Switzerland needs to invest CHF13 billion per year, equating to 2% of GDP, over the next 30 years to reach its 2050 carbon-zero target, says a new study.

The joint report compiled by the Swiss Bankers Association (SBA) and the Boston Consulting Group (BCG) revealed that a total of CHF387.2 billion is required to hit this objective.

“The bulk of this investment is needed in the sectors of light road traffic, buildings and heavy road traffic,” the report stated.

BCG Managing Director Christian Schmid added the necessary funding would be approximately double the country’s current military outlays.

“The Swiss economy is certainly in a position to afford this,” he told reporters. Swiss banks and other financial institutions would likely cover 91% of the investment via bank loans and the capital market, with the remaining funds derived from other sources, including private-public partnerships.

The report continued: “For the transition – and its financing – to succeed, there has to be optimal interplay between the Swiss state, economy and financial centre.”

In addition, the findings suggested businesses and individuals should continue to invest sustainably, such as upgrading vehicle fleets, modernising buildings and adopting energy-efficient production methods, in order to reach the carbon-zero goal.

Back in 2019, Switzerland announced plans to lower carbon emissions to zero by 2050, in line with the globally agreed goal of limiting global warming to 1.5ºC maximum.

Despite the government unveiling plans to lower greenhouse gas emissions, environmental groups and the Green Party slammed the government’s proposals as “not ambitious enough” and “insufficient”.

In June this year, voters in Switzerland rebuffed a revised law looking to halve CO2 by 2030, predominantly via a rise in petrol and diesel prices.