Economic and Political Structures
In this chapter, we present measures for decarbonizing the economy and democratizing decision-making processes.
You are reading the full version of the Climate Action Plan. Do you just want to read the Executive Summary? Click here for the Executive Summary:
Some abbreviations are used in this chapter. You can find explanations of all abbreviations in the glossary.
Rapid Decarbonization Requires Radical Measures. In order to contribute a fair share to staying within 1.5 degrees Celsius of global warming above pre-industrial levels, the Swiss CAP proposes a rapid decarbonization of the Swiss economy in line with a goal to reach net zero emissions by 2030. Rapid decarbonization in roughly 10 years requires radical changes, and it will be impossible to be achieved without a reduction of production and consumption of goods and services that are fossil-fuel intensive. The absolute reduction of material production and consumption will be achieved through a combination of regulatory measures, bans, and taxes.
Such a vision is based on radical structural changes of the economy to transform the current economic growth oriented – capitalist system into a well-being economy that is compatible with the socio-ecological boundaries (Raworth 2017) and whose political and economic stability is not dependent on continued economic growth (Kallis 2017; Rosa, Dörre, and Lessenich 2016). In the transition to such a well-being-oriented economy, markets will continue playing a role in the allocation of resources, but they will be regulated to avoid social and environmental costs (e.g. sections 4-6). In such a well-being-oriented economy, people's welfare and retirement will not depend on having a job in fossil-fuel dependent industries. Obviously, the politics of distribution of societal gains produced through economic activities will have to be radically changed. With an economic pie that is not necessarily growing, and it will probably shrink (at least temporary), less has to be distributed more equally.
Such a rapid decarbonization of the economy will be based on less working hours, and it will lead to fewer and fewer jobs in fossil-fuel intensive industries and services. To ensure a just transition for all means to offer new job opportunities. The reduced amount of fossil fuel intensive jobs will be offset with more green jobs that will be created or supported by the state. A green and a just transition will be based on jobs in renewable energies, housing retrofitting, education, ecosystem care and regeneration (urban and rural), care of children and elderly, public space creation and care (urban gardens, sport facilities, parks, libraries, etc.).
Income losses due to less working hours will be compensated through a combination of higher wages or direct state payments, improved public services (such as healthcare and public transport), and smaller heating costs in retrofitted housing. Community-based services will be established or expanded to facilitate an economy of exchange and repair. A local economy of exchange and repair will promote a decoupling of well-being from excessive material consumption. The creation of new – green – job opportunities will further support this green transition (section 2).
To ensure a lower level of overall consumption of fossil fuel intensive goods and services, the prices of such products will be increased through taxes and levies, and some of them will be banned (see section 1 and other CAP chapters). Where possible, the production of goods and services will be made more sustainable through renewable energies. However, it will be impossible to achieve the goal of the CAP by simply replacing all fossil fuel-based goods and services with green energy powered goods and services (e.g. by electrifying individual transport). A decrease in consumption of energy, goods and services will be necessary. A just transition must be a decolonizing transition. It has to ensure that we do not create massive new demands for rare earth and metals (for wind and solar energy installations) that need to be extracted by mining communities in the Global South (Aronoff et al. 2019; Bernes 2019; Táíwò 2019b; 2019a) (see chapter International Collaboration and Climate Finance).
The private sector will commit to operate according to environmental and labor standards that are in line with a green and just transition. Shareholder value governed corporations will be gradually transitioning to cooperatives in order to reduce the pressure to grow (see chapter Industry and Service Sector). Businesses – irrespective of ownership structure and legal form - will be held accountable through a new set of climate justice laws. A smaller absolute level of consumption will ensure that we need to employ as little negative emission technologies as possible. These technologies will only include what is technically feasible today or in the near future.
The banking sector will divest from fossil fuel investments and its role will be to support a green and just transition of the Swiss economy while also supporting climate change adaptation measures abroad. To ensure a climate compatible role for the Swiss banking sector, it will operate with new objectives. (see chapter Financial Sector).
Such a society-wide green and just transition will be supported through the democratization of decision making (see Boosting Democracy). Movements and Climate Councils will be empowered to reanimate democracy to transform society and economy in line with the goal to stay within 1.5 degree Celsius of global warming, while paying attention to principles of climate justice. We describe such a boosted democracy as a transformational democracy. Similar to advocating for climate justice laws, climate movements and councils will push for a set of fast-track parliament decisions to implement the CAP quickly.
To sum up, the CAP pursues a vision that - in the words of Riccardo Mastini - is based on “three distinct but interrelated goals: decreasing energy and material use, decommodifying the basic necessities of life, and democratizing economic production” (Mastini 2020).
Current situation - Political Economy of Climate Change
This chapter does not offer concrete policies but rather an analysis of the current situation, on which policies should be based on. As the chapter illustrates, we do not limit our focus to GHG emissions being produced within the Swiss borders, even though this so-called territorial approach underpins the UNFCCC model. Given that the Swiss GHG footprint is driven by the consumption of imported goods and services, we take a more comprehensive, structural approach to how the entire Swiss footprint could be reduced in the next 10 years. Contrary to a limited focus of the territorial approach, the consumption-based approach allows us to account in an integrated and holistic way for emission “displacements and problem shifting through international trade” (Haberl et al. 2020, 3,12).
Yearly GHG Emissions Since 1990 or Earlier and Business-As-Usual (BAU) Emission Projections
A) GHG Emissions of Switzerland (territorial perspective)
According to the latest greenhouse gas inventory report, 47.24 million tons of CO2-equivalents were emitted on Swiss territory in 2017, which equals 5.6 tons CO2-equivalents per capita. In 1990, total greenhouse gas emissions amounted to 53.71 million tons of CO2-equivalents, which corresponds to 8.1 tons CO2-equivalents per capita. This means a total reduction of 6.47 million tons of CO2-equivalents from 1990 until 2017, or 12% (FOEN 2019d).
The greenhouse gas inventory is yearly published by the FOEN and includes reporting elements under the Kyoto Protocol. For Switzerland’s climate policies, the Kyoto Protocol and the CO2 law (for its implementation) are of central importance. The inventory includes the reporting of carbon dioxide emissions as well as methane (CH4), N20, HFCs, PFCx, SF6, NF3, as determined under the United Nations Framework Convention on Climate Change and the Kyoto Protocol. On the contrary, the CO2 law only covers CO2 emissions and neglects further climate-acting gases.
Neither the CO2 law nor the Kyoto Protocol include international air or shipping traffic. However, those figures are provided in the greenhouse gas inventory. International air travel emissions that are attributable to Switzerland amount to 5.38 million tons of CO2-equivalents, international shipping amounts to 0.02 million tons of CO2-equivalents (2017). Land use, land-use change and forestry (LULUCF) are neither included, but data provided: LULUCF emissions amounted to 1.6 million tons of sequestered CO2-equivalents in 2017.
The following data refer to the greenhouse gas inventory and name carbon dioxide and further greenhouse gas emissions by gas and by sector, according to the frameworks of the CO2 law and Kyoto protocol as well as the CO2 ordinance (FOEN 2019a)
Table 9‑1 Territorial emissions by greenhouse gas according to the CO2 law and Kyoto protocol. (FOEN 2019a)
|Million tons CO2-equivalents||Index|
Table 9‑2 Territorial emissions by sector according to the CO2 Ordinance (Buildings, Traffic, Industry CO2-VO, other).
|Million tons CO2-equivalents||Index|
Energy-related emissions from transportation and heating fuel account for the biggest share in greenhouse gas emissions. Figure 9‑1 shows that emissions from heating fuels have slowly declined since 1990, which may be caused by the implementation of a carbon levy on combustibles. Transportation fuels, however, have remained untaxed and transport related emissions have not shrank but grown slightly (FOEN 2019a).
The CO2 law defines a reduction goal for domestic greenhouse gases by at least 20% from their 1990 level, by 2020. The CO2 Ordinance defines the reduction goals per sector, which are namely: at least 60% from the 1990 level for the building sector, at least 90% from the 1990 level for the traffic sector, at least 85% from the 1990 level for the industry sector.
The data reveals that greenhouse gas reduction goals 2020 (defined in the CO2 law) could be attained only in the industry sector, which may be in part due to the outsourcing of industrial production abroad that took place since 1990. On the other part, this is mainly due to the target agreements combined with the carbon levy, which has incentivized the industry to reduce emissions. While there was an observable reduction of greenhouse gas emissions in the building sector, the goal was not reached. More problematic is the situation in the traffic sector, where greenhouse gas emissions even have increased since 1990. As of the most recent data, the shares greenhouse gas emissions of each sector are namely:
- 32% by traffic (without air traffic)
- 26% by buildings
- 23% by industry
- 19% by agriculture, waste and synthetic gases
B) Territorial Emissions vs. Consumption-Based Emissions
The current legislation on climate policy, namely the CO2-Gesetz, the centerpiece of Swiss climate policy, focuses on domestic emissions only. However, this approach ignores greenhouse gas emissions that are emitted abroad to produce (and transport) goods which are consumed in Switzerland (imported emissions). Taking a consumption-based perspective, emissions in Switzerland are almost three times as large as domestic emissions (Figure 9‑2), which makes Switzerland a case where the consumption-based approach is particularly relevant (Dao et al. 2015).
