Chile

Chile: Key Resources

Documents
Market Readiness Proposal (February 2013)
 
Presentations
Most recent: Update on Carbon Tax (November 2014)
Market Readiness Proposal Final Presentation (March 2013)
Market Readiness Proposal Draft Presentation (October 2012)
 

Design a carbon pricing instrument; and build capacity in public and private sectors for design and implementation of MRV framework, GHG registry, and carbon pricing instruments.

Country Information

National Context

Like many emerging economies, Chile’s economy is growing fast. Such growth will mean an increase in emissions and an increase in the cost to mitigate them. Chile recognizes the important role that cost-effective, market-based instruments can play in limiting the growth of carbon emissions. The Chilean energy sector accounts for 73% of the country’s non-LULUCF (land use, land-use changes and forestry) emissions and showed the highest growth of emissions by 13% between 2000 and 2006. In 2006, electricity production (36%); mining, manufacture and industry (23%); and transportation (29%) make up most of the country’s energy emissions. On the other hand, the LULUCF sector shows a negative carbon balance nearing 25% of the non-LULUCF sectors, mainly due to captures of exotic forest plantations as Radiata pine and Eucalyptus spp.

By 2020, and with sufficient international support, Chile pledges to reduce emission by 20% below its business-as-usual emissions growth trajectory in an effort to support its low carbon development goals. A primary focus is deriving emissions savings from energy efficiency and renewable energy development, as well as land use change and forestry measures.

In 2013, Chile started to prepare long-term mitigation scenarios, known as Mitigation Action Plans & Scenarios or MAPS Chile. It mainly aims to project GHG emissions on a national level for the Business as Usual Scenario and different Mitigation Scenarios, considering a target year of 2020, 2030, and 2050. Coordination between MAPS and Chile’s MRP is relevant and so, the correspondence between both processes will be ensured.

Source: PMR Market Readiness Proposal submitted by the Ministry of Energy of Chile, February 2013

As the Government of Chile issued a Supreme Decree establishing the institution to coordinate local efforts and foreign policy on climate change in 1996, the National Advisory Committee on the Global Climate was established. The Committee played a key role in preparing the National Climate Change Strategy, which was followed by the National Climate Change Action Plan in 2008. The Action Plan states that the country will limit the country’s growth of GHG emissions in a cost-effective manner.

In 2009, the Inter-Ministerial Committee on Climate Change was created by a presidential instruction and was composed of ministries of Foreign Affairs, Finance, Economy, Public Works, Agriculture, Mining, Transportation and Telecommunications, Energy, and Environment.

In 2010, Chile has enacted a new law, Law 20,417, amending Law 19,300 of 1994, and created the Ministry of the Environment, the Environmental Evaluation Service, the Superintendent for the Environment, and the Council of Ministers for Sustainability.

Source: PMR Market Readiness Proposal submitted by the Ministry of Energy of Chile, February 2013

Market-based Approach

MRV capacity for ETS exist in various forms: i.e. there are legal bodies that establish the requirements to MRV for local gases in the Industry and Power Plants. Basic requirements for an MRV system, an MRV pilot system, a central registry and a local governance body proposal are in need. Capacity for building up and administering registry for ETS does not exist in Chile.

The PMR will support

  • Preparing for a political decision on the potential implementation of an ETS within the energy sector;
  • Capacity-building for regulatory, economic and institutional analyses needed to design the energy sector ETS;
  • Design and implementation of a MRV and GHG registry systems; and
  • Stakeholder engagement.

Source: PMR Market Readiness Proposal submitted by the Ministry of Energy of Chile, February 2013

Emissions Trading

Chile supports the principle of using cost-effective instruments for limiting the growth of GHG emissions as stated in Chile’s National Climate Change Action Plan and advocates the use of market mechanisms for the mitigation of GHG emissions. Through “policy development” and “institutional development,” Chile aims to design a domestic ETS and enhance capacity building

Source: PMR Market Readiness Proposal submitted by the Ministry of Energy of Chile, February 2013

Offset and/or Other Emission Reduction Crediting Programs

Scaled-up crediting mechanisms (SCM)

A scaled-up crediting instrument proposal and complementary instruments that can be potentially implemented in Chile (how they fit and link to ETS and/or scaled-up crediting) will be examined.

Source: PMR Market Readiness Proposal submitted by the Ministry of Energy of Chile, February 2013

Focal Point

Ministry of Energy coordinates GHG mitigation policies. The PMR Steering Committee was established on March 2012 and formed by the ministries of Foreign Affairs, Finance, Economy, Agriculture, Mining, Transport & Telecommunications, Energy and Environment.

News

The Chilean government aims to a new platform for trading forest-based voluntary carbon credits later this year or early in 2014.

Disclaimer: The World Bank does not guarantee the comprehensiveness and accuracy of the data and information included in the Market Readiness Proposal (MRP) and in presentations submitted by PMR participants. Further, the World Bank accepts no responsibility whatsoever for any consequence of their use. The boundaries, colors, denominations, and other information shown on any map in the MRPs or on this website do not imply on the part of the World Bank any judgment on the legal status of any territory or the endorsement or acceptance of such boundaries.