How to Mobilize Private Investment for Climate Friendly Products: The New Swiss Technology Fund
| Date | 01 September 2015 |
| DOI | http://doi.org/10.1111/1758-5899.12261 |
| Author | Silvia Ruprecht‐Martignoli,Karine Siegwart |
| Published date | 01 September 2015 |
How to Mobilize Private Investment for
Climate Friendly Products: The New Swiss
Technology Fund
Karine Siegwart and Silvia Ruprecht-Martignoli
Federal Office for the Environment
Swiss Climate Policy at a Glance
By ratifying the Kyoto Protocol, Switzerland committed
to quantified emission reductions for the first commit-
ment period (2008–2012), with a national greenhouse
gas emission target set at 8 per cent below the emis-
sions of 1990 (see, e.g. Swiss Confederation, 2013). The
corresponding national legislation, the CO
2
Act, is based
on Article 74 (protection of the environment) and Arti-
cle 89 (energy policy) of the Swiss Constitution and
entered into force on 1 May 2000. It had set emission
reduction objectives and instruments designed to
achieve the Kyoto commitment of the first period. In
the meantime, this Act has been revised to allow for a
continuation of the climate policy beyond 2012. It
entered into force in 2013 and stipulates the reduction
target of 20 per cent below 1990 levels by 2020 to be
achieved by domestic measures only –in line with the
emission reduction efforts under the Kyoto Protocol for
the second commitment period (2013–2020). This
corresponds to a reduction of approximately 11 million
tonnes of CO
2
equivalent. As a cornerstone of Swiss
climate policy, the CO
2
Act sets out various measures
for transport, industry and buildings and tackles also
climate change adaptation.
To reduce emissions in the transport sector, CO
2
emission limits for newly registered vehicles have been
in place since 2012, in line with EU regulations. In
addition, motor fuel importers are required to offset
part of the CO
2
emissions caused by transport through
domestic measures. The CO
2
levy on heating and pro-
cess fuels is the key instrument to achieve the CO
2
emission reduction targets in the industry and house-
hold sector. It has been levied since 2008 and, because
interim targets were not met, gradually increased –the
last time in 2014 from CHF 36 to CHF 60 per tonne of
CO
2
. Depending on the emission reductions achieved,
the levy will be increased twice by 2020 to a maxi-
mum tax rate of CHF 120 per tonne of CO
2
. To safe-
guard their international competitiveness, CO
2
intensive
industries are exempt from the CO
2
levy, if they either
participate in the emissions trading scheme or commit
to emission reductions.
Approximately two-thirds of the levy’s revenue is
redistributed to the public and the economy indepen-
dently of consumption. One-third of the revenue (max.
CHF 300 million/year) is invested in the buildings pro-
gramme to promote energy-efficient renovations and
renewable energies. Another CHF 25 million per year
until 2020 is invested into the Technology Fund to pro-
mote innovative technologies mainly aimed at climate
change mitigation with loan guarantees.
Aim of the new Swiss Technology Fund
The Technology Fund was brought into the debate in
parliament while discussing the revised CO
2
Act. As a
supportive instrument of the climate policy measures, it
aims at fostering marketable, climate friendly innovations
of Swiss companies that could not (or not economically
viable) be commercialized without the guarantee. It also
purposes to strengthen Switzerland as a centre for
innovation in clean technologies and to promote the
competitive position of domestic small and medium
enterprises (SMEs). Looking at the innovation life cycle,
the Technology Fund focuses on the commercialization
phase of a climate friendly product. The existing federal
government’s range of promotional measures and other
public support programs (mainly direct project financing
and consulting) are primarily aimed at companies and
projects in earlier innovation stages like research or
development of prototypes and pilot plants. Therefore,
the Technology Fund aims to bridge the gap in the pub-
lic avenues of support between research/early start-up
funding and regular corporate loans for SMEs. For len-
ders, the public loan guarantees provided by the Tech-
nology Fund will alter the risk profile considerably.
Therefore, the fund aims to mobilize private investments
for novel climate friendly projects with limited public
funding.
©2015 University of Durham and John Wiley & Sons, Ltd. Global Policy (2015) 6:3 doi: 10.1111/1758-5899.12261
Global Policy Volume 6 . Issue 3 . September 2015
312
Special Section Article
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