While Germany is using market mechanisms to combat the impending shortage of natural gas in winter, the Bundesrat wants to do without it. This is incomprehensible.
Swiss households should be encouraged to save.
There were hardly any flowers in the GDR. It wasn’t because East Germans didn’t like buying flowers for their houses and apartments. But in the socialist planned economy, bureaucrats decided what was produced and what was not.
They obviously thought flowers were useless. In addition, they were probably not aware of how much the citizens would have enjoyed flowers. In any case, they were rarely available. This contributed to the fact that today extremely colorful cities like Berlin were extremely gray back then.
Before a heavy winter
In Switzerland, too, next winter could be grayer than usual. The country has to contend with the notion that there will be a shortage of natural gas, and perhaps also a shortage of electricity.
It would not be surprising if Russian President Putin turned on the natural gas tap in the coming months in order to force the Europeans and the Ukrainians to the negotiating table if possible. That would correspond to his typical behavior pattern. However, it is still conceivable that the Europeans themselves will at some point impose an embargo on Russian natural gas.
Federal Council bureaucratic emergency plan
The Federal Council has now specified a plan on how it intends to deal with the impending shortage of natural gas and possibly also electricity. But it is striking that he relies primarily on planned economy methods.
In an emergency, authorities should decide which companies still get natural gas and which do not. With the population, he leaves it at austerity appeals, but does not want to set any additional incentives that would encourage saving natural gas or electricity.
Prices have risen – but further incentives are needed
It’s true: the prices for natural gas have already risen significantly in many places in Switzerland, both for industrial companies and for households. To a certain extent, this acts as an incentive to save and switch to other energy sources. But that’s probably not enough.
It is not without reason that Germany is already using auctions this summer to encourage industrial companies to save. The authorities are auctioning off bonuses given to companies most willing to give up certain amounts of natural gas.
The auctions use the ingenious thing about market mechanisms: Those companies that can most easily do without natural gas register out of their own interest. If, on the other hand, the authorities make a decision, there is a high probability that the natural gas will not be saved in the right place.
Bonus for households
There is potentially a lot at stake in the coming winter: nothing less than the question of how Switzerland can get through a possible shortage with as little pain and economic losses as possible. It is therefore incomprehensible that the Federal Council does not rely on the great advantages of market mechanisms such as auctions.
Additional incentives could also be introduced for private households. The planned austerity appeals and information campaigns are all well and good. But experience has shown that people’s behavior often only changes when they feel something in their wallets. A bonus or malus model could prove valuable in order to save natural gas in households, which are after all the largest consumers in Switzerland.
Trust the market
Why not reward households – above and beyond their other savings – if they use 10 percent less natural gas than usual this coming winter? The costs would not even have to be a burden on the state treasury, they could be added to the general gas price as a kind of surcharge for security of supply.
There is too much GDR in the Bundesrat’s plans. They rely solely on official requirements. But East Germans know that as soon as the market economy took hold, there were suddenly flowers everywhere. In the coming winter in Switzerland, flowers could mean that you can get through a shortage unscathed.