The Federal Office for the Environment calculates consumption-based emissions of 14 tons CO2-equivalents per capita or a total of 116 million tons CO2-equivalents (as of 2015) (Frischknecht et al. 2019). The so-called greenhouse gas footprint thereby reveals that Switzerland’s total emissions from a consumption perspective are well above the global average of nearly 6 tons CO2-equivalents. Taking the concept of planetary boundaries of staying within 1.5 degrees Celsius of global warming, the Swiss per-capita climate footprint is 23 times higher than acceptable to stay within boundaries (Dao et al. 2015). For our goal to stay within 1.5 degrees, the challenge is even higher.
Taking into account further emissions which lay within Switzerland’s responsibility, one must not neglect emissions caused by the financial sector. The total investments of the Swiss financial sector cause about 1,100 million tons CO2-equivalents per year, which means they exceed domestic emissions by more than 20 times. Thereby, a global warming scenario of 4 to 6°C is supported (Oehri et al. 2015) (see chapter Financial Sector).
Global GHG Budget to Reach 1.5 Degrees Celsius and Switzerland's Share and Responsibility
Remaining Global Carbon Budget
The IPCC special report “Global warming of 1.5 degrees” (SR1.5) gives us an overview of the remaining carbon budget as of the year 2018 (IPCC 2018). However, important uncertainties can substantially affect the size of the carbon budget. For instance, the uncertainty of the climate-cooling effect of aerosols on temperature could reduce the carbon budget by up to 400GtCO2 or increase it by up to 200GtCO2. The budget could also be further reduced by up to 100GtCO2 in 2100 due to Earth-system feedbacks, such as carbon released by melting permafrost that is generally not included in climate models. These feedbacks are less important over the short-term, but their effects may be substantial later in the century (Zeke Hausfather 2018).
If our goal is to stay below global warming of 1.5 degrees Celsius with a 67% chance, the IPCC (IPCC 2018, 108) gives us a global remaining carbon budget of 420 Gt CO2 from the beginning of 2018 on. In 2018 and 2019 combined, the world has emitted around 80 GT CO2. This gives us a remaining carbon budget of about 420-80=340 Gt CO2 as of 2020. The IPCC (IPCC 2018, 108) recommends reducing the global carbon budget by 100 Gt to account for unprecedented earth system feedbacks. At the beginning of 2020 the remaining global carbon budget is thus at 240 Gt CO2. Given an annual global CO2 output of around 40 Gt, in 6 years of emitting at the current rate the global carbon budget to stay below 1.5 degrees with a 67% chance will be used up.
The IPCC proposes different emission pathways that would stretch the remaining global carbon budget until a "net-zero emissions" point is reached sometime after 2040. Some of these scenarios allow an overshoot above 1.5 degrees (reaching temperatures as high as 1.8 °C by mid-century). All scenarios assume that at the "net-zero emissions" point we continue emitting greenhouse gases while we also rely on negative emission technologies to counterbalance positive emissions. These negative emission technologies range from bioenergy, to carbon capture and storage, to afforestation. None of them are available today at scale.
By setting mid-century (around 2050) for carbon neutrality as a goal, as the IPCC does it, we would implicitly leave it up to future generations to develop huge CO2 net negative emissions capacities – the risks are thus enormous. Viewed in this light, leading climate scientists suggest that mitigation action should “proceed on the premise that they will not work at scale” (Anderson and Peters 2016, 183). In other words, we should consider a reliance on future net negative emission technologies as too risky and concentrate on not exceeding the remaining carbon budget. (Near-term implementation of negative emission technologies that are technically already developed should be pursued. See CAP Chapter on negative emissions).
To avoid the problem of mitigation deterrence - "the idea that promises of future carbon removal might act as an excuse for avoiding the need to cut emissions today" (D. McLaren 2020), we follow Duncan McLaren (leading scholar studying political and social implications of negative emission technologies) in his proposal for how to "navigate the mitigation deterrence challenge" (D. McLaren 2020):
- Keep plans for carbon removal separate from those for emissions reduction (see D. P. McLaren et al. 2019)
- Constrain and strictly limit offsetting with carbon removal
- Minimize the risks of greenwashing and fraud through monitoring, reporting and verification techniques, and - here we go beyond McLaren - introduce tough penalties for fraudulent accounting
So how much should Switzerland contribute to stay within the global remaining carbon budget? I.e. what is the remaining carbon budget for Switzerland?
Taking the consumption-based approach (imported and territorial emissions, including international aviation), the FSO has reported 116.2 mio t CO2eq for the year 2016, which roughly corresponds to 100 mio t CO2. Le Quéré et al. (2018) show higher numbers (Figure 9‑3) but for the sake of simplicity we can assume 100 mio t CO2 per year as our starting point to calculate the Swiss remaining carbon budget.
If we assume a remaining global carbon budget of 240 Gt as of 2020 and calculate the Swiss share based on the share of global population living in Switzerland, we get:
(240Gt / world population) * Swiss population = 0.265 Gt, or 265 mio t CO2.
With the current rate of emitting roughly 100 mio t CO2 per year, this budget will be gone in mid-2022.
Taking the territorial approach (also known as emissions under the Kyoto protocol, excluding international aviation), the Swiss carbon budget of 265 mio t CO2 would be gone mid-2026, assuming a current rate of emitting roughly 40 mio t CO2 per year.
Regardless which approach we use, it is obvious that we need to start reducing our emissions now, and at a significant and unprecedented rate, each year in this next decade. This radical challenge must not be evaded by simply further outsourcing our emissions abroad as it has been the case in the last decades (Figure 9‑3).
If we take the concept of a global carbon budget seriously and apply it to Switzerland (265 mio t CO2), the pathway towards zero emission by 2030 would have to look as the following graphs illustrate, assuming no negative emissions in Figure 9‑4 (territorial approach) and Figure 9‑5 (consumption-based approach), and assuming negative emissions up to 5 mio t CO2 p.a. in Figure 9‑6 (territorial approach) and Figure 9‑7 (consumption-based approach). As illustrated, with a relatively small compensation through negative emission technologies applied domestically these pathways would look slightly less radical, but radical, nonetheless.
Taking a Structural Approach to Analyze the Current Situation and Devise a Transformational Way Forward:
Dimitri Zenghelis (2015:176) summarized well the structural challenge ahead of us:
“Carbon is globally pervasive on a scale quite unlike other pollutants. Addressing it is therefore not a matter of marginalist economics in the neoclassical tradition. Eliminating carbon from capitalism is not about ﬁnding static equilibriums in markets corrected for minor failures. Because carbon is so central to capitalism it is a much larger task, involving a fundamental reshaping not just of individual technologies but of entire systems of production, distribution and consumption.”
We need to take a structural approach to address the root causes of the climate crisis and to devise an effective set of solutions. A structural approach highlights how anthropogenic climate change is driven by industrial production of goods (and associated services) and their mass consumption in a capitalist world economy.
Capitalism and its Relation to Climate Change
Julia Steinberger argues that “taking climate change seriously means bringing down fossil capitalism, with its inbuilt drivers of accumulation, domination, exploitation and destruction” (Steinberger, 2018).
Capitalism is an economic and political system that is driven by capital accumulation. It is based on a system of property relations that guarantee private ownership of the means of production in the hands of business owners and their shareholders. These businesses are primarily driven by the necessity to make profits in a competitive environment. In other words, capitalism is "a system of competitive accumulation" (Dale 2019). In such a system, GDP is not just another metric that could be simply replaced with a different one, for instance Sustainable Development Index, a Happiness Index, etc., (see Hickel 2020) while leaving political and economic structures unchanged (even though we plead for alternative indexes as a means to promote structural changes, see Policy 6). If these structures remain, policymakers would have to ignore new metrics and continue pursuing a growing GDP. The pursuit of economic growth is one of the most important policy goals of most governments around the world today (Schmelzer 2015; Mitchell 2011; Collins 2000). Switzerland is no exception. The state of the GDP is thus the expression of government success or failure. However, governments do not simply expand economies themselves. Rather, they ensure that market competition – the necessary condition for economic growth - is in place.
