emissions trading scheme where they voluntarily commit to legally binding targets to reduce their CO2 emissions.

Under this scheme, emission allowances are given to companies for free, and each year emission allowances equal to the amount of CO2 emitted must be surrendered by the company. Companies are allowed to sell or trade excess permits. However, should a company fail to surrender the correct amount of allowances, they must pay the CO2 tax retroactively for each tonne of CO2 emitted since the exemption was granted. About 400 companies take part in trading CO2 emission credits under this program.

In 2009, for the second year in a row, the companies returned enough credits to the Swiss government to cover their CO2 emissions for the year. The 2009 report shows that companies emitted only about 2.6 million tonnes of CO2, falling well below the total permissible quantity of 3.1 million tonnes.

The Swiss carbon market still remains fairly small, with few emissions permits being traded. Swiss domestic law tends to favor the use of a CO2 tax to achieve emissions reductions and this preference for taxes combined with an immature carbon market could partially explain why Switzerland has not yet joined the European Union Emission Trading Scheme (EU ETS).

The tax is revenue neutral, and its revenues are redistributed proportionally to companies and to the Swiss population. For example, if the population bears 60% of the tax burden, they will receive 60% of the redistribution.

For companies, revenues will be redistributed to all companies, except those who chose to exempt themselves from the tax through the cap-and-trade program. The revenue is given to the companies in proportion to the total payroll of their employees and is distributed through an AHV compensation fund (Federal Old Age and Survivors' Insurance) that pays the relevant amount of revenue to the company.

The revenues from the tax that were paid by the Swiss population are redistributed equally to all Swiss residents through health insurance companies and a deduction on their insurance premium.

In June 2009 the Swiss Parliament decided to allocate about one-third of the revenue from the carbon tax to a 10 year building program for climate-friendly building renovations. This program promotes building renovations, the use of renewable energies, the utilization of waste heat, and building engineering.

As part of the early-redistribution program decided by the Swiss Federal Council in 2009, the tax revenue from 2008, 2009 and 2010 are being distributed in 2010. In 2008 alone, the tax of CHF 12 per tonne of CO2 raised around CHF 220 million (US $209 million) in revenue.

As of June 16, 2010, a total of around CHF 360 million (US $342 million) have become available for distribution to the Swiss population and economy. It is estimated that in 2010, at the highest tax rate of CHF 36 per tonne of CO2, the revenue from the tax will be about CHF 630 million (US $598 million).

Out of the projected CHF 630 million, CHF 200 million (US $190 million) will be allocated for the building program and the remaining CHF 430 million (US $409 million) will be redistributed in 2010 to the population and the economy.

The International Energy Agency (IEA) commends Switzerland's CO2 tax for its excellent design and notes that the recycling of the tax revenues to all citizens and enterprises is "sound fiscal practice".

Since 2005, transport fuels in Switzerland have been subjected to the Climate Cent Initiative surcharge ? a surcharge of CHF 0.015 per litre on gasoline and diesel (US $.0038 per gallon)-- which will remain in place until the end of 2012. However, this surcharge can be supplemented with a CO2 tax on transport fuels if emissions reductions are not satisfactory.

In their 2007 review, the IEA recommended that Switzerland implement a CO2 tax on transport fuels or increase the Climate Cent surcharge to better balance the high costs of meeting emissions reductions targets across sectors.[119]

Switzerland is currently on track to meet its Kyoto Protocol commitment of an 8% reduction in greenhouse gas emissions below 1990 levels between 2008 and 2012. The combination of the CO2 tax and other voluntary measures by businesses and private individuals is enabling Switzerland to achieve these reduction goals."

Feel free to check out how other countries are going about shifting their industries towards cleaner modes of behaving - the information is available on all sorts of sites on the internet; anecdotal information from overseas friends and families could also be interesting.

Cheers

Taurisk