UBS chief economist Kalt argues in favor of a CO2 tax
Published: Thursday, Jan 18th 2024, 15:30
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UBS economists consider a CO2 tax to be the best instrument for financing the energy transition. Bids, bans and subsidies would not be effective, said Daniel Kalt, Chief Economist Switzerland at the major bank, at the Swiss Electricity Congress in Bern on Thursday.
Kalt believes that limit values, quantity specifications, subsidies or bans - on certain technologies, for example - are inefficient. In addition, these measures would entail a high control burden for the state.
Kalt said that appeals to voluntarily save electricity or calls for solidarity would only achieve "little or not enough". Incentives should therefore be created. And the best way to do this is not through bids or bans, but through a CO2 tax as an incentive levy and price mechanism.
Banks can provide financing
However, Kalt is certain that the Swiss financial sector can finance the energy transition. "I don't think it should fail because of capital," he said.
He referred to a study by the Swiss Bankers Association (SBA) from 2021: according to the study, the climate target of net zero by 2050 would require annual investments of CHF 12.9 billion. And the banks would issue new loans amounting to CHF 30 billion every year, according to the economist.
In return, he expects the electricity industry and energy policy to provide planning security for long-term infrastructure financing, openness to technology and a focus on digitalization.
The Swiss Electricity Congress is an annual meeting of the industry - this year with over 400 participants from business, science and politics. It is organized by the Association of Swiss Electricity Companies (VSE) and Electrosuisse (Association for Electrical, Energy and Information Technology).
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