"[T]he relentless increase in global resource throughput and environmental despoliation is not principally the result of states aspiring to a metric – higher GDP – but of industrial and financial firms, driven by market competition to expand turnover, develop new products, and increase profits and interest."(Dale 2019).
Why is pursuit of economic growth such an important policy objective of governments? Without it, economic and political stability is at stake (Kallis 2017; Jackson 2016; Rosa, Dörre, and Lessenich 2016). Ensuring stability through economic growth is the upside of the "relentless increase in global resource throughput and environmental despoliation" (Dale 2019). It allows companies to "remain in business" and to pay its employees and shareholders. Businesses continue making money, employees are being paid, pensioners can count on their monthly pension, governments can refinance their debt, pay government employees, provide public services and maintain public infrastructure. Moreover, economic growth can counter capitalism’s tendencies to further inequality (Piketty 2014). Keeping inequality in check through economic growth contributes to economic and political stability.
The downside is that capital accumulation is based on what economists call social and environmental externalities. This describes costs that are not generated in the process of profit making but are outsourced on individuals and society at large (Kallis 2017). If these costs were internalized, profit margins would decrease substantially, if they would be generated at all. Thus, any attempt to fully internalize social or environmental externalities would likely put a company that operates in a capitalist environment out of business. Hence, rather than understanding externalities as outcomes of what economists call ‘market failure’, they should be understood as cost-shifting ‘successes’ (Kallis 2017).
Social externalities entail claiming a share of the value that is generated collectively in the production of goods and services as a profit for business owners and their shareholders (also called 'surplus value'), and relying on the unpaid reproductive labor of mostly women who through their full time labor of raising children (also called 'care work', or the 'care economy') ensure that the capitalist economy is supplied with a workforce, for free.
Environmental externalities entail environmental pollution or degradation that is an outcome of the production process (goods or services), e.g. GHG emissions, air/water/soil pollution, deforestation, etc.
Hence, before asking ourselves how we can internalize costs in capitalism – a typical approach in dealing with environmental problems such as GHG emissions - we first need to realize that externalities are a precondition for capitalism to function. That does not mean that these externalities cannot be reduced at all. A very simple and effective way to at least partially internalize social and environmental costs is to set and enforce effective policy measures, for instance a limit on GHG emissions, or a minimum wage. These policy goals work to a certain degree. If minimum wages or emissions limits are set too high, the competitiveness of the private sector begins to falter in a capitalist environment. In short, there are limits as to how much the private sector can afford to internalize social and environmental in a capitalist economic framework.
The effects of the inherent drive to outcompete each other in the quest for profit is to aggregate economic growth (M. Binswanger 2009). This inherent logic to pursue profits – through the externalization of social and environmental costs - in a competitive global economy has led to a correlation between economic growth (that reflects profits) and GHG emissions (that reflect environmental externalities) at a global scale (Kallis 2017; Haberl et al. 2020) as Figure 9‑8 and Figure 9‑9 illustrate.
Green Growth or Degrowth?
Leaving aside social externalities of profit making for now, a meaningful solution to the escalating environmental crisis could entail an absolute – not relative – decoupling of the GHG emission footprint of produced goods and services from the growing economy, in a short period of time (Haberl et al. 2020). This solution is usually called "green growth", that is, the dematerialization of economic growth. Green growth suggests that we can continue growing the production of goods and services in a capitalist system while reducing environmental externalities of production. As discussed above, there are limits to this approach – due to the need to remain competitive and to generate profits, and due to the fact that even a service economy cannot be fully dematerialized (Kallis 2017).
An alternative approach to green growth as a solution to the environmental crisis is the absolute reduction of the quantity of produced and consumed goods and services in a given period of time (Haberl et al. 2020). This is usually called a degrowth economy, whereby degrowth entails the dematerialization of the economy through controlled shrinking of economic activities that require material inputs, such as fossil fuels, cement, metals and minerals, chemicals, rare earth elements, etc. Degrowth is impossible in capitalism as we know it, since capitalism is built on the pursuit of aggregate economic growth.
Regardless of whether one favors a green or a de-growth approach, an important argument against the greening of a growing economy lies in the risk of creating a new cycle of extractivist accumulation of minerals, metals and rare earth elements for a transition to 100% renewable energy and electric vehicles. A green but growing economy will be based on growing energy demands which would need to be met with unprecedented mining activities particularly in the global South. Under the present conditions, this extractivist cycle of capital accumulation will be based on the externalization of environmental costs (soil, water, air pollution) and social costs (poor labor and health standards, low wages).
The section above about the global GHG Budget to reach 1.5. degrees Celsius and the Switzerland’s share and responsibility has illustrated that in a BAU scenario, the remaining carbon budget for Switzerland will be used up in the next few years, before 2030. How can the Swiss economy slow down this process and subsist on its budget until it is transformed into a net-zero emissions economy in 2030?
As Figure 9‑10 shows, Swiss economic growth (expressed through the indicator GDP) has been substantial, while the Swiss CO2 emission footprint – expressed in consumption-based emissions – actually outstripped GDP growth. In other words, instead of decoupling economic growth from the GHG emission footprint ("green growth"), we see here a development that even outstrips recoupling. Consumption-based GHG emissions have grown faster than economic growth. In sum, we have seen neither green growth nor degrowth so far in Switzerland.
So, What Needs to be Done to Achieve Net 0 Emissions by 2030?
Kallis (2017) contends that radical dematerialization - the goal of the CAP - is not compatible with economic growth. In a recent state-of-the-art review, Hickel and Kallis (2019) argue that the only way to remain within 1.5 degrees Celsius warming above pre-industrial levels globally is through controlled degrowth of the global economy. They also acknowledge that in some individual country cases it has been possible to reduce GHG emissions in absolute terms without a shrinking economy (green growth). However, this has not been the case for the Swiss economy if we follow the consumption-based principle which is more suitable for the Swiss economy given the large disparity between consumption and territorial emissions. Hence, Hickel and Kallis' conclusion also applies to Switzerland: In the little time that we have to achieve net 0 GHG emissions by 2030 in order to remain within 1.5 degrees Celsius, the Swiss material economy (as measured with the GDP metric) would have to shrink in absolute terms so that the remaining carbon budget is not used up before 2030.
The emphasis on time and economic (de)growth is crucial here, as emphasized by Hickel and Kallis (2020, 12): "...while absolute decoupling of GDP from emissions is possible and is already happening in some regions, it is unlikely to happen fast enough to respect the carbon budgets for 1.5°C and 2°C against a background of continued economic growth" and “emissions reductions in line with 1.5°C are not empirically feasible except in a de-growth scenario. “
Similarly, Parrique et al (2019, 3) conclude in a recent report that “not only is there no empirical evidence supporting the existence of a decoupling of economic growth from environmental pressures on anywhere near the scale needed to deal with environmental breakdown, but also, and perhaps more importantly, such decoupling appears unlikely to happen in the future.”
Finally, Haberl et al (2020, 2) have conducted the most recent and systematic review of the available scientific literature and conclude that “large rapid absolute reductions of resource use and GHG emissions cannot be achieved through observed decoupling rates, hence decoupling needs to be complemented by sufficiency-oriented strategies and strict enforcement of absolute reduction targets”.
How Can Economic Activities Be Dematerialized?
There are two principle ways to dematerialize economic activities: by relying on markets (that can be regulated by the state and influenced by consumer behavior) or by imposing bans on certain goods altogether (through new environmental standards or prohibitive taxation, e.g. the introduction of catalytic converters and lead-free petrol for automobiles in the 1970s, and the Montreal Protocol on Substances that Deplete the Ozone Layer in 1987). These two approaches are not mutually exclusive and should be combined. The challenge is to find the right mix of policies that regulate, tax, ban, or incentivize.
While in mainstream economic theory markets offer the best way to govern economic activities towards environmental goals, in practice markets can only play a minor role in dematerializing economic activities given the little time we have and the huge challenge ahead to get to net 0 by 2030. Moreover, markets that are designed to reduce emissions through tradable permits (such as the ETS) perform poorly in practice. This poor performance is due to a lack of interest by the state to undermine the competitiveness and profits of firms whose business models are fossil-fuel based. As mentioned above, the main policy objective of government is to foster economic growth, not to stall it.
Thus, effective regulation of markets, environmental standard setting, taxation or bans all require a political economic structure that does not necessitate the pursuit of economic growth and is not dominated by private sector interests. Unless there are structural changes, shareholder-owned businesses will stand in the way of effective command and control interventions by the state, be it through market regulation or other instruments.
Another important challenge to effective dematerialization policies are often labor unions that will not allow the state to intervene in a way that jobs are at risk as long as healthcare, social welfare and pensions are coupled with life-long and mass employment. In the current capitalist framework, labor needs and supports aggregate economic growth so that new jobs can be created when existent jobs are outsourced overseas or to the machines. Thus, in the capitalist economy capital and labor are both interested in economic growth and will fight efforts to dematerialize the economy if this means that certain goods and services have to go.
