Switzerland

In the field of renewable energy, the Swiss government decided of special contributions to ensure the market would not weaken despite the COVID-19 crisis. The first three months of 2020 were marked by a strong growth in the installation or announcements of photovoltaic installations. However, the market was likely to weaken from April onwards due to the crisis caused by COVID-19. The Swiss government therefore made available a special quota of equivalent to approximately 47.8 million US dollars, which will enable the development of renewable energies to be stabilised from the summer of 2020 and to give them a new impetus from 2021 onwards.

Currently under discussion in Parliament: The Swiss Parliament is currently working on strengthening the Swiss CO2 legislation for the next decade, by including measures that have also a positive COVID-19 recovery effect. The revision of the CO2 Law includes a number of measures:
• The introduction of a levy on air tickets, of 30-120 Swiss Francs per ticket, depending on the distance travelled and the class of transport. The tax will be levied on all flights departing from Switzerland. Transit flights, flights for medical purposes and flights for sovereign purposes will be exempt from this charge. Private flights will also be taxed, between 500 and 5,000 francs, depending on the size of the aircraft. The levy will be redistributed to the people and businesses. Half of it will be directly redistributed. Nearly half of the tax will go to the new Climate Fund, which will be established for investment in innovation and in CO2 emission reductions such as for modernizing insulation of buildings or the de-carbonization of the traffic (see below).
• A further innovation of the revision of the CO2 Law is the fact that the CO2 tax cap has been increased to 210 CHF, and now a steering tax is levied on fuels and not only on combustibles.
• In addition, the partial earmarking of the CO2 tax can now be used for a number of climate reduction measures in Switzerland, which are not only limited to the buildings programme, as is currently the case under the current law. The Parliament indeed wishes to replace the current incentive instruments by a Climate Fund. This fund shall be financed by the CO2 tax (partial use of max one third), the tax on airline tickets (less than half of the proceeds) and by the revenue from sanction payments and the auctioning of emission rights in accordance with the CO2 law. The Climate Fund will be used to finance long-term emission reduction measures of CO2 emissions from buildings, including measures to reduce electricity consumption in the course of winter months. The Confederation will also finance energy planning measures. In doing so, it intends to promote local renewable energy sources and measures to replace fossil fuel by heat production from renewable energy sources. In addition, the cantons and communes will be able to receive financial support from the Climate Fund of up to CHF 25 million per year, for projects aimed at reducing greenhouse gas emissions. Moreover, financial assistance or guarantees may be granted to promote the innovations to directly or indirectly reduce greenhouse gas emissions. The introduction of a new Climate Fund therefore represents a support measure that could lead to more "green jobs" in Switzerland, especially for the small and medium sized enterprises. This will be key to overcome the crisis.

The aviation industry is both an important employer and an industry of strategic importance for the diversified Swiss economy, which needs international and intercontinental connections. Following the COVID-19 crisis, the government decided to offer bank guarantees (of CHF 1.275 billion) to help the two main airlines overcome their liquidity crisis. Parliament has nevertheless added non-binding environmental requirements. Payment of the credits should be made conditional on the Federal Council's climate objectives being monitored and developed in future cooperation with the airlines. In combination with the new levy on air tickets, introduced as part of the revision of the CO2 Law, this was an acceptable solution for the majority of the Parliament.

Currently under discussion in Parliament: The Swiss Parliament is currently working on strengthening the Swiss CO2 legislation for the next decade, by including measures that have also a positive COVID-19 recovery effect. The revision of the CO2 Law includes the creation of a new Climate Fund. Amongst other uses (see Section A: Climate mitigation measures), the federal government will use the fund to finance measures to prevent the spread of damage resulting from climate change.

To mitigate the consequences of the pandemic, the Federal Council has decided to provide the International Committee of the Red Cross (ICRC) with a CHF 200 million interest-free loan and to contribute CHF 25 million to an IMF rapid credit facility to help countries address the pandemic. A further CHF 175 million is to be allocated to help strengthen internationally active organisations and international cooperation to tackle the Covid-19 pandemic, ensuring amongst other things equitable access to diagnosis, therapies and vaccines. With these funds, Switzerland is showing solidarity during the global crisis.