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Climate change and energy policy efforts in Chile: Up in smoke?

Luis Mundaca, Lund University

Abstract

The purpose of this study is to preliminarily evaluate Chile’s energy and climate policy performance historically (1971-2007). The objective is to estimate different indicators in relation to energy and CO2 emission intensities, and identify policy instruments in the light of estimated trends and related structural issues. The methodology is based on a top-down decomposition analytical approach driven by policy evaluation. Using time series data (1971-2007), results show a strong correlation, or ‘coupling’, between economic growth, energy use and CO2 emissions. Chile has not yet passed the transition point of maximum energy intensity ―or reduced energy intensity change― but irregular and temporal efficiency improvements are identified. Explicit policies to promote energy efficiency, except price mechanisms, are not identified before 2005. CO2 emissions doubled between 1990 and 2007, and severe energy security crises have triggered negative rebound carbon effects. Except for the introduction of natural gas, carbon intensity patterns suggest no effectiveness of policies to decarbonise and diversify the energy mix. Explicit policy instruments to promote the development of renewable energy are identified only after 2004. It is concluded that energy and climate policy efforts were rather passive, fragmented and seemed to lack of a coherent vision for encouraging sustained changes in the way energy was generated and used. However, recently implemented initiatives are creating a much needed portfolio of policy to diversify and decarbonise the energy matrix. Results suggest that ambitious long-term targets are critical to increase energy security, encourage a much less carbon-intensive economy and prepare the country for a potential Post-Kyoto Climate International regime.

Suggested Citation

Luis Mundaca. "Climate change and energy policy efforts in Chile: Up in smoke?" In Proceedings of the 3rd Latin American Conference on Energy Economics: 'Energy, Climate Change and Sustainable Development: The Challenges for Latin America’. Buenos Aires, Argentina: International Association for Energy Economics, 2011.
Available at: http://works.bepress.com/luis_mundaca/9