Ultimately, the state itself is not interested in intervening in a way that will cause businesses to run out of business or lose their competitiveness in the global market. This would lead to economic recession, growing unemployment rates and eventually an economic and/or debt crisis and collapse. Not only would the economic system be destabilized, rising unemployment and poverty rates would also destabilize the political system, inviting authoritarian populism, xenophobia, and even fascism. Thus, in the capitalist economy (regardless if it is Keynesian or neoliberal), capital, labor and the state are all interested in economic growth to ensure a stable economic and political system. This is the post-WWII compromise of liberal democracies (Schmelzer 2015). This compromise transformed political-distributional conflicts between capital and labor into an apolitical win-win consensus - more growth is better for everyone.
In conclusion, the main challenge ahead is to dematerialize the economy by decoupling economic activities from the present and future welfare of people so as to stop growing our material throughput and consume less goods (most of which we do not need for our well-being), all without leading to an economic collapse and political shift to the far-right. A set of regulations, including bans on certain goods, will be necessary to eliminate undesired economic activities at a large scale and quickly. Yet there are important political economic structures that would need to be overcome. Most importantly, an alternative is needed to offer people material well-being without the necessity to work in industries that fuel the climate crisis but fund state welfare and retirement programs through their productive activities. Only a labor that is liberated from the need to participate in the generation of perpetual economic growth can act as an agent of change towards a radical transformation of the economy to meet the 1.5 °C climate target.
The Democracy Challenge
Any radical change or reform must thus be built on a broad social basis and popular support. The key question is how to raise this support by people who will have to be convinced to forego large parts of material consumption in exchange for other - less fossil fuel intensive - social references of good life and well-being. The transition towards a sustainable well-being-oriented economy demands from practically everyone in Switzerland to give up some of their consumption-oriented lifestyles. However, the challenge of radical decarbonization is in ensuring that the burden of the structural changes is evenly distributed. Economically wealthiest and most resilient residents will carry the biggest weight. Urban centers will have to move faster than rural areas.
This is easier said than done. The specter of revolt, resistance and authoritarianism looms large whenever radical societal changes are demanded. Social movements in France, Chile, Brazil and the political shift to the right across the world show the limits and consequences of ill-conceived economic and political reforms that predominantly target the working classes and the working poor.
The CAP must thus be built on more, not less, democracy. While capitalism has historically contributed to the climate crisis, democracy - if strengthened - can be an antidote to it. In short, we must “reclaim our democracies, and make them fit for purpose for the immediate and immense challenge we face” (Steinberger 2018).
An important challenge lies in overcoming the limits of a democratic framework that is based on elections and parliamentary representation. In such an arrangement, the influence of each individual is insignificant, whereas those who wield economic, social and cultural resources, have control over media and so on, are in a very strong position. Not only do they have far-reaching possibilities to manipulate public opinion (i.e. damaging the credibility of climate scientists), with their economic power they can also blackmail societies by threatening to move jobs and capital out of the country. They often also have the means to exclude critical journalists, scientists and professionals from influential positions in media, government and administration, universities or armies. Finally, when societal conflicts escalate, state forces and agencies such as the intelligence agencies, police or military are mobilized to protect these very political and economic interests which stand in the way of radical and equitable decarbonization.
What we need for radical decarbonization is democracy beyond these limitations. The idea of a transformational democracy will be key to create the necessary support for the structural changes required. An important challenge will thus be to adopt the most adapted and effective scale for decision-making processes for different measures needed (see section Boosting Democracy).
Monetary and Fiscal Considerations
Carbon Pricing Insufficient
In economics, the focus of climate policy has been almost exclusively on pricing mechanisms for a long time. Many actors in society and NGOs have been lured into this thinking to a certain extent, however, there is now widespread agreement that a net-zero carbon economy requires not just some microeconomics, but a new political economy (Aronoff et al. 2020) - massive investment, e.g. in public transport to enable us to avoid high carbon prices (Stiglitz 2019). This is even more important for the ambitious decarbonization the CAP wants to achieve. While the crucial role of fiscal policies is not frequently contested (even though there is strong disagreement about the type of fiscal policies), matters have been a bit more complicated regarding monetary policies. Most central banks have mandates that require them to guarantee price stability above all, sometimes coupled with targeting employment or financial stability. However, thanks to a shift in the conversation on climate change, the role of monetary policy and its coordination with fiscal policy is being scrutinized increasingly.
What Fiscal Policy Measures are Required?
Within the spectrum of people subscribing to the notion that pricing alone will not solve our carbon problem, we can broadly identify three approaches. One is arguing in favor of financing investment mainly through private finance and, should the public sector play a role, through partial use of carbon levies’ revenues. This is the approach enshrined in the buildings program in Swiss climate policy. The second argues for a stronger role of more traditional tax policy instruments, namely personal income taxation, wealth taxation, capital or business taxation. A third approach emphasizes that the sheer extent of investment required makes large-scale borrowing necessary and argues for a comprehensive use of fiscal policy instruments, including coordination with monetary policy (see Pettifor 2019).
In our opinion, the first two approaches both have serious shortcomings: To increase public support for carbon pricing policies, per-capita redistribution can ensure that low- and middle-income households are made better off on average. However, as the carbon price is mainly levied on heating fuels in Switzerland, removing funds from the redistributive mechanisms and moving them into a “Climate Fund” or a similar instrument will disproportionately hurt poorer households. Financing green investment through these kinds of taxes is thus politically risky and may cause a public backlash similar to the “Gilets Jaunes” protests in France.
While traditional tax policies certainly need to play a role in the financing of a rapid decarbonization, the kind of taxes matters. Federal income taxes are significantly more progressive than their equivalents on the cantonal level. This may be beneficial in ensuring broad popular support. Furthermore, imposing wealth, capital or inheritance taxes at the federal level reduces climate policy freeriding by individual cantons. However, even if we were to raise taxes from all those sources, time pressure and the steep decarbonization path indicate that these measures may neither be sufficiently large, nor happen early enough. It is key that we do not tighten public expenditures for climate mitigation because measures to generate tax revenues fall short.
Therefore, while our proposals include measures to tax the historically most carbon-intensive lifestyles (people with large incomes and large fortunes) through ordinary taxation, we do not make public investment and expenditure decisions conditional on these measures being implemented. In contrast, we argue that the overhaul of our energy, production and transport systems likely requires credit-financed investment. Many people frequently draw from the American experience during the New Deal area to describe the level of effort necessary. Under Franklin D. Roosevelt, government spending growth averaged 8% per year from 1933 to 1939 (Pettifor 2019). Even though Switzerland is currently running large budget surpluses, our ability to decarbonize may depend on either our willingness to run government budget deficits or to set up new institutions such as the public climate bank. This likely requires new forms of coordination between monetary and fiscal authorities.
Monetary Policy and Climate Change
The Swiss National Bank has been a laggard rather than a leader on fossil fuel divestment, while e.g. the Swedish Riksbank has already divested from fossil fuels. A new study by Bolton et al. (2020) shows how climate change could potentially cause serious shocks in the financial markets. Both physical shocks (because of climate damages) and transition shocks (because of abrupt policy changes to avert climate change) can be the cause. The shocks then are likely to transmit to the real economy and seriously constrain the ability of central banks to fulfill their mandate, even if this only consists of price stability (Bolton et al. 2020):
- Supply shocks could potentially lead to stagflation-type effects, where monetary authorities would lose their ability to conduct effective policy
- Since climate heating happens at a global scale, national authorities may not be able to appropriately react to imported supply shocks.
- It is not sure whether central banks would ever be able to hedge against coming fat-tail climate risks (so-called “green swans”)
The Swiss National Bank seems to be unaware about how its ability to conduct monetary policy would change under such circumstances. Possible scenarios could involve supply shocks in other countries (e.g. increases in food or commodity prices because of climate related droughts or hazards), financial shocks (a mortgage crisis because of a sudden decline in US coastal house prices) or any other climate related scenario. If the SNB’s awareness of the problem does not change, the law has to be adjusted to explicitly mandate the SNB to include these risks.
In terms of broader monetary policy maneuvering room, Switzerland is in a comfortable situation regarding its monetary policy. It is not on a de facto “gold standard” as the countries in the Eurozone, who are not supported by a lender of last resort and thus need to rely on globalized financial markets for capital (Pettifor 2019). This leaves the opportunity for significant monetary interventions in favor of climate change mitigation. While we acknowledge that all such interventions come with their own risks, some of them have been widely applied already.
