Swiss Negative Emissions Fund – paying for Net Zero

In this paper, we propose setting up a fund to finance the removal of all Swiss territorial GHG (greenhouse gas) emissions from 2030. The fund will accelerate decarbonization and help reach annual net zero emissions around 2040, and then progressively remove all past emissions emitted from 2030. The fund will be entirely funded by emitters, based on the “polluter pays” principle, with no taxpayer money involved. The background information and analysis can be found in our December 2021 E4S White Paper “Carbon removal, net zero, and implications for Switzerland”. The proposed Swiss Negative Emissions Fund is a public fund, starting in 2025 and reaching full scale in 2030, with an obligation for all Swiss territorial emitters to pay for removal of “their” CO2. The compulsory payment into the fund replaces the existing CO2 levy and ETS, and is due each quarter. Payments can be aggregated at the wholesale, retail or importer level; individuals generally do not contribute directly. The removal of CO2 from the atmosphere requires the fund to build and scale a diversified portfolio of suitable biological and geological projects, which takes time. As initially the emissions are high and removals only starting, the fund will first accumulate reserves, which will be drawn down later as removal projects develop, and fewer remaining emitters continue paying into the fund. We model the fund with two scenarios: the baseline adapted from Switzerland’s Long-Term Climate Strategy, and a more ambitious climate policy. Our model suggests reaching net zero and respecting the 1.5°C budget would be efficient and affordable, economy-wide. We also propose a pilot fund at 1% scale of the full fund, to test all assumptions, allowing the Swiss Negative Emissions Fund to start with real-life validation. As we publish this paper, the war in Ukraine gives new urgency to energy security, and requires asking which regimes and wars are financed by European oil and gas imports. We hope this much-needed debate will make defending continued fossil fuel use morally unacceptable and accelerate the deep decarbonization.