Chile to launch new carbon tax to cut emissions
New government set to launch tax on carbon emissions to boost clean tech and forms part of wider tax reform and environmental strategy
Chile's new government is set to launch a tax on carbon emissions to boost low carbon technologies as part of their strategy to address environmental concerns.
The initiative forms part of wider tax reform and is due to be detailed on Tuesday.
The new measure will include incentives for thermoelectric power plants to reduce their carbon dioxide emissions, the main gas blamed for causing climate change.
Chile is the world No.1 copper producer and the majority of mines are powered by coal-fired thermoelectric plants, which have received heavy criticism from some key agencies, policy makers and environmentalists.
Chile has experienced political instability in the energy sector with five energy ministries since March 2010; a situation that has been blamed for the country experiencing a period of stagnation in terms of its energy policy.
The new carbon tax comes as Chile is making progress in the development of a sustainable energy sector, with the publication of its recently presented National Energy Strategy 2012 – 2030 outlining the direction this will take.
Many of these policies will have a direct impact on future greenhouse gas (GHG) emissions in the Chilean electric sector by contributing to the reduction of Chile’s dependency on coal power generation (BAU scenario), which is expected to be the base of future domestic energy developments.
One of the key targets outlined as part of the strategy is to reduce electric consumption by 12 per cent using energy efficiency, through the Energy Efficiency Action Plan 2012 – 2020. It is expected to include efficient housing plans, technical assistance for industries, labeling of different products, establishment of MEPS for some products, the creation of an energy efficiency award to distinguish the best practices, technological change in public and private lighting, and the creation of an energy efficiency inter-ministry commission.
In terms of renewable energy, the goal is to double the current target of 10 per cent generation by 2024, for which the government plans to develop an open tender process to give project developers public subsidies to improve their electricity selling conditions, thus reducing the risk of the sector.
They also plan to improve public knowledge about the geographical potential on renewables and improve current support mechanisms including soft credits, insurances and financing of feasibility studies.