Existing Climate-Related Policy Measures and their Shortcoming
In Switzerland, there is already a CO2 law which comprises policies to curb carbon emissions. These include measures to price emissions (e.g. levy on heating fuels, emissions trading system, taxes on motor fuel which can also be considered CO2 taxes to some extent). Besides this strong focus on pricing, Swiss climate policy uses regulations (e.g. vehicle fuel standards) and subsidies for renewable energy construction financed by a levy on electric power) and the buildings program (financed by part of the CO2 levy on heating fuels).
In addition to the official government policy in the CO2 law, there are mainly four comprehensive decarbonization plans. However, like the official federal policy, none of these match the ambitions of the 2030 net zero target. They also stay firmly in the framework of the current policy. The four documents are the following:
- Climate Master Plan (Climate Alliance)
- Cool Down 2040 Strategy (Green Liberal Party)
- Climate Marshall Plan (Socialist Party)
- Climate Plan (Green Party)
This section will briefly outline the three of the four proposals (the Climate Plan by the Green Party has not been assessed as it has been published after the creation of this analysis) and point out significant shortcomings in their approaches in contrast to the structural approach we urge for in this chapter.
Climate Master Plan (Climate Alliance)
The Climate alliance is an umbrella organization of Swiss environmental and development NGOs, churches and labor unions. The report (Climate Alliance Switzerland 2016a) is the most detailed decarbonization strategy and is concerned with the following research question: “How far can domestic greenhouse gas emissions be reduced by 2030, taking into account technical, ecological and economic aspects, and what (political) measures can be taken to create the framework for the necessary transformation?”
It concludes that the proposed measures could reduce territorial GHG emissions by 60% until 2030. It is striking that even the report itself recognizes that the measures were insufficient to reach the target of 2 °C global warming already in 2016, and the target has to be considered a complete failure from any global equity perspective. For global warming below 2 °C, a reduction of at least 60% in territorial emissions would be necessary until 2030, globally. From an «Equal Cumulative per Capita Emissions» perspective, net territorial emissions in Switzerland would have to be reduced to below zero before 2040. Under an equity principles method (Bretschger 2013), territorial emissions would have to be reduced by 75% until 2030.
The proposed measures are hesitant and remain in a green growth framework (see section Taking a Structural Approach to Analyze the Current Situation and Devise a Transformational Way Forward). For road transport emissions e.g., the suggested reduction mainly stems from more efficient internal combustion engine cars and more electric vehicles. Broader measures such as an increase in vehicle occupancy rates, a shift in the modal split towards public transport or a reduction in passenger kilometers travelled through technological measures, home office etc. play no or only a minor role.
In the buildings sector, the document suggests tightening construction guidelines, increase the CO2 levy for heating fuels to CHF 240 and double the size of the buildings program from CHF 200 mio to CHF 400 mio. Renewable heating systems should become mandatory for new houses if it is economically viable. Depending on the energy efficiency category GEAK/CECB/CECE, homeowners need to construct a fund to make energy efficiency investments. The study further suggests efficiency contracting and efficiency funds to secure further financial means to make buildings more energy efficient. While the requirement for a building related energy investment fund is likely too slow to curb GHG emissions from heating at the required pace, mandating renewable housing systems bear the potential for social conflict if not supported by measures such as a climate bank.
In an additional report, (Climate Alliance Switzerland 2016b) also lays out measures to reduce imported emissions as well as the effect of Swiss investments on the climate. The report suggests to include grey emissions into efficiency standards, to introduce carbon levies on imported products with high emissions and do more research, but also talks hesitantly about the need to reduce material consumption (through “cultural change” toward sharing and unspecified changes in product liability and property rights, “circular economy”). A key point where the report hints at (without providing a detailed solution) is regulations in trade agreements. The measures regarding the financial sector include reduction targets for institutional investors, a CO2 levy on capital income from non-renewable resources on the swiss capital market. Furthermore, the law should be changed such that asset managers are not only mandated to grant security, profitability and liquidity, but also climate compatibility.
Cool Down 2040 (Green Liberal Party)
The Green Liberal Party proposes a net zero target of domestic emissions by 2040. Its plan (Green Liberal Party Switzerland 2019) includes measures to price emissions (taxes and trading systems), regulatory changes and technical measures (smart grid, smart traffic control etc.). While the net zero target of 2040 deserves some appreciation for being the most ambitious one of the three targets, it still completely lacks the ambition required from a perspective of climate justice and global equity.
One important upside of the proposal is its inclusion of measures to promote rail, bike and pedestrian traffic as an alternative to road travel, as well as measures to reduce distances travelled by cars and lorries (f.ex. die Alpentransitbörse/ La bourse du transit alpin/ La borsa dei transiti alpine or mobility pricing). This would be an important step to reduce CO2 emissions and material consumption while increasing quality of life. The strategy thereby breaks out of a pure green growth logic, as it implicitly recognizes finite resources such as public space and infrastructure. The plan also includes measures to tackle the destructive role of financial markets, namely transparency about climate risks in financial products. Thereby, one of the most important blind spots of Swiss climate policy is brought into discussion. Furthermore, the shift to renewable construction materials such as wood, as well as stricter spatial planning rules clearly reflect parts of the structural approach to climate policy we are promoting.
The plan also wants to increase the share of carbon emissions covered by carbon prices. It lays out a detailed price trajectory for motor fuels (beginning at CHF 110, increasing by CHF 10 every year). In the beginning, GLP wants to use part of the revenue of the CO2 tax on fuels (up to 50%) instead of highly progressive federal income taxes to finance green investment. As a study by Filippini and Heimsch (2015) shows, fossil fuel price increases will affect Swiss people heterogeneously, depending on where they live. People in rural areas have less opportunities to change their behavior to avoid these taxes. Hence, they will be forced to pay a larger share of the green transition fund. In an Interview with SRF, former GLP president Martin Bäumle was once quoted saying that he opposes climate policies where “the very rich and the entrepreneurs will pay for the whole exercise again. The majority of the poorer people pay no federal tax at all. You should not mix environmental policy too much with social policy” (Washington 2019). In contrast, researchers such as Filippini warn of a referendum loss if rural people are ignored. He calls for a 100% dividend redistribution to the population, differentiated between urban and rural areas.
Climate Marshall Plan (Socialist Party)
The Socialist Party’s “Climate Marshall Plan” (Socialist Party Switzerland 2010) proposes net zero territorial greenhouse gas emissions by 2050 at the latest. This goal falls short of all climate justice requirements and is completely insufficient also in comparison to the climate strike target, net zero by 2030. Despite its insufficient consideration for global climate justice, the Socialist Party proposal emphasizes a just transition within Switzerland. It acknowledges the need for additional public investment expenditures and subsidies. In particular, the massive reinforcement of the buildings program should be financed by highly progressive federal income taxation and value added taxes through the federal budget. It also emphasizes the need for tenant protection and introduces an investment program of 300 Mio. p.a., where only landlords who guarantee stable rental prices for the following 10 years are eligible.
Overall, the plan remains firmly in a green growth framework. At the forefront is an investment offensive in solar energy infrastructure (CHF 480 million p.a.), charging infrastructure (CHF 100 million p.a.) and vehicle fleet electrification (CHF 200 million plus investments through climate bonds). The only policy where it breaks out from a green growth narrative is the hesitant attempt to reduce or at least freeze traffic: Car traffic is tackled by blocking the construction of new highways; to reduce air traffic, the “Marshall Plan” wants to introduce a moratorium to increases of airport capacity and mandate CO2 warnings on flight travel ads. To substitute flights, an expansion of rail connections to Europe is emphasized. It is notable that while an increase in low carbon public transport is mentioned, the plan does not suggest any changes in the overall composition of inland traffic towards more walking, biking and trains.
In stark contrast to the “cool down 2040” strategy, the weakness of the Climate Marshall Plan is its vagueness regarding CO2 levies. While a levy in the transport sector is mentioned several times, the authors refrain from being specific about the level of the levy. The only indication they give is that it “should be rolled out gradually” and “only be increased if targets are not met” While the suggested 100% equal per-capita redistribution of the revenues is more socially just than other uses, the Climate Marshall Plan does not propose any measure for the compensation of those hardest hit by the policy either.
Learning from Corona
The Role of Science in Times of Crisis
Epidemiologists and virologists are the most important advisers to governments all over the world as the corona pandemic spreads. It almost seems as if science is finally listened to, being used to govern for the good of humanity. No doubt, the corona pandemic requires state-of-the-art scientific knowledge to be defeated. Some Asian countries have even shown that scientific knowledge coupled with high-tech digital technology can be enough to track and contain the spread of the virus with only little disruptions to economic and political life.
Can we draw an analogy from how science is harnessed for policy with regard to the climate crisis?
