Disentangling the Effects of Swiss Energy and Climate Policies

Switzerland is embarking on a new energy strategy by phasing out nuclear power, increasing renewables and energy efficiency as well as meeting its Kyoto target of the Second Commitment Period. We contribute to this new cruise by disentangling the effects of the Swiss economic policies to promote energy efficiency and the use of less CO2 intensive energy sources. Those policies encompass a CO2 levy, an emissions trading scheme (ETS), a renewable feed-in tariff as well as some national and international offsetting and target agreements. The policies target different sectors and are linked in various ways either by exchanging tradable units or by serving as exemption criteria. For example, companies can negotiate target agreements or participate in the Swiss ETS in order to be exempted from the CO2 levy. Given these interactions, those policies form a world-wide unique instrument-mix in combining a tax, emissions trading, voluntary agreements, subsidies and project-based mechanisms on a national and international level