Chile

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Critically Insufficient4°C+ World

NDCs with this rating fall well outside of a country’s “fair share” range and are not at all consistent with holding warming to below 2°C let alone with the Paris Agreement’s stronger 1.5°C limit. If all government NDCs were in this range, warming would exceed 4°C.

Highly insufficient< 4°C World

NDCs with this rating fall outside of a country’s “fair share” range and are not at all consistent with holding warming to below 2°C let alone with the Paris Agreement’s stronger 1.5°C limit. If all government NDCs were in this range, warming would reach between 3°C and 4°C.

Insufficient< 3°C World

NDCs with this rating are in the least stringent part of a country’s “fair share” range and not consistent with holding warming below 2°C let alone with the Paris Agreement’s stronger 1.5°C limit. If all government NDCs were in this range, warming would reach over 2°C and up to 3°C.

2°C Compatible< 2°C World

NDCs with this rating are consistent with the 2009 Copenhagen 2°C goal and therefore fall within a country’s “fair share” range, but are not fully consistent with the Paris Agreement long term temperature goal. If all government NDCs were in this range, warming could be held below, but not well below, 2°C and still be too high to be consistent with the Paris Agreement 1.5°C limit.

1.5°C Paris Agreement Compatible< 1.5°C World

This rating indicates that a government’s NDCs in the most stringent part of its “fair share” range: it is consistent with the Paris Agreement’s 1.5°C limit.

Role model<< 1.5°C World

This rating indicates that a government’s NDC is more ambitious than what is considered a “fair” contribution: it is more than consistent with the Paris Agreement’s 1.5°C limit.

Economy-wide

Between 1990 and 2013, Chile’s emissions increased by 112% from 52 MtCO2e to 110 MtCO2e, excluding LULUCF. Taking into account Chile’s current policies, we estimate that emissions will slightly decrease and level out to reach 109 MtCO2e per year in 2020 excluding LULUCF, which represents a 111% increase above 1990 levels, and 18% increase above 2010 levels. Thereafter, we project that emissions will ramp up, climbing to 132 MtCO2e in 2030 (156% above 1990 levels and 43% above 2010 levels) excluding LULUCF. Under currently implemented policies, Chile will not meet its NDC targets yet, but will be close to meeting its unconditional target. This statement is line with the recently published GHG Mitigation Plan for the Energy Sector (Ministerio de Energía 2017a).

Chile’s overarching Climate Action Plan 2017–2022 guides mitigation actions. It intends to advance mitigation measures by maintaining the national GHG inventory, developing policy, implementing MRV systems, and fulfilling Chile’s international targets (Government of Chile 2016a).

Energy supply

In early 2018, Chile’s Ministry of Energy agreed with major utilities to cease the construction of new coal power plants that do not incorporate CCS technologies. This agreement also included an aim to phase out coal that is aligned to the objectives set in the 2050 Energy Strategy. While the details for the phase-out have yet to be specified, it is clear that this will mean a substantial deviation from today’s situation: in 2016 coal had a 44% share of electricity generation (Comisión Nacional de Energía & Ministerio de Energía 2017). The decision to curb the construction of new coal power plants is in line with the renewable energy cost reduction trend seen over recent years in Chile (IRENA 2015; IRENA 2018). Cost reductions, rather than policy implementation, have led to higher implementation of renewable energy in Chile in recent years. The cost of renewable energy technologies in Chile is expected to keep declining (Ministerio de Energía 2017b). Currently there are 15 coal-fired power plants, an installed capacity of 5.1 GW, in operation in Chile. A unit for the Mejillones plant, equivalent to 0.4 GW or 7% of total installed capacity, is under construction (Global Coal Plant Tracker 2018).

The Ministry of Energy has recently published two different projections for Chile´s energy sector: the GHG Mitigation Plan for the Energy Sector (Mitigation Plan ) and the Long-Term Plan for the Energy Sector (Long-Term Plan) (Ministerio de Energía 2017a; Ministerio de Energía 2017b). While the Long-Term Plan provides a bottom up approach of how Chile’s energy production can look in the future under different energy mixes, the Mitigation Plan projects emissions from the energy sector based on policies and does not specify Chile’s projected energy mix.

Notably, the Long-Term Plan´s current trend scenario already takes into account the halt to building new coal plants except those already under construction. Less clear is the role of gas which, under the Long-Term Plan, plays no role in the near future, but is ramped up in the longer term. In a Paris Agreement-compatible pathway, however, gas should only play a minor role (Cantzler et al. 2017).^[1] A quick estimate of the emissions from the Long-Term Plan based on its current trend scenario, using historical emission factors from IEA, results in an average of 17 MtCO2e/y, 40% less than projected by the Mitigation Plan.

Our analysis on the energy sector is based on the Mitigation Plan’s current policies scenario, which was developed in the context of Chile’s National Energy Policy towards 2050 (Energy Plan 2050 hereafter). These projections include a breakdown of the energy sector subsectors (i.e. transport, mining, electricity generation, transport, and commercial & residential), the recently implemented carbon tax, policies stipulated in Chile’s National Action Plan on Climate Change 2017–2022, as well as more conservative GDP projections than in previous studies.