To an extent yes, but there are also important differences. Certainly, both are problems that affect all of humanity and both do not know borders. Just like epidemiology and virology are fundamental to understanding corona, climate science has been fundamental to understanding and anticipating the climate crisis. Climate models have consistently shown to produce accurate projections since the 1970s (Hausfather et al. 2020). However, unlike the case of the coronavirus, climate science coupled with state-of-the-art technology alone is not enough to guide the world to a sustainable future. Effective climate change mitigation requires first and foremost political economical changes, not just technological fixes. We also cannot simply let climate scientists and environmental engineers advise our governments and hope that the science-technology-policy trio will do the job.
What Can we Learn from Corona?
The necessary structural changes that are hinted at in the section 1.3 tend to be understood by many as utopian – not realistic – given the political realities, etc. In short, so-called “capitalist realism” - “the widespread sense that not only is capitalism the only viable political and economic system, but also that it is now impossible even to imagine a coherent alternative to it” (Fisher 2009, 2) - is in the way of radical climate action. This belief has been entirely overturned only in the matter of days across the Global North in the wake of the nascent Corona pandemic. Entire nation states have suspended social, economic, and political “business-as-usual” to contain the spread of the virus (Brand and Högelsberger 2020). Everything is suddenly possible what was always believed to be impossible, from the suspension of capitalist markets, to the nationalization of entire industries (e.g. Spanish private hospitals), to the transition to a planned economy to ensure the supply of critical goods, to de facto unconditional basic income payments. Corona has already taught us that when deemed socially necessary, state and society can change everything in the matter of days. The list of things we allegedly cannot have but actually can is endless and keeps growing day by day. Even more important is that the pandemic has also shown how GHG emissions can be reduced effectively in a matter of weeks by - temporarily for now - retiring entire infrastructures, production lines, and consumption practices. These reductions show that another world is possible, where GHG emissions are reduced without the reliance on markets or emission offsetting.
When the pandemic is over, the world will face several possible futures (Mair 2020). We could go back to pre-Corona capitalist business-as-usual, or we could stay within a post-capitalist economy which will likely have significant positive effects on climate mitigation and a functioning social system that was ensured through a reconfigured state-society relationship that embraced principles of solidarity and decoupled social well-being from capitalist markets and logics, all in order to contain the pandemic. However, it is to be expected that Corona will usher in an unprecedented global economic recession with massive amounts of public debt, unemployment, and worthless pension funds.
Rather than “wasting another crisis” (Aronoff et al. 2020), or missing a “historic opportunity”, as IEA head Fatih Birol described it , this future post-Corona moment could be harnessed to maintain a post-capitalist society and economy that keeps a functioning social system, resets all economic debt, further strengthens the hopefully well-established care economy, builds on a solid base of publicly funded green jobs (Aronoff et al. 2020) (see Policy 9.1 & 9.2) and does not return to capitalist markets so as to keep GHG emissions in check (Brand and Högelsberger 2020).
Moreover, a post-corona era may require recurring periods of social distancing and repeated rounds of controlled contraction of economic activities to keep the virus in check. This situation offers a possibility to bring together policies of climate mitigation and policies of pandemic mitigation. Social scientist Tilman Santarius and ecological economist Steffen Lange (2020) formulated it as follows: In terms of economic policy, the pandemic requires a move beyond neoclassical and Keynesian thinking in order to cope with the socioeconomic consequences of the crisis. If political measures to restrict social contacts become necessary over a longer period of time, a transformation of the existing economy, which is dependent on economic cycles and growth, to a sustainable and crisis-resistant economy, a resilient economy, must be initiated.
Green Investment in Good Jobs
The rapid decarbonization of Switzerland will involve a radical transformation of the economic system, at an unprecedented scale and speed. The policies presented in the CAP, if implemented as a block, will promote a change in production methods (toward carbon efficiency), a shift in consumption patterns (from carbon intensive to low-carbon products and services), and a decrease of overall material consumption (hence also less production of goods). Some economic sectors will shrink or disappear, while others will grow, and possibly the overall economic activity will decrease (measured as GDP).
In the long term, job losses in polluting sectors will be replaced by new jobs with shorter working times and lower carbon footprints. However, in the short term, the balance between job losses and job creation might be negative, new jobs might be located in different regions and require different training compared to the current fossil carbon-based economy. If left uncontrolled, these temporary imbalances can have deep social consequences such as an increase in unemployment, poverty, and social unrest. This needs to be avoided, and the state has the responsibility to guarantee the means to have a decent life to everybody.
Policy 9.1: Public Program for Green Jobs (ProGJ)
Policy 9.2: Nationwide Network of Climate Workshops
The climate emergency demands for “rapid, far-reaching and unprecedented changes in all aspects of society” (IPCC 2018). Accepting the scientific consensus also means to accept that small, individual changes will just not make it, but a structural redefinition of our economic system is inevitable if we truly want to limit climate change. We therefore need to envision a new economic model based on the reassurance that our labor is able to generate communal welfare without the necessity of ever-expanding material throughput. At the core of any climate policy adhering to a just transition must lie a plan to redistribute the wealth and fruits of societal production and reproduction equitably: a social economy.
This involves a shift of economic reason away from profit creation towards social welfare and community wealth. This also means changing the way we rationalize economic growth, instead of focusing on GDP a Genuine Progress Indicator needs to account for sustainable human and environmental well-being (The Green New Deal for Europe 2019, see more in policy 9.6). A comprehensive change in production and consumption schemes must be centered on green jobs providing a better living and caring for community goods. At the same time, shifting production away from carbon intensive to low-carbon jobs achieves more than just CO2 reductions - care and education provide necessary means for community development, allow for stronger societal bonds and must be thought more broadly. Community care involves jobs in sports, play, culture, ecosystem repair, kindergartens and public leisure, to name just a few. Providing a job guarantee and collectivizing reproductive work can contribute to close gender imbalances and is effectively enhancing quality of life. At the same time this incentivizes more sustainable living habits as it opens up quality time through a general reduction in overall working hours with full wage compensation.
A Green Transition is a Just Transition.
Decarbonizing our economy means moving from profit-oriented towards communal welfare- oriented modes of production. Our goal is to build an economy which prioritizes not material growth as the sole denominator for societal development, but for an economy in which the wellbeing of people and our environment is pivotal in the question of how we organize our societies. The past decades have been predominantly focused on a radical privatization of public services, including healthcare, education, housing and pensions. However, having the climate crises in mind we will have to relearn public participation throughout our economic organization. This means to enhance workers’ rights not only in the way labor is accounted for, but also in what ways we are using our collective ability to work and what we are producing. A just transition does not only mean to provide green jobs, it also means to provide meaningful jobs.
Policy 9.3: Working Time Reduction (WTR)
Policy 9.4: Strengthening the Care Economy
Policy 9.5: Foundations and Cooperatives Replace Corporations
Policy 9.6: Replacement of GDP by Sustainable Development Index (SDI)
What we need is not so much a concept of how democracy ideally would work (something we possibly will never be sure about). Right now, it is more about how to democratically launch successful transformational processes of economic, infrastructural and social systems. We therefore call such a democracy transformational. A transformational democracy can be conceived as a society that learns quickly.
We have to realize that the current political institutions will not do the work on their own. They are far too dependent on the driving forces and power structures of capitalism. This transformation of democracy must occur in every part of life, needs to come from a grassroots level and be inspired by decentral organization and democratic experimentation. of social movements.
Transformational democracy must strengthen the following six development trajectories:
- A key element is the democratic engagement of people in social movements, NGOs, at their working place, in their neighborhoods or professional milieus. This engagement must be encouraged, and it must be promising by being effective, fruitful, and by granting strong personal experience. Today, such an engagement is often very limited in its outcome, and often highly frustrating. This must dramatically change. We need to put power to the people. This means also that engaged people get offered both time and material support for their engagement
- Economic decision-making must be democratized. This can be achieved on a great variety of levels: goods and services should only be permitted if they harm the environment as little as possible; goods and services should be should no longer be used for the maximization of profit; societies need strong economic actors who are not bound to profit-making; private enterprises must be socialized; any information of public interest must be publicly accessible; work and especially care-work must be upgraded and revaluated, and so on.
- Collaboration must replace competition as the driving force of development. We must perceive our social and economic activities as part of commons. For instance, patents should therefore generally be open source.
- Transformational Democracy must be capable of speeding up both decision-making and implementation of everything capable to reduce carbon emissions.
- The transformation processes need a clear orientation: We want to assure basic conditions for a good life to everyone on this planet - in a sustainable economic and social framework.
