Abstract
Collaborating under the Swiss Energy Modeling Platform (SEMP), five modeling teams (employing an energy systems model and four macroeconomic models with a focus on energy) have carried out a multi-model comparison to assess the economic and technological consequences of reaching emission reduction targets for 2050 in the context of Switzerland. We consider different designs of carbon taxes to compare their economic cost: economy-wide or sector-specific carbon taxes with or without an emission trading system (ETS) in place. All models find that the climate targets can be reached at modest welfare reductions of 0.15–0.37% (if targeting 1.5 tonnes of CO 2 per capita) or 0.24–0.48% (if targeting 1.0 tonnes per capita) compared to a business-as-usual scenario in which the emission level of 1.5 tonnes per capita is exceeded by 83–137%. In contradiction to the additional target of reducing Swiss electricity use, most models find it cost-effective to replace some of the energy supplied by fossil fuels by electricity and thus do not recommend a decrease in electricity use.Most models find that a uniform carbon tax is the most efficient instrument to achieve the emission reduction targets. Those models with a detailed representation of pre-existing mineral oil taxes find that in early periods of climate policy, taxing emission from transport fuels at lower rates than other emissions may be cost-efficient. This effect vanishes as the stringency of targets and thus CO 2 taxes increase over time.
Highlights
In concert with other nations under the Paris climate agreement, Switzerland has set itself targets for greenhouse gas (GHG) emission reduction
We aim at assessing the consequences on the energy system and the economy of achieving two 2050 carbon emission targets: 1.5 and 1.0 tonnes CO2 per capita, which correspond to 70 and 80% reductions compared to 2010 levels
We analyze the case in which a unique carbon price is applied to the whole economy
Summary
In concert with other nations under the Paris climate agreement, Switzerland has set itself targets for greenhouse gas (GHG) emission reduction. Several studies using numerical models have been carried out in order to analyze the technological and economic cost of Swiss climate targets and to compare different policy options for reaching them (see, e.g., Marcucci and Turton (2012);. The Swiss 2050 Energy Strategy, which was approved by public vote in May 2017 and resulted in the New Energy act, has three strategic objectives: increasing energy efficiency (to reduce energy use), increasing the use of renewable-based energy sources, and the withdrawal from nuclear energy (Swiss Federal Assembly, 2018; Swiss Federal Council, 2013a; Prognos, 2012) In this model comparison, we aim at assessing the consequences on the energy system and the economy of achieving two 2050 carbon emission targets: 1.5 and 1.0 tonnes CO2 (tCO2) per capita, which correspond to 70 and 80% reductions compared to 2010 levels. This represents the textbook policy advice, and in an economy without distortions and with rational agents, this is the most cost-effective policy for reaching a given target
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