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Can Chile balance growth and climate action?

Source: Thu, 5 Dec 2013 11:59 AM
Author: Alison Kirsch and Guy Edwards, Brown University
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Environmentalists attend a rally against a hydroelectric dam project to be constructed in the Aysen region of Chilean Patagonia, in Santiago on June 10, 2011. REUTERS/Victor Ruiz Caballero
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Chile is at a crossroads. Copper prices are falling, the gap between energy supply and demand is widening, and in December the second round of presidential elections will determine who will lead Chile in the next administration.

Chile faces a difficult balancing act to maintain strong recent economic growth and the energy this requires, while ensuring progress on its climate, environmental and clean energy goals. In this whirlwind of domestic change, Chile has the opportunity to make the right choices and reaffirm its place as a global leader on climate change.

Chile has the highest income per capita in all of South America, largely thanks to a recent boom in copper exports to China. But mining is energy-intensive and the national government estimates that Chile will need to increase its energy supply 16 percent by 2020. As an energy-poor country, Chile is forced to import 75 percent of its energy, including expensive liquid natural gas. Sourcing this energy, and its high price tag, has generated a highly politicised and difficult debate without an easy way forward. 

Chile is making progress on its pledge to reduce greenhouse gas emissions 20 percent below 2007 levels by 2020. Recently, Chile doubled its renewable energy target from 10 percent by 2024 to 20 percent by 2025.

At the UN climate change negotiations, Chile is part of the Association of Independent Latin American and Caribbean States (AILAC, in Spanish), which also includes Colombia, Costa Rica, Guatemala, Panama, and Peru. This group, currently co-chaired by Chile and Colombia, emerged in 2012 in an effort to break away from the stifling North-South divide and push for binding emission reductions for all countries in a new treaty by 2015.

As the recent COP19 climate negotiations in Poland entered their second week, former Chilean president Michelle Bachelet’s strong popular mandate handed her an easy victory in the first round of presidential elections. In December Bachelet will face a runoff with the second-place candidate, Evelyn Matthei, from which she will likely emerge the winner.

To the frustration of many citizens, President Sebastián Piñera leaves office without having established a clear vision on national energy policy. Bachelet has voiced support for a variety of energy projects, including new coal-fired power plants and expanded import of shale liquid natural gas. Alarmingly, climate change and low-carbon development were largely absent from the debate during the presidential campaign.

At the center of this prickly energy debate is the controversy surrounding HidroAysén, a proposed 2,750-megawatt hydroelectric project in Patagonia. Piñera’s administration has kicked the can down the road, postponing a decision on HidroAysén until after the presidential elections.

Often quoted is Bachelet’s statement that this project is “not viable.” Yet Waldemar Coutts, from Chile’s Ministry of Foreign Affairs, thinks the project will probably be approved.

“We need energy from where we can take it,” he said. Though Bachelet continues to promote importing liquid natural gas – a very expensive option for Chile – mounting  pressure to feed the country’s hunger for energy could push her to reconsider her position on HidroAysén.

Andrés Pirazzoli, from Chile’s Office of Climate Change, said of the election, “We don’t foresee that it’s going to have significant impact (on climate change policy).”

Enrique Maurtua Konstantinidis, regional coordinator for the Climate Action Network in Latin America, is confident in Chile’s ability to lead AILAC alongside Colombia – but notes the tension between environmental concerns and Chile’s interests as a mining country.

“If they succeed on the energy issues they are having, they will be a good model for the rest of Latin America,” he said.

Chile is not the only AILAC country whose economy depends on the extraction of natural resources. AILAC is a promising group given the similar backgrounds of its members, which incites collective ambition.

As Pirazzoli notes, all AILAC countries have pre-2020 mitigation commitments, which is not true for many other developing countries. Might Chile take the plunge to further solidify its leadership and increase its own ambition before 2020? “I think it’s possible,” said Pirazzoli.

In the meantime, Coutts stated, “We don’t hesitate to tell developed countries to do more.”

After the limited success of this year’s COP19, many have already turned their thoughts towards the negotiations in 2014, in preparation for a new treaty draft by 2015. With the pre-COP meeting in Venezuela and COP20 in Peru, 2014 will be the year of Latin America. This is an opportunity for AILAC to exert a larger influence in its push for significant commitments. Yet AILAC can only be an international pacesetter if the domestic policies of its member countries reflect the group’s ambitious rhetoric.

With a new administration and shifting dynamics in the energy and mining sectors, Chile is on the precipice of change. Chile can seize this opportunity to consolidate and enhance its climate change commitments.

Backtracking on its domestic policies or failing to implement them will only undermine Chile and AILAC’s leadership and ambition - which are emerging as key forces in pushing aside the North-South divide in the path toward an ambitious and binding agreement in 2015.

Guy Edwards, who is based in Ecuador, is a research fellow at Brown University’s Center for Environmental Studies and works with the Latin American Platform on Climate and the Climate and Development Knowledge Network. Alison Kirsch is a researcher at Brown University's Climate and Development Lab.

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