- Finally, the exorbitant amounts of financial wealth accumulated in neoliberal capitalism create a tremendous space of speculation on financial markets – a speculation constantly threatening economic and social stability. Furthermore, these assets were built on unsustainable and extractive capitalism. Redistributing these assets “back” into society is not just a question of justice, but an indispensable task for assuring the material bases for democracy.
The following paragraphs describe concrete policies for strengthening democracy and making it a transformational one.
Policy 9.7: Financing the Initial Phase of a World Climate Forum
Policy 9.8: New Concept of Ownership
Policy 9.9: Climate-Protection Tax on Large Assets and the Establishment of Capital Controls
Policy 9.10: Abolition of Lump-Sum Taxation
Policy 9.11: Climate Delegate of the Federal Council and Monitoring the Progress in Climate Protection Policies
Policy 9.12: Democratic Rights for all Residents of Switzerland
Policy 9.13: Democratic Rights for Everyone Aged 14 and Over
- Aronoff, Kate. 2020. “Green Jobs Are the Answer to the Coronavirus Recession.” New Republic. 2020. https://newrepublic.com/article/156962/green-jobs-answer-coronavirus-recession.
- Hickel, Jason. 2020. “The Sustainable Development Index: Measuring the Ecological Efficiency of Human Development in the Anthropocene.” Ecological Economics 167: 106331. https://doi.org/https://doi.org/10.1016/j.ecolecon.2019.05.011.
- Mitchell, Timothy. 2011. Carbon Democracy, Political Power in the Age of Oil. Verso.
- Chitnis, Mona, Steve Sorrell, Angela Druckman, Steven K. Firth, and Tim Jackson. 2014. “Who Rebounds Most? Estimating Direct and Indirect Rebound Effects for Different UK Socioeconomic Groups.” Ecological Economics 106 (October): 12–32. https://doi.org/10.1016/j.ecolecon.2014.07.003.
- McLaren, Duncan P, David P Tyfield, Rebecca Willis, Bronislaw Szerszynski, and Nils O Markusson. 2019. “Beyond ‘Net-Zero’: A Case for Separate Targets for Emissions Reduction and Negative Emissions .” Frontiers in Climate . https://www.frontiersin.org/article/10.3389/fclim.2019.00004.
- Bretschger, Lucas. 2013. “Climate Policy and Equity Principles: Fair Burden Sharing in a Dynamic World.” Environment and Development Economics 18 (5): 517–36. https://doi.org/10.1017/S1355770X13000284.
- Hausfather, Zeke, Henri F Drake, Tristan Abbott, and Gavin A Schmidt. 2020. “Evaluating the Performance of Past Climate Model Projections.” Geophysical Research Letters 47 (1): e2019GL085378. https://doi.org/10.1029/2019GL085378.
- Jackson, Tim. 2016. Prosperity without Growth, Foundations for the Economy of Tomorrow. 2nd ed. Routledge.
- Spiegelaere, Stan De, and Agnieszka Piasna. 2017. The Why and How of Working Time Reduction. Brussels: European Trade Institute. https://www.etui.org/sites/default/files/2020-07/The why and how of working time reduction-2017-WEB-2.pdf.
- Táíwò, Olúfẹ́mi O. 2019. “How the Green New Deal Can Avoid Climate Colonialism.” Pacific Standard. February 25, 2019. https://psmag.com/social-justice/how-the-gnd-can-avoid-climate-colonialism.
- FSO. 2020. “7.9 Billion Hours Worked in 2019 - Swiss Labour Force Survey and Its Derivative Statistics: Hours Worked in 2019 | Press Release | Federal Statistical Office.” https://www.bfs.admin.ch/bfs/en/home/statistics/work-income/employment-working-hours/working-time/normal-hours-work-statistics-volume-work.assetdetail.12667121.html.
- Binswanger, Mathias. 2019. Der Wachstumszwang – Warum Die Volkswirtschaft Immer Weiter Wachsen Muss, Selbst Wenn Wir Genug Haben. Weinheim: Wiley Verlag.
- Aronoff, Kate, Alyssa Battistoni, Daniel Aldana Cohen, and Thea Riofrancos. 2019. A Planet to Win, Why We Need a Green New Deal. Verso.
- Kallis, Giorgos. 2013. “Societal Metabolism, Working Hours and Degrowth: A Comment on Sorman and Giampietro.” Journal of Cleaner Production 38 (January): 94–98. https://doi.org/10.1016/j.jclepro.2012.06.015.
- Climate Alliance Switzerland. 2016. “Klima-Masterplan Schweiz: Umsetzung Des Paris Abkommen Teilbericht Zur Reduktion von Treibhausgasen Und Auswir-Kungen Des Klimawandels Im Ausland.” www.klima-allianz.ch.
- Frischknecht, Rolf, Carsten Nathani, Martina Alig, Philippe Stolz, Laura Tschümperlin, and Pino Hellmüller. 2019. “Environmental Footprints of Switzerland, Developments from 1996 to 2015.” Bern. https://www.bafu.admin.ch/dam/bafu/en/dokumente/wirtschaft-konsum/uz-umwelt-zustand/fussabdruecke-kurzfassung.pdf.download.pdf/en_BAFU_UZ-1811_Footprint_Zusammenfassung.pdf.
- Green, Matthew. 2020. “World Has ‘historic’ Opportunity for Green Tech Boost: IEA Head.” Reuters. April 28, 2020. https://news.trust.org/item/20200428152651-2zh2k.
- Hickel, Jason, and Giorgos Kallis. 2020. “Is Green Growth Possible?” New Political Economy 25 (4): 469–86. https://doi.org/10.1080/13563467.2019.1598964.
- Dale, Gareth. 2019. “Economic Growth: A Short History.” Ecologist. 2019. https://theecologist.org/2019/jun/18/economic-growth-short-history.
- FDFA. 2020. “Taxation.” April 16, 2020. https://www.eda.admin.ch/aboutswitzerland/en/home/wirtschaft/uebersicht/steuerwesen.html.
- McLaren, Duncan. 2020. “Carbon Removal: The Dangers of Mitigation Deterrence.” C2G. March 17, 2020. https://www.c2g2.net/carbon-removal-the-dangers-of-mitigation-deterrence/.
- Meier, Beat, Martin Meyer, Christian Vogler, Roman Bolliger, and Reto Dettli. 2000. “Massnahmenkatalog Klimapolitik 2030 Für Eine Klimaverträgliche Schweiz.” Zurich. www.econcept.ch.
- Green Liberal Party Switzerland. 2019. “Cool down 2040.” https://grunliberale.ch/dam/jcr:f693c057-c0ac-4052-996f-f9ace70a0604/Strategie Cool Down 2040 Deutsch (lang).pdf.
- OECD. 2017. OECD Environmental Performance Reviews: Switzerland 2017. OECD Environmental Performance Reviews. OECD. https://doi.org/10.1787/9789264279674-en.
- Finnish Centre for Pensions. 2107. “Retirement Ages.” 2107. https://www.etk.fi/en/work-and-pensions-abroad/international-comparisons/retirement-ages/.
- Anderson, Kevin, and Glen Peters. 2016. “The Trouble with Negative Emissions.” Science 354 (6309): 182 LP – 183. https://doi.org/10.1126/science.aah4567.
- Schmelzer, Matthias. 2015. “The Growth Paradigm: History, Hegemony, and the Contested Making of Economic Growthmanship.” Ecological Economics 118: 262–71. https://doi.org/https://doi.org/10.1016/j.ecolecon.2015.07.029.
- Steinberger, Julia K. 2018. “Climate Breakdown, Capitalism and Democracy.” Medium. 2018. https://medium.com/@JKSteinberger/climate-breakdown-capitalism-and-democracy-e11b16c7d9ef.
- FFA. 2020. “Debt Brake.” 2020. https://www.efv.admin.ch/efv/en/home/themen/finanzpolitik_grundlagen/schuldenbremse.html.
- Gorz, André. 1991. Capitalism, Socialism, Ecology. Verso.
- Friot, Hy Dao Pascal Peduzzi Bruno Chatenoux Andrea De Bono Stefan Schwarzer Damien. 2015. “Environmental Limits and Swiss Footprints Based on Planetary Boundaries.” Switzerland.
- Filippini, Massimo, and Fabian Heimsch. 2015. “The Regional Impact of a CO2 Tax on Gasoline Demand: A Spatial Econometric Approach.” Zürich. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2551864.
- OECD. 2020. “General Government Spending (Indicator).” 2020. https://doi.org/10.1787/a31cbf4d-en.
- FOEN. 2019. “Emissionen von Treibhausgasen Nach Revidiertem CO2-Gesetz Und Kyoto-Protokoll, 2. Verpflichtungsperiode (2013-2020).” Bern.
