ESG: Switzerland concludes climate agreement with international pioneering character

At its meeting on 14 October 2020, the Federal Council approved an agreement between Switzerland and Peru. This creates the framework for compensating Switzerland's CO2 emissions through projects in Peru.

This is the first agreement of its kind worldwide under the Paris Climate Convention. Switzerland is thus taking on an international pioneering role and creating a standard for international climate projects that meet strict environmental protection requirements while also respecting international norms for the protection of human rights.

Under the Paris Climate Convention, Switzerland has committed itself to halving its greenhouse gas emissions by 2030 compared to 1990 levels. Switzerland will achieve this goal primarily through domestic measures. However, the Paris Agreement also allows states to offset their own emissions through climate projects abroad. The emission reductions achieved there can be credited to their national reduction target.

With the agreement between Switzerland and Peru, which was approved by the Federal Council in its meeting on 14 October 2020, two states for the first time agree on the concrete implementation of these market mechanisms in accordance with Article 6 of the Paris Convention.

According to this Article 6, the Parties recognize that they choose to cooperate voluntarily in the implementation of their nationally determined contributions in order to be able to set higher ambitions for their mitigation and adaptation measures and to promote sustainable development and environmental integrity.

Prevent double counting of CO2 reductions

The agreement reached with Peru is the first of its kind worldwide. It obliges both parties to use a method that prevents double counting of emission reductions achieved. It also defines a clear framework for the international transfer of reductions and their recognition by Peru and Switzerland. The agreement also has a pioneering character, as it establishes criteria that ensure that climate projects do not harm the environment, ensure sustainable development, and respect human rights in project implementation. According to the agreement, there must be no suspicion of a violation of human rights or national legislation. In this case, the transfer of emission reductions from the project in question would be immediately suspended. These criteria are continuously reviewed over the duration of the climate projects.

President Simonetta Sommaruga and the Peruvian Environment Minister Kirla Echegaray Alfaro signed the agreement on October 20, 2020 during a video conference.

October 2020 | Authors: Dr. Martin Eckert, Karl Fässler

Your team

Contact

In need of legal, tax or compliance advice? We look forward to contacting you.