Chile’s Energy Plan 2050 sets long-term goals for electricity generation, planning to reach 60% generation from renewable sources in 2035 and 70% in 2050 (Ministerio de Energía 2015). This plan builds on the Non-Conventional Renewable Energy (NCRE) Law, which aims to reach 20% of generation from non-conventional renewable energy sources by 2025. Notably, the targets in the Energy Plan include generation from large hydro (which accounted for 24% of generation in 2016), whereas the NCRE law excludes large hydro. The construction of large hydro projects in Chile is highly controversial, largely because of significant adverse environmental and social impacts. In 2014, Chile’s government overturned environmental permits for HidroAysén, a massive hydroelectric project in Patagonia, after a seven year campaign against - the largest environmental campaign in Chile’s history (NRDC 2016). It is not clear which share of large hydro is considered in Chile’s Mitigation Plan.

Making progress towards the non-conventional renewables goal, in 2016, 11% of generation was from non-conventional renewable sources, and 52% of the generation capacity under construction was NCRE (Comisión Nacional de Energía & Ministerio de Energía 2017). In 2016, 44% of electricity generation was still from coal (Comisión Nacional de Energía & Ministerio de Energía 2017).

Additionally, Chile has implemented a carbon tax of 5 USD/tCO2 for stationary sources (turbines or boilers above 50 MWth), which came into effect in 2017. Payments will begin in April 2018.

From 2010 to 2013, the government implemented several policies on appliance labelling, energy efficiency, fuel efficiency standards and electricity infrastructure. Policies that stand out are the Energy Efficiency Seal (2013) and Energy Efficiency Action Plan 2012–2020 (Ministerio de Energía 2013), which aims to set a suitable legal framework for energy efficiency implementation across different sectors towards a 15% energy efficiency improvement by 2025. The Energy Efficiency Action Plan is part of the government’s Energy Agenda.

The Energy Agenda 2014–2018 supports the targets in the NCRE law and proposes additional policies that may contribute to further emissions reductions, such as implementing energy management systems on major energy consumers, efforts to decouple energy consumption from revenues in SMEs, and commitments from the federal administration to reduce energy consumption from the public sector. Additional policies promote geothermal and solar development, particularly in households (Government of Chile 2016a).

Footnotes

[1] The relation between these two documents is unclear to the CAT at this point in time.

Industry

Chile is the world’s leading copper exporter, and the mining and industry sector is Chile’s largest consumer of both total final energy (39% in 2015) and electricity (Comisión Nacional de Energía & Ministerio de Energía 2017).

The main agreement between the government and the mining industry regarding energy efficiency is the “Cooperation Agreement”, under which mining companies should look for ways to use energy more efficiently, and the Ministry of Energy should support them (Government of Chile 2016b).

Chile is considering an energy efficiency law that would possibly be legally binding for industry, but so far, any mitigation action in the mining and industry sector has been driven by private enterprises (Government of Chile 2016b). Additional policies within this sector would be important for Chile to reduce its emissions (Ministerio de Energía 2017a).

Under current policies, emissions from the mining and industry sector are projected to reach 21.4 MtCO2e per year in 2030, 24% increase compared to emissions from 2015 (Ministerio de Energía 2017a).

Transport

In 2015, the transport sector accounted for 35% of total final energy consumption in Chile, second to industry (Comisión Nacional de Energía & Ministerio de Energía 2017). In the same year, the government introduced the “Green Tax” on motorised vehicles, which applies to new vehicles, and is intended to incentivise more efficient vehicles. Chile also has a vehicle labelling programme (Government of Chile 2016a) and has set maximum emission standards for new imported vehicles (Ministerio de Energía 2017a).

Under current policies, emissions from the transport sector are projected to reach 33.4 MtCO2e per year in 2030, a 43% increase from 2015 (Ministerio de Energía 2017a).

Buildings

The buildings sector was the third largest consumer of final energy in 2015, accounting for 21% of consumption (Comisión Nacional de Energía & Ministerio de Energía 2017). Chile pursues a National Strategy for Sustainable Buildings, which includes energy, water, waste and health goals. The government also incentivises energy efficiency in public buildings (Government of Chile 2016a). Under the law no. 20.571/2016, Chile aims to incentivise the use of solar heating through tax cuts for developers who implement this technology (Ministerio de Energía 2017a).

Emissions from the buildings sector are projected to reach 9.5 MtCO2e per year in 2030 under current policies, a 61% increase compared to emissions in 2015 (Ministerio de Energía 2017a).

Forestry

The LULUCF sector has been a sink of around 30–45 MtCO2e in the period from 1990 to 2013. This sink was equal to 36% of Chile’s emissions in 2013. Chile’s NDC references two planned policies, which were not yet in place as of February 2018: updates to the Native Forest Law and a new Forest Promotion Law. These laws would reduce emissions from the forestry sector by reducing deforestation and increasing the sink through forest management, conservation, reforestation, and afforestation (Government of Chile 2016a).