- Parrique, T.; Barth, J.; Briens, F.;Kerschner, C.; Kraus-Polk, A.; Kuokkanen, A.; Spangenberg, J.H. 2019. “Decoupling Debunked – Evidence and Arguments against Green Growth as a Sole Strategy for Sustainability.” https://mk0eeborgicuypctuf7e.kinstacdn.com/wp-content/uploads/2019/07/Decoupling-Debunked.pdf.
- Aronoff, Kate, Alyssa Battistoni, Daniel Aldana Cohen, and Thea Riofrancos. 2020. “We Can Waste Another Crisis, or We Can Transform the Economy.” Jacobin Magazine. 2020. https://jacobinmag.com/2020/03/green-new-deal-coronavirus-stimulus/.
- FDF. 2020. “Tax Proposal and AHV Financing (TRAF).” May 16, 2020. https://www.efd.admin.ch/efd/en/home/dokumentation/legislation/abstimmungen/staf/fb-steuervorlage17.html.
- Dao, Hy, Damien Friot, Pascal Peduzzi, Bruno Chatenoux, Andrea De Bono, and Stefan Schwarzer. 2015. “Environmental Limits and Swiss Footprints Based on Planetary Boundaries,” no. May: undefined-undefined. https://www.mendeley.com/catalogue/e05a0f3f-e222-30d2-9c64-8112fcc75f46/?utm_source=desktop&utm_medium=1.19.4&utm_campaign=open_catalog&userDocumentId=%7B26f383cb-fb92-4610-b1bc-d2e1541e8ded%7D.
- Dengler, Corinna, and Birte Strunk. 2018. “The Monetized Economy Versus Care and the Environment: Degrowth Perspectives On Reconciling an Antagonism.” Feminist Economics 24 (3): 160–83. https://doi.org/10.1080/13545701.2017.1383620.
- FOEN. 2019. “Switzerland’s Greenhouse Gas Inventory 1990-2017. National Inventory Report. Including Reporting Elements under the Kyoto Protocol.” Bern.
- Piketty, Thomas. 2014. Capital in the Twenty-First Century. Harvard University Press.
- Zeke Hausfather. 2018. “Analysis: Why the IPCC 1.5C Report Expanded the Carbon Budget | Carbon Brief.” CarbonBrief. October 4, 2018. https://www.carbonbrief.org/analysis-why-the-ipcc-1-5c-report-expanded-the-carbon-budget.
- Raworth, Kate. 2017. Doughnut Economics, Seven Ways to Think Like a 21st Century Economist. Wite River Junction, Vermont: Chelsea Green Publishing.
- European Commission. 2020. “Common EU List of Third Country Jurisdictions for Tax Purposes | Taxation and Customs Union.” January 2020. https://ec.europa.eu/taxation_customs/tax-common-eu-list_en#heading_3.
- Bernes, Jasper. 2019. “Between the Devil and the GND. We Cant Legislate & Spend Our Way out of Catastrophic Global Warming.” Commune. 2019. https://communemag.com/between-the-devil-and-the-green-new-deal/.
- Brand, Ulrich, and Heinz Högelsberger. 2020. “Klimapolitik Nach Corona.” Der Standard, March 21, 2020. https://www.derstandard.at/story/2000115991988/klimapolitik-nach-corona.
- Collins, Robert M. 2000. More: The Politics of Economic Growth in Postwar America. Oxford University Press.
- Oehri, I., M. Horster, C. Dreher, Fodge F., Frank A., Jochum C., and Lutz V. 2015. “Kohlenstoffrisiken Für Den Finazplatz Schweiz.” Zürich/Vaduz. https://www.newsd.admin.ch/newsd/message/attachments/41526.pdf.
- FDF. 2020. “Lump-Sum Taxation.” October 24, 2020. https://www.efd.admin.ch/efd/en/home/steuern/steuern-national/lump-sum-taxation.html.
- IPCC. 2018. “Summary for Policymakers. In Global Warming of 1.5°C. An IPCC Special Report on the Impacts of Global Warming of 1.5°C above Pre-Industrial Levels and Related Global Greenhouse Gas Emission Pathways.” Geneva. https://www.ipcc.ch/site/assets/uploads/sites/2/2019/05/SR15_SPM_version_report_LR.pdf.
- Mastini, Riccardo. 2020. “A Post-Growth Green New Deal.” Uneven Earth. February 17, 2020. http://unevenearth.org/2020/02/a-post-growth-green-new-deal/.
- Nässén, Jonas, and Jörgen Larsson. 2015. “Would Shorter Working Time Reduce Greenhouse Gas Emissions? An Analysis of Time Use and Consumption in Swedish Households.” Environment and Planning C: Government and Policy 33 (4): 726–45. https://doi.org/10.1068/c12239.
- Stiglitz, Joseph E. 2019. “Addressing Climate Change through Price and Non-Price Interventions.” European Economic Review 119: 594–612. https://doi.org/https://doi.org/10.1016/j.euroecorev.2019.05.007.
- Haberl, Helmut, Dominik Wiedenhofer, Doris Virág, Gerald Kalt, Barbara Plank, Paul Brockway, Tomer Fishman, et al. 2020. “A Systematic Review of the Evidence on Decoupling of GDP, Resource Use and GHG Emissions, Part II: Synthesizing the Insights.” Environmental Research Letters 15 (6): 65003. https://doi.org/10.1088/1748-9326/ab842a.
- Binswanger, Mathias. 2009. “Is There a Growth Imperative in Capitalist Economies? A Circular Flow Perspective.” Journal of Post Keynesian Economics 31 (4): 707–27. https://doi.org/10.2753/PKE0160-3477310410.
- Binswanger, Hans-Christoph. 2009. Vorwärts Zur Mäßigung: Perspektiven Einer Nachhaltigen Wirtschaft. Stuttgart: Murmann-Verlag.
- Quéré, Corinne Le, R Andrew, Pierre Friedlingstein, Stephen Sitch, Judith Hauck, Julia Pongratz, Penelope Pickers, et al. 2018. “Global Carbon Budget 2018 [Data Paper],” January.
- Bolton, Patrick, Morgan Despres, Luiz Awazu Pereira Da Silva, Frédéric Samama, and Romain Svartzman. 2020. “The Green Swan - Central Banking and Financial Stability in the Age of Climate Change.” www.bis.org.
- Washington, Oliver. 2019. “Wer Das Beste Klima Macht.” SRF. 2019. https://www.srf.ch/news/schweiz/gruene-glp-oder-sp-wer-das-beste-klima-macht.
- Climate Alliance Switzerland. 2016. “Climate Master Plan Switzerland, Implementation of the Paris Agreement!”
- Pettifor, Ann. 2019. The Case for the Green New Deal. Verso.
- Fisher, Mark. 2009. Capitalist Realism. Is There No Alternative? Zero Books.
- Táíwò, Olúfẹ́mi O. 2019. “How a Green New Deal Could Exploit Developing Countries.” The Conversation. February 25, 2019. https://theconversation.com/how-a-green-new-deal-could-exploit-developing-countries-111726.
- Socialist Party Switzerland. 2010. “Climate ‘Marshallplan.’” July 1, 2010. https://www.sp-ps.ch/sites/default/files/documents/02072019_mk_klima-marshallplan_strategie_de.pdf.
- Rosa, Hartmut, Klaus Dörre, and Stephan Lessenich. 2016. “Appropriation, Activation and Acceleration: The Escalatory Logics of Capitalist Modernity and the Crises of Dynamic Stabilization.” Theory, Culture & Society 34 (1): 53–73. https://doi.org/10.1177/0263276416657600.
- Lange, Steffen, and Tilman Santarius. 2020. “Corona-Epidemie: Weniger Arbeit, Weniger Konsum | ZEIT ONLINE.” ZEIT, April 2, 2020. https://www.zeit.de/wirtschaft/2020-04/corona-volkswirtschaft-resilienz-beschaeftigung-grundeinkommen.
- Mair, Simon. 2020. “What Will the World Be like after Coronavirus? Four Possible Futures.” The Conversation. March 30, 2020. https://theconversation.com/what-will-the-world-be-like-after-coronavirus-four-possible-futures-134085.
- The Green New Deal for Europe. 2019. “The Green New Deal for Europe.” https://report.gndforeurope.com/.
- Kallis, Giorgos. 2017. “Radical Dematerialization and Degrowth.” Philosophical Transactions of the Royal Society A: Mathematical, Physical and Engineering Sciences 375 (2095): 20160383. https://doi.org/10.1098/rsta.2016.0383.
- Kallis, Giorgos, Michael Kalush, Hugh O.’Flynn, Jack Rossiter, and Nicholas Ashford. 2013. “‘Friday off’: Reducing Working Hours in Europe.” Sustainability 5 (4): 1545–67. https://doi.org/10.3390/su5041545.