Annex D. Switzerland's Tax on Volatile Organic Compounds

This case study looks at the innovation impacts of Switzerland’s tax on volatile organic compounds. Introduced in 2000, the tax covers all emissions of VOCs in Switzerland – both in the production and in the consumption of products containing them. Focusing on three industries, the case study found that innovation did take place by firms. The vast majority of it, however, consisted of incremental innovations and homemade solutions that were not patented. Also highlighted were the barriers that individual firms face to innovating, such as capital equipment sourced from a large manufacturer. The tax on VOCs appears to have also led to significant environmental improvement.