What are the best policy measures to decarbonise Switzerland? A stand-alone carbon tax? A combination of taxes, subsidies, bans and standards? The DECARB project explores these questions and shows the advantages of combining measures to reach climate neutrality.

Academics typically recommend the introduction of a carbon tax to shift the economy away from fossil fuels and mitigate climate change. However, this policy proposal usually faces strong opposition from industry and the public, even if the revenues are fully redistributed.

In the DECARB project, a team of researchers investigated whether the use of other measures such as subsidies, standards or bans could facilitate the decarbonisation of Switzerland to an extent compatible with its goal of climate neutrality by 2050. In particular, it looked at how combining these measures into „instrument mixes“ might be superior to using just one of them, including the carbon tax. Overall, its findings suggest that mixes offer significant potential to advance climate policy.

DECARB is a research project sponsored by the EES programme and coordinated by the École Polytechnique Fédérale de Lausanne (EPFL).

The project addresses the colossal challenge of decarbonising the Swiss energy system, including transport, residential buildings, and industry. Given that individual policy measures all have shortcomings, the project investigates how mixes of measures could enhance climate policy. Thanks to a pluri-disciplinary approach, DECARB identifies desirable mixes that would allow Switzerland to reach climate neutrality by 2050.

First, a review of the academic literature shows that there are several market failures, barriers to decarbonisation and policy constraints that justify the use of instrument mixes rather than a stand-alone carbon tax. While the desirable mixes differ across sectors, given the different target actors and technologies, some carbon tax is found to play a key role in all of them.

Second, using a mathematical model of the Swiss economy, the researchers show that the deep decarbonisation induced by the mixes has a negligible impact on gross domestic product (GDP), in the order of 1‰. When complementary instruments are included in the policy landscape, the carbon tax rate required to achieve an ambitious emissions target can be divided by about two. On the other hand, a stand-alone carbon tax allows for the highest rebate to households among the scenarios considered.

Third, using an online survey, the team provides evidence that Swiss citizens have a strong preference for instrument mixes rather than a stand-alone carbon tax. Language region, number and type of cars owned, and perceived threat of climate change are found to be important predictors of instrument preferences.

Full report: Cocker, F., Thalmann, P., Vielle, M., Vöhringer, F., Weber, S. (2024). DECARB – Mixes of policy instruments for full decarbonisation by 2050. Project funded by the Energy-Economy-Society (EES) research programme of the Swiss Federal Office of Energy (SFOE), Bern.

Authors: Fleance Cocker (EPFL), Philippe Thalmann (